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The US Supreme Court will not hear Russian bank appeals over Malaysia Airlines crash

The U.S. Supreme Court refused to hear on Monday a request by Sberbank to avoid a lawsuit filed under the American anti-terrorism laws alleging it had done business with a group accused of downing a Malaysia Airlines plane over Ukraine in 2014.

The Supreme Court rejected Sberbank’s appeal against a lower court ruling that allowed the family of Quinn Schansman (18-year-old American passenger) who died in the crash to sue the state controlled lender.

Schansman's Family sued under the Anti-Terrorism Act. This law allows U.S. citizens injured by "acts of international terrorism", to seek damages through private civil suits.

The 2nd U.S. Circuit Court of Appeals in New York ruled on February that Sberbank was not entitled to sovereign immunity against claims it used the U.S. banking system to funnel donor money to Donetsk People's Republic, or DPR, a Russia-backed separatist group. Circuit Court of Appeals ruled that Sberbank did not have sovereign immunity from claims that it used U.S. banking systems to funnel money to Donetsk People's Republic (DPR), a Russia-backed rebel group.

On July 17, 2014, a surface to air missile shot down Malaysia Airlines Flight MH17 from Amsterdam to Kuala Lumpur over the DPR controlled territory in eastern Ukraine.

Schansman was one of the 298 passengers on board, and was travelling for a family vacation.

The Russian government denied any involvement. Ukraine declared the DPR to be a terrorist group and the United States imposed sanctions against the group.

In 2020, the Russian Ministry of Finance purchased a majority stake of Sberbank.

Sberbank claimed it was entitled to immunity under the Foreign Sovereign Immunities Act as a "foreign country".

It claimed that the 2nd Circuit made a mistake by finding that it was engaged in commercial activities, which would trigger an exception to immunity.

The bank said that this outcome was "particularly problematic in an increasingly fraught environment" where the United States, and other countries "not generally considered to be proverbial "black hats", nevertheless support non-state actor.

Sberbank stated that allowing lawsuits like the one filed by the Schansman Family could lead to retaliation from other countries and expose the United States of America to liability for the activities of "militant groups" they support under the Anti-Terrorism Act.

Lawyers for the Schansmans argued that there had been no confusion in lower courts regarding the scope of the exception for commercial activity. The Schansmans also claimed that Sberbank is not a foreign state under the Anti-Terrorism Act. Reporting by Jonathan Stempel, New York; editing by Will Dunham

(source: Reuters)