Deutsche Bank, UniCredit, and Commerzbank have initiated legal action against Linde Group to recover hundreds of millions of euros. These losses stem from the failure of a Russian gas processing and LNG plant project, for which the banks had provided financial guarantees.
Linde Engineering had contracted with RusChemAlliance, a Gazprom joint venture, in July 2021 to build the Ust-Luga plant, a project valued at approximately $10 billion. Linde received an advance of around $1 billion, backed by guarantees from a consortium of European banks. However, after Russia's invasion of Ukraine and subsequent EU sanctions, Linde withdrew from the contract in May 2022, as continuing would have violated export bans on dual-use goods.
When RusChemAlliance demanded the banks pay out on their guarantees, the banks refused, citing sanctions. As a result, Russian courts seized their assets: UniCredit lost about $463 million, Deutsche Bank around $239 million, and Commerzbank about $94 million, along with further sums from Bayerische Landesbank and LBBW. The total amount at stake that the banks are chasing exceeds $1 billion. Deutsche Bank is specifically seeking about $260 million from Linde, while UniCredit wants roughly $460 million.
The core of the legal dispute, which began with a hearing in Frankfurt on July 14, 2026, revolves around who should bear the financial burden when sanctions destroy a contract. The banks argue that Linde is responsible for the project's collapse, while Linde contends that the indemnity it provided was not meant to cover asset expropriation by a foreign state, as the banks did not make payments under the guarantees but had their assets seized. This case highlights the lack of a mechanism in EU sanctions to allocate private losses and sets a critical precedent for future trade finance in politically sensitive markets.
This situation has led to unusual circumstances, such as UniCredit's Russian subsidiary suing UniCredit's German arm. Analysts note that if banks lose, they may increase the cost or cease offering guarantees for politically exposed markets. If Linde loses, it could imply that complying with government sanctions can leave companies liable to their own banks. The outcome will clarify who pays for public policy decisions enacted in Brussels, with significant implications for European businesses involved in international projects.
