Management Company Pervaya reduced monetary claims against Euroclear by ₽80 billion in court

Management Company Pervaya has reduced its requirements for Euroclear by more than 40%. The company managed to compensate some of them by receiving replacement bonds and payments on them, as well as through payments under the presidential decree

Management Company "Pervaya" has reduced its claims against the Euroclear depository due to payments received under Presidential Decree No. 665 and the replacement of part of the Eurobonds of Russian issuers, its representatives said at a meeting in the Moscow Arbitration COURT, an RBC correspondent reports. As explained by two sources familiar with the progress of the proceedings, the amount of claims decreased from 185 billion to 104.5 billion rubles.

As a representative of Pervaya explained during the meeting, the amount of claims was adjusted downward due to:

receipt by the management company of part of the payments on securities under Decree No. 665 (it involves the transfer of compensation to Russian investors at the expense of payments intended for foreign owners of OFZ); replacing part of the Eurobonds for which claims were originally made. After replacement, the management company can receive income from the securities and conduct transactions with them; clarification of the storage location of some papers. During the course of work on the case, it turned out that the place of storage of the assets for which the claims were originally made was Clearstream, and not Euroclear.

After the adjustments, the total amount of claims decreased by more than one and a half times. The entire amount of the reduction is due to a decrease in requirements for payment of the par value of blocked securities - from 164 billion to 84 billion rubles, one of RBC’s interlocutors explained. The amount of claims for lost income from reinvestment was also adjusted; it increased from 402 million to 1.65 billion rubles. The volume of claims for lost income and remuneration of the management company remained unchanged.

The Euroclear representative interpreted First's refusal to receive part of the payments as a waiver of all claims and asked the court to terminate the proceedings. He also stated the need to check the updated list of papers and demands that the plaintiff provided.

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A representative of the National Settlement Depository, who was also present at the meeting (NSD is involved in the proceedings as a third party), said that the papers still belong to the plaintiff, the ownership of them has not been violated, although they are blocked. A situation in which “First” will remain the owner of the securities and receive payments in the amount of their value in the event of a positive court decision can be characterized as unjust enrichment, he pointed out.

After hearing the positions of the parties, the court postponed the hearing in the case until the end of March 2024 .

Pervaya Management Company filed a claim against Euroclear in July 2023. The amount of her claims to the international depository at that time amounted to almost 185 billion rubles. The depository of Raiffeisenbank, the specialized depository Infinitum and the National Settlement Depository (NSD) were also involved as third parties. The latter previously petitioned to suspend the case, since Presidential Decree No. 665 came into force, according to which investors are compensated for “stuck” payments (coupons, dividends) on foreign assets.

Management Company "Pervaya" (formerly "Sber Asset Management") has been operating on the market since 1996 and specializes in trust management of assets in the stock market. Until 2012, the company was part of the business of the Troika Dialog investment company, then it was acquired by Sberbank. In March 2022, Sberbank sold 51% of SB Blagosostoyanie LLC, which owned Sber Asset Management and Sber Real Estate Funds; Sistema Telecom Assets LLC, a subsidiary of AFK Sistema, received 49% of the shares. In December 2022, Sistema withdrew from the capital of both companies, Interfax wrote. As of September 30, 2023, the volume of assets under management of Management Company Pervaya amounted to 1.7 trillion rubles, the volume of equity funds was 10.1 billion rubles.

In total, the file of Arbitration cases includes more than 100 claims against Euroclear from Russian individuals, brokers, management and insurance companies, and investment banks. Among them there are already completed proceedings. So, St. Petersburg Bank was the first to win the case against Euroclear. In January 2023, the Moscow Arbitration Court ordered Euroclear to pay the bank $107.1 million and €489 thousand. But unlike First, in this case we were talking about the bank’s own assets, and not about client securities.

Why Russian individuals and legal entities are suing Euroclear

Since March 2022, after the start of Russia’s special military operation in Ukraine , Western counterparties, including the Euroclear group, stopped interacting with participants in the Russian financial market. Because of this, private and institutional investors from RUSSIA could not make transactions with their foreign assets (Euroclear participates in the accounting chain for such assets), as well as receive payments on them. In June 2022, after NSD (the Russian depositary participating in the asset accounting chain) came under EU sanctions , foreign counterparties finally severed relations with the Russian side.

At the same time, the EU has provided for the possibility of unlocking assets subject to permits and special licenses from Western regulators. At the end of 2022, the regulatory authorities of Belgium (where Euroclear is registered) and Luxembourg (another large international depository, Clearstream, is registered there) issued such permits, after which Russian professional participants and individuals turned to the same regulator for individual licenses under which they could unlock assets by transferring them to a different accounting infrastructure. According to lawyers, European regulators could have received several thousand such applications. At the same time, only a few dozen applicants received licenses; most often, licenses were given to private Russian investors with a residence permit or EU citizenship, experts noted.