KK&P Trial Lawyers convinces the Russian Supreme Court that it was wrong to hold a Russian subsidiary of a major financial group jointly liable

Over the course of two years, the KK&P team, including Maxim Kulkov (Managing Partner), Dmitry Biryulin (Associate), and Diana Akulova (Junior Associate), represented a Russian bank which is a part of a major international financial conglomerate (Case No. A40-194447/2023).

Sovcombank (a ‘systemically important’ Russian bank) filed a claim for joint debt collection from both the contractual debtor, a foreign bank, and its Russian affiliate (the Client). The debt arose as a result of the refusal of the foreign bank to repay debt due to Western sanctions. The Client had nothing to do with the dispute but, according to the claimant, the very fact of the Client’s affiliation with the debtor creates joint liability.

The lower courts, following the prevailing practice, satisfied the claim. A turning point in practice arose with a case involving Citibank, considered by Russian Supreme Court in May 2025. However, the court gave rather vague criteria for the possibility of holding Russian affiliates of foreign companies liable. We hope that the criteria will be clarified in this case. The full text of the judgment is expected in the next 2–3 weeks.