Deutsche Bank May Win Russia Sanctions Lawsuit Against Linde
(Bloomberg) -- Deutsche Bank AG may win a legal battle in a dispute with a corporate client over who has to pick up the tab for losses linked to sanctions on Russia, according to a German court.
The Frankfurt Regional Court is inclined to side with Deutsche Bank in an action the lender brought against industrial gases group Linde Plc, Presiding Judge Corinna Distler said at a hearing in the case on Tuesday.
The tribunal’s view is preliminary and may still change after more deliberations, she added. A ruling was scheduled for Oct. 20. Any judgment in the case can be appealed.
Deutsche Bank is seeking about €260 million from Linde over an aborted project for which the bank guaranteed. The Frankfurt-based lender argues Linde must reimburse it after Russian courts seized some of the bank’s local assets following the collapse of a €10 billion gas project. The litigation is part of a broader legal battle between Linde and its financing banks.
Deutsche Bank said it welcomes the court’s preliminary remarks, declining to comment further. It has disclosed that roughly €244 million of its Russian assets were confiscated.
Linde said in a statement that the case touches on fundamental questions of European sanctions law.
“This proceeding is the first step in deciding how EU sanctions are applied and risks are allocated,” it said. “We remain convinced that the legal arguments are on our side and will rigorously defend our position.”
The dispute dates back to Linde Engineering’s role in a project to build gas processing and liquefied natural gas facilities for RusChemAlliance, a Gazprom-backed venture, near St. Petersburg. A number of banks, including Deutsche Bank, issued advance-payment and performance guarantees supporting the 2021 contracts.
After the European Union imposed sanctions following Russia’s invasion of Ukraine, Linde halted works on the project. The banks declined to pay under the guarantees, saying they’re barred by EU sanctions. Russian courts subsequently seized about €1 billion of assets belonging to the lenders in Russia.
“The way we see it, it’s not necessarily the case that Deutsche Bank had to bear the risk,” Distler said. “Both sides knew that things can get very arbitrary when you start a dispute with Russian companies.”
Deutsche Bank has disclosed that roughly €244 million of its Russian assets were confiscated. An attorney for the lender said in court that Linde didn’t purchase insurance for country risk from Deutsche Bank but a standard guarantee.
A lawyer for Linde told the judges that European sanctions affected both sides in the case equally and not just one.
Other banks that had worked with Linde have also taken legal action. UniCredit has filed a separate claim over losses of about €450 million at a Munich court, while Commerzbank AG is pursuing €98 million. BayernLB has recorded a provision of €285 million. The suits in Frankfurt and Munich were all filed last year.
The Frankfurt case is: LG Frankfurt/Main, 2-12 O 29/25.
(Updates with statements from Linde, Deutsche Bank from fifth paragraph.)
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