[2025] EWHC 1368 (Comm)

Following the Russian invasion of Ukraine in February 2022, sanctions were imposed on VTB by, amongst others, the governments of the United Kingdom and the United States of America.

On 28 February 2022, JPMS plc notified VTB that it was exercising a right to close out VTB’s transactions under the ISDA Master Agreement, the Client Agreement and a Futures & Options Agreement on basis of an “Event of Default”. The ISDA Master Agreement was terminated on the basis that the Event of Default under the Client Agreement triggered the “cross-default” provisions in the ISDA Master Agreement.

On 24 March 2022:

On 20 April 2022, JPMS plc wrote to VTB informing VTB that the outstanding balance in VTB’s favour following the liquidation of transactions under the Client Agreement was USD 93,308,910.01, against which the USD 11,975,752 had been credited to produce a balance in VTB’s favour of USD 81,333,185,01, which would be paid into a blocked account.

VTB challenged those calculations and provided its calculations on 25 May 2022. It claimed USD 440,653,535.01. VTB’s calculation assumed the correctness of JPMS plc’s USD 11,975,725 figure for the net balance under the ISDA Master Agreement.

On 15 July 2022, JPMCB closed the Correspondent Account in New York, stating that the balance “will continue to be held by J P Morgan … until such time as the applicable sanctions are lifted or all necessary authorizations are granted and the appropriate authorities allowing for the funds to be released”.

On 10 October 2022, JPMCB London informed VTB that it was terminating the UMAA with effect from 18 November 2022, closing the accounts for gold and silver operated under the UMAA, and ceasing to provide any services. The letter stated that where any account contained a residual balance blocked by applicable sanctions, it would continue to be held by JP Morgan “until such time as the applicable sanctions are lifted or the client obtains authorisations from the appropriate authorities for the funds to be released”. There is a dispute as to the efficacy of that letter, with VTB taking the position that it terminated the UMAA by a notice dated 15 May 2024.