Only Russians fail this Spectacularly
Imagine your feuding neighbor claims you destroyed his car worth $7,500 and demands you pay him. Now imagine you refuse, and he files a lawsuit against you for $22,500 in damages. Why that amount? Let’s say your neighbor is Russian, and that explains a lot. You battle in court for a while, and then your neighbor agrees to drop the case in exchange for your payment of $14. Not $14,000 mind you, or $140, but $14.
Exactly this just happened in Russia’s lawsuit against the Bank of New York. After sensational headlines and vituperative allegations from the Russians about “fraud” and “theft” by the Bank, after a claim by Russia that $7.5 billion had been stolen and a lawsuit filed by Russia claiming $22.5 billion (three times more than the alleged theft), Russia settled last week for $14 million.
Russia freely admitted: “Guilt hasn’t been proved. Data and materials are very insufficient to win such a case in court.” Well, an American court where the law actually means something. In a Russia court, Russia would have seized the entire Bank years ago and sold it for scrap, just like YUKOS oil, regardless of the law . . . or for that matter the facts . . . with no difficult of any kind.
Only Russians can fail this spectacularly.
Bank of NY has no assets to speak of in Russia, so there was nothing they could seize. Obviously, any Russian court would have received its marching orders from the Kremlin and would make a judgment against the bank. However, it is virtually certain that such a judgment would be unenforceable abroad. E.g., U.S. courts very rarely enforce judgments coming from foreign courts, even from normal countries. So, Russia took 14 million because there was nothing better she could do. The bank paid it because it’s costs of defending this were probably higher.
The whole thing stinks, but Russia did use good American lawyers from Miami.
I can hear Hitler and Stalin chortling in their graves. Well, they don’t have graves, but its a metaphor.
Stalin has a grave, at the Kremlin wall (but it’s nothing like the Lenin mausoleum).