In an ongoing legal dispute, Sberbank PJSC, Russia's leading bank, is seeking €114.8 million ($123 million) from Glencore (OTC:GLNCY) Plc as compensation for an unsettled oil trading debt. The bank alleges that Glencore's Swiss commodity trading subsidiary failed to pay for the oil it purchased. This development was made public on Wednesday through court documents available on the court's website.
The legal proceedings, which are scheduled to be heard at 4:30 p.m. local time on Thursday, involve Sberbank pressing for shares in Glencore's Russian assets and its grain-trading associate Viterra as a means to offset the oil debt.
The assets that Sberbank is eyeing include a 0.6% stake in oil giant Rosneft PJSC and a 10.6% share in En+ Group International PJSC, the parent company of Russian aluminium producer United Co. Rusal International PJSC. Additionally, the bank is also targeting shares in a grain trading firm previously known as Viterra Rus and a mill in the Rostov region, both part of Rotterdam-based Viterra.
This year, US agribusiness Bunge (NYSE:BG) Ltd agreed to acquire Viterra for $8.2 billion in cash and stock in June. However, Viterra withdrew from the Russian grain export market later in the year.
Sberbank initiated the claim in July, with an initial request for a freeze on shares ahead of the final verdict on the case. However, this appeal was dismissed by the court at the end of August, according to court documents.
The bank's legal action underscores the uncertain status of foreign companies' assets in Russia, particularly amid multiple rounds of sanctions and reciprocal actions sparked by the Ukrainian conflict. This year alone, Moscow has taken control of local branches of several multinational corporations, including France's Danone SA (OTC:DANOY) and Denmark's Carlsberg (CSE:CARLb) A/S.
However, Glencore has managed to avoid any expropriation threats so far. The company has a history of strong connections in Russia and its previous CEO received the Order of Friendship from Vladimir Putin in 2017.
In response to the situation, Glencore has publicly declared it will not engage in any new business dealings with Russia. The company has written off its stakes in Rosneft and En+ as worthless, stating there's no feasible way to divest these stakes under the prevailing circumstances. Both Glencore and Viterra have chosen not to comment on the matter.
The legal proceedings come at a time when Sberbank is grappling with sanctions from the United States, European Union, and other regions, which have resulted in its exclusion from the SWIFT banking network. This situation has hindered payments from its past business associates to the bank.
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