US Supreme Court declines to hear Sberbank appeal in MH17 compensation case

The Supreme Court of the United States has declined to review an appeal by Russian state-run Sberbank, effectively allowing a civil lawsuit filed by a U.S. citizen who was killed in the downing of the Malaysia Airlines Flight 17 to proceed in federal court.

The lawsuit was initiated by the family of Quinn Schansman, an 18-year-old American who died when MH17 was shot down over eastern Ukraine in 2014, killing all 298 people on board. The plaintiffs brought the action under the U.S. Anti-Terrorism Act, which permits American nationals to seek civil damages for acts of international terrorism.

The complaint alleges that Sberbank provided financial services and support to Donetsk People’s Republic militants, who are accused of carrying out the attack with a surface-to-air missile, Reuters reports.

Sberbank moved to dismiss the case, asserting sovereign immunity on the grounds that it is majority-owned by the Russian state. In February, however, the United States Court of Appeals for the Second Circuit affirmed that the bank was not entitled to such immunity because its activities in the United States are considered “commercial” under the Foreign Sovereign Immunities Act.

The Supreme Court’s decision not to grant certiorari leaves that appellate ruling intact, enabling the case to return to the district court for litigation on the merits.

If successful, the plaintiffs could secure damages and establish a precedent reinforcing the exposure of foreign state-owned financial institutions to U.S. civil liability when their commercial activities are alleged to support terrorism or armed aggression.

“This decision sends a clear signal: those who finance Russia’s aggression cannot hide behind immunity,” said Andriy Yermak, Head of the Office of the President of Ukraine.