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Special Administration and Sanctions on Russian Banks (Re Sberbank)

Published on: 16 May 2022
Published by: LexisPSL
  • Special Administration and Sanctions on Russian Banks (Re Sberbank)
  • What are the practical implications of this case?
  • What was the background?
  • What did the court decide?
  • Case details

Article summary

Restructuring & Insolvency analysis: The court has provided guidance on the special administration regime for investment banks and its relationship with the package of sanctions against Russian entities. The guidance was in the context of an urgent application brought by the directors of Sberbank CIB (UK) Ltd (the 'Company'). The Company was the indirect subsidiary of a well-known Russian bank, which had been subjected to significant sanctions from both the UK and the US in response to the Russian invasion of Ukraine. Although the Company was not itself directly subject to sanctions, it had encountered severe financial and operational difficulties as a consequence of them. The result was that while the Company was balance sheet solvent, it was unable to pay its debts as they fell due. The requirements for special administration had been satisfied and the court was prepared to exercise its discretion to make the order. The proposed special administrators confirmed they would seek a licence from the Office of Financial Sanctions Implementation (OFSI) as without such a licence, the court acknowledged it would be difficult for the office-holders to function effectively and to wind the company's business down. Negotiations had already taken place in that respect, but to the extent a licence could not be obtained, the office-holders would apply to court for further directions. Written by Ram Lakshman, barrister at Wilberforce Chambers. or take a trial to read the full analysis.

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