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Russian entities are facing 'uphill' fight in subpoena case as authorities investigate a subplot

Russian entities are facing 'uphill' fight in subpoena case as authorities investigate a subplot

  • Summary:
  • Firms practicing law are often found in law firms.
  • In long-running case over return of Jewish documents found in early 20th century, a federal circuit panel considers immunity claims.
  • In 2013, a federal judge declared Russia in contempt and ordered 50,000 dollars daily fine.

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A federal appeals court in Washington, D.C., on Tuesday questioned whether Russian-affiliated banking and energy firms may contest subpoenas from a Jewish organization that has fought for more than ten years to compel Russia to return sacramental texts.

Tenex-USA Inc. and State Development Corp VEB.RF were subpoenaed in 2019 by Agudas Chasidei Chabad of the United States in a bid to determine any US assets that could be taken to satisfy repression orders against the Russian Federation. In 2013, a federal judge in Washington, D.C. declared Russia in contempt, and the country is now facing more than $150 million in civil penalties.

The three-judge panel of the United States Court of Appeals for the D.C. Circuit during Tuesday's hearing seemed to be poised to uphold the lower court judge'' orders that Tenex and the bank, which are not defendants, could not ignore Chabad' reluctance to release documents.

Tenex is facing an "uphill battle" in contesting the subpoena, Circuit Chief Judge Sri Srinivasan said. The lawsuit, filed in 2004 to compel the return of thousands of religious texts seized in the early 20th century, was brought by Russia as the defendant. In 2009, Russia abandoned its involvement in the litigation and was held in default.

Nicolle Kownacki of White & Case, a Tenex lawyer, told prosecutors that it's "hard to see you as 'a legal representative', at least in the way we think about legal representatives, which is if you're merely assisting / supporting.

Kownacki did not immediately respond to a message seeking comment after the argument. Lawyers from Freshfields Bruckhaus Deringer, including David Livshiz, represented the Russian-affiliated bank. Livshiz did not immediately respond to a request for comment.

Livshiz argued that the bank, as an instrument of the Russian government, is immune to the jurisdiction of US courts. Chabad sought "invasive and burdensome discovery," Kownacki told the D.C. Circuit in a brief.

Steven Lieberman of Rothwell, Figg, Ernst & Manbeck, who argued in the D.C. Circuit for Chabad, told Reuters after the hearing that Russia has "for years thumbed its nose" at the U.S. court system. He stated that the Russian government has refused to return the cultural books and artifacts in the lawsuit "for no good reason".

Chabad's subpoenas examine the relationship between the bank and energy outfits to Russia. Chabad has yet to "attach" any asset in the United States to comply with a Russian court order.

Russia was in contempt over its refusal to return the sacred texts and was sentenced to a $50,000 daily fine in 2013.

The United States at the time opposed the imposition of a sanction, arguing that it would impede the government's foreign policy interests and its diplomatic effort to resolve the dispute with Russia on behalf of Chabad.

Srinivasan was represented by District Judge Judith Rogers and Senior Judge David Sentelle in the trial.

Agudas Chasidei Chabad of United States v. Russia Federation, U.S. Court of Appeals for the D.C. Circuit, No. 20-7080

Robert Parker and Steven Lieberman of Rothwell, Figg, Ernst & Manbeck are the defendants.

For Tenex-USA: Nicolle Kownacki and David Riesenberg of White & Case

David Livshiz of Freshfields Bruckhaus Deringer, for State Development Corp VEB.RF, is the Vice President of the Fresh Fields bruckhuser deringer.

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