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Home News US Court Clears Way For Lawsuit Against Russian Bank Over MH17 Tragedy

US Court Clears Way For Lawsuit Against Russian Bank Over MH17 Tragedy

by Celia

A U.S. appeals court ruled on Tuesday that the family of an American killed in the 2014 Malaysian Airlines flight MH17 crash can proceed with a lawsuit against Russia’s largest bank, Sberbank. The bank is accused of facilitating financial transfers to a group linked to the plane’s downing.

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In a 3-0 ruling, the 2nd U.S. Circuit Court of Appeals in Manhattan determined that Sberbank, which is state-controlled, was not entitled to sovereign immunity. The court found that the bank used the U.S. banking system to funnel donations to the Donetsk People’s Republic (DPR), a Russia-backed separatist group blamed for shooting down the plane.

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Sberbank’s U.S.-based lawyer declined to comment, and the bank did not respond immediately after business hours in Moscow.

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The case stems from the tragic death of Quinn Schansman, an 18-year-old American who was aboard MH17, which was en route to Kuala Lumpur from Amsterdam on July 17, 2014. The flight was shot down by a surface-to-air missile over DPR-controlled territory in eastern Ukraine, killing all 298 people on board.

While Russia denies any involvement, the United States and Ukraine have designated the DPR as a terrorist group. The U.S. has also imposed sanctions on the organization. Schansman’s family filed the lawsuit in April 2019, seeking to hold Sberbank, another Russian bank, and two U.S. money transfer companies responsible for their alleged roles in funding the DPR.

In the decision, Circuit Judge Joseph Bianco stated that Sberbank’s alleged handling of financial transfers was “quintessentially commercial activity.” This, he said, meant the bank did not deserve immunity under the Foreign Sovereign Immunities Act (FSIA), which generally protects foreign states from being sued in U.S. courts.

Sberbank had argued it was entitled to immunity as a state agency, pointing to another U.S. law, the Anti-Terrorism Act, which the bank claimed provided immunity regardless of its commercial activities. Judge Bianco disagreed, emphasizing that the FSIA, which governs sovereign immunity in civil cases, still applied. He also noted that applying Sberbank’s interpretation would undermine Congress’ intent to allow U.S. citizens to sue foreign entities that support terrorism.

Jenner & Block, the law firm representing the Schansman family, praised the court’s decision. “We look forward to gathering more evidence of Sberbank’s wrongdoing and securing justice for the Schansman family,” the firm said.

The case is Schansman et al v Sberbank of Russia PJSC, 2nd U.S. Circuit Court of Appeals, No. 22-3097.

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