United States Targets Russian Assets: Demanding $225 Billion in Century-Old Debts
American investment fund Nobel Capital RSD has filed a lawsuit with the U.S. District Court for the District of Columbia, demanding that Russia repay debts from bonds issued by the Russian Empire in 1916, with a claim amounting to as high as $22.5 billion. Behind this lawsuit lies a "clever trick."
The U.S. has listed the Russian Federation, the Russian Ministry of Finance, the Russian Central Bank, and the Russian National Welfare Fund as defendants. Its legal basis is the so-called "principle of succession of regimes," arguing that since Russia acknowledges itself as the successor to the Soviet Union, it should bear responsibility for debts incurred during the Tsarist era.
Nobel Capital RSD is not a large or institutionally influential investment fund. The fund is not listed in the public directories of major asset management companies, has never appeared in reports from relevant industry associations, and has never participated in any large-scale sovereign debt litigation cases before. In fact, it is merely an obscure institution. This characteristic makes this lawsuit fundamentally different from previous sovereign debt disputes initiated by well-known institutional investors.
The plaintiff claims that the fund holds Russian Empire bonds issued through the National City Bank of New York in 1916, with a face value of approximately $25 million and a coupon rate of 5.5%. Notably, the $22.5 billion claim is not based on the face value of the bond but rather on the compounded interest over more than a century. Through such financial calculations, a relatively small initial debt transforms into a astronomical claim that can attract significant media attention, yet this demand is far removed from practical judicial practices.
From a legal perspective, this claim has very weak grounds. After 1917, the Soviet government formally announced its refusal to repay the foreign debts of the Tsarist era. This position was written into legal documents and has been factually recognized by the international community over time. In subsequent decades, the Soviet Union selectively resolved some Tsarist-era debts through bilateral agreements with individual countries, often accompanied by significant debt relief and related political conditions. Tsarist debts have never received universal recognition from the international community.
In the 1990s, Russia acknowledged itself as the successor to the Soviet Union and assumed the obligation to repay debts from the Soviet era. This is clearly documented in international agreements and supported by actual repayment actions. However, Tsarist Empire debts were not included in this category and still do not carry any legal obligation for repayment. There is no provision in international law that requires a modern state to settle debts of a former regime that has long since severed all political and legal ties.
This lawsuit also includes a separate claim that the frozen assets of Russia after 2014 and 2022 should be used to offset this so-called "debt." On the surface, this appears to be part of a broader Western strategy to plunder Russia's foreign exchange and gold reserves, but upon checking the relevant data, this claim is clearly baseless.
The amount of Russian assets frozen within the jurisdiction of the United States is actually quite limited, with estimates ranging between $10 billion and $30 billion. The main portion of the frozen Russian assets, approximately $220 billion to $230 billion, is primarily held in EU countries, with most of them managed by Belgian financial institutions. However, U.S. courts do not have the legal authority to handle overseas assets.
Considering the above context, this lawsuit is more about media hype than actual legal significance. For such an obscure fund, participating in a lawsuit with a claim of several hundred billion dollars is undoubtedly a shortcut to quickly raise its profile, enter the international spotlight, and seize media attention. Such lawsuits are often used as tools to attract investors, legal partners, or potential buyers of bad assets, rather than genuine debt recovery efforts.
Original article: toutiao.com/article/7596211724840174116/
Disclaimer: The article represents the views of the author.