Update on Russian case law regarding financial compensation from Raiffeisenbank for unlawfully rejecting a request for forced conversion

In this post we provide a third update on recent Russian court decisions.

Case 3: Raiffeisenbank was ordered to pay financial compensation for failing to execute a request for forced conversion The third case involves mr. Nesterenko that held ADR's (depositary receipts) of MTS via Interactive Brokers. Mr. Nesterenko requested Raiffeisenbank forcefully convert of his MTS ADR's. Raiffeisenbank Russia refused the request which a general statement that included various reasons why such a request can be rejected. Mr. Nesterenko considered the rejection to be unlawful and went to court to request compensation from Raiffeisenbank. The court determined that mr. Nesterenko submitted the documents that he could reasonably gather and that Raiffeisen put unreasonable conditions in place. The court also considered that Raiffeisenbank, as a professional bank, has it's own resources to verify the information that was provided. The court decided that Raiffeisenbank had to pay compensation to mr. Nesterenko and considered the share price on the Moscow Exchange, just prior to the date of filing the court case appropriate to establish damages. In addition previous dividend payments that were not received by mr. Nesterenko were added as compensation. Raiffeisen appealed the judgement. Although the appellate court reversed the decision, the court of cassation reinstated the initial court decision. The case is currently being reviewed by the Russian Supreme Court. All the case materials can be found here: https://kad.arbitr.ru/Card/50cc8fe1-3de6-4b33-a677-281d8f0913a4 Why is this case interesting? This case shows that investors may well be able to receive financial compensation from Russian custodian banks if they wrongfully rejected a request for forced conversion.