World News

A Russian court awarded more than 2 billion euros ($2.1 billion) of damages against the biggest Western bank in Russia, Austria's Raiffeisen Bank International (RBI), in a landmark ruling underscoring the perils of doing business in Russia.

The case, in which lawyers for Raiffeisen accused the court of using intimidation tactics, is one of the most significant rulings against a Western company still operating in Russia, with one of the largest awards of damages yet.

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Almost three years after Russia's full-scale invasion of Ukraine, RBI's continued presence in Russia underlines the lingering ties between Moscow and Vienna - with Vienna having served as a hub for cash from Russia and former Soviet states.

That bond put Raiffeisen and Austria on the front line of a global push by the United States to isolate Russia by reinforcing sanctions on banking and choking off access to Western goods after it invaded Ukraine.

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"This lawsuit, with a huge number of gross violations, is an attempt to force the sale of blocked assets through a Russian court," Andrei Timchuk, partner at Delcredere, representing Raiffeisen Bank, said in a statement.

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"The court hearing was attended by unidentified armed people in balaclavas, whom the court sat next to the defendant with the obvious goal of exerting additional pressure," he said.

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The dispute followed the failure of an earlier deal that Raiffeisen hoped would allow it unlock some of its frozen billions in Russia.

The case was centred on a claim by Russian investment company Rasperia against builder Strabag, its Austrian shareholders and the Russian arm of Raiffeisen.

RBI had sought to buy a stake in Vienna-based Strabag from Rasperia, which Strabag had linked to Russian tycoon Oleg Deripaska.

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