SIBUR Wins Court Decision to Unfreeze Accounts in the EU

The restrictions had been based on inaccurate media reports

According to legal sources within the EU, in late September the Higher Regional Court of Vienna lifted the freeze on the accounts of Sibur International GmbH, which had been in effect for three months. In the court proceedings it came to light that Austria’s Ministry of the Interior had frozen the company’s assets based on inaccurate reports in online media.

Austria-based Sibur International is a well-known export division of SIBUR, Russia’s largest producer of polymers and synthetic rubbers. The company has established long-term partnerships not only within the European Union but also in many other countries.

On 21 June 2024, the assets of Sibur International were unexpectedly frozen by an Austrian first-instance court, following a request from Austria’s Ministry of the Interior.

The freeze was imposed based on allegations that the parent company, SIBUR Holding, was allegedly controlled by individuals designated in the EU sanctions lists and was closely associated with the Russian state. Essentially, the key reason behind the Ministry of the Interior’s decision to freeze SIBUR International’s assets was an article in the online publication The Insider.

It was established in court that the Ministry’s claim that individuals under EU sanctions controlled or owned SIBUR Holding could not be substantiated. In its decision, the court noted that the Ministry of the Interior had no grounds to assert that sanctioned individuals owned more than 50% of SIBUR Holding, and that therefore the conclusion that SIBUR Holding was owned by sanctioned individuals was unfounded.

The court also found that there was no reliable evidence of control over SIBUR Holding by sanctioned individuals, and the article in The Insider did not cite any concrete evidence of such control. So, the restrictions on the company’s assets were lifted.

SIBUR International also won another similar case involving false allegations that it was sanctioned—this time against Kimberly-Clark, a manufacturer of health and hygiene products. According to publicly available documents from the Russian judicial database, Kimberly-Clark’s British division had refused to pay for polypropylene supplied to it in 2022, claiming that SIBUR was under sanctions. The issue of whether SIBUR was owned or controlled by EU- or UK-sanctioned individuals was examined in the course of an arbitration conducted by the Arbitration Institute of the Stockholm Chamber of Commerce.

As was revealed in a recent ruling of the Moscow Region Commercial Court, on 9 August 2024 the arbitral tribunal concluded that no individuals under UK or EU sanctions owned or controlled SIBUR. In its award, the tribunal ruled that Kimberly Clark must pay Sibur International €1.1 million for the polypropylene that was supplied and a similar amount for legal and court costs. As the defendant did not voluntarily comply with this decision, SIBUR International filed a petition with the Moscow Region Commercial Court to have the award recognized and enforced in Russia.

Kimberly-Clark’s Russian factory, which produces Kleenex tissues, Kotex pads, and Huggies diapers, is located in the city of Stupino in the Moscow region. Despite Western sanctions against Russia, the company has continued operations in the country. The Moscow Region Commercial Court determined that Kimberly-Clark Ltd and Russia-based Kimberly-Clark ООО are part of the same group of companies and, therefore, can be treated as a single economic entity.

Share this article: