From Russia, BSF Brings Home Big Win for Bank of New York

Winter 2010

Jonathan Schiller

The New York Times called the case a "strange odyssey through the Russian legal system," and cited experts who criticized the proceedings as a "lapse of the rule of law in Russia."

It was no small matter when, in 2007, The Bank of New York Mellon faced a $22.5 billion lawsuit from the Russian government relating to a well-publicized illegal money transfer scheme in the 1990's. The claims, brought by a Florida trial lawyer on behalf of Russia, attempted to invoke the U.S. RICO statute in a foreign court. Russia rooted its claims in actions taken by a former bank employee who allegedly helped facilitate the illegal transfer of billions of dollars out of Russia in the 90's. (In 2005, the bank signed a non-prosecution agreement with the U.S. Attorney's office to resolve related claims, though the agreement did not charge the bank with any criminal wrongdoing.)

In the Russia case, The Bank of New York Mellon turned to a team of BSF lawyers led by managing partner Jonathan Schiller. The result, two years later, was success: In October 2009, Russia's Federal Customs Service dropped the suit without any admission of liability by The Bank of New York Mellon, which agreed to pay Russia $14 million as compensation for litigation costs. BSF and its client negotiated the deal with the Russian government after numerous hearings in a Moscow Court.

Matthew Biben, executive vice president and deputy general counsel for The Bank of New York Mellon, called the outcome an "excellent result."

BSF worked with its client to garner support for its position in Moscow and Washington, and brought former U.S. Attorney General Richard Thornburgh to testify in the Moscow court as a defense expert. The defense highlighted the Firm's ability, in a setting such as Russia, to conceive and execute multi-faceted solutions to complex legal problems while negotiating the vagaries of foreign courts.

In addition to Schiller, the BSF team included partners Todd Thomas, Damien Marshall, and Lee Wolosky, and associates Heather King and Alec Schultz.

Related Practice: International Arbitration