UK Court of Appeal rejects VTB’s appeal in challenge to OFSI general licence for the insolvency of VTB Capital

2 November 2026

The UK Court of Appeal has dismissed Russian bank PJSC VTB Bank’s (VTB) appeal against a High Court judgment which rejected its challenge to an amendment to the general licence permitting the administration of its UK subsidiary VTB Capital Plc – PJSC VTB Bank v HM Treasury [2026] EWCA Civ 1373.

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VTB Bank was UK-sanctioned in February 2022 and the assets of its UK subsidiary, VTB Capital, were frozen. VTB Capital entered into administration in December 2022 and Teneo Financial Advisory Limited were appointed administrators. The Office of Financial Sanctions Implementation (OFSI) granted a General Licence to allow VTB Capital to make and receive payments whilst in administration.

The administrators then asked OFSI to amend the General Licence to stop VTB Bank from stepping ahead of other creditors in the administration.  They were concerned that many of VTB Capital’s assets and debts are in Russia, making it practically impossible for the administrators to recover them, & VTB Bank (a major creditor of VTB Capital) has been taking enforcement action against the assets in Russia.

VTB Bank challenged the lawfulness of that amendment under s38 of the Sanctions and Anti-Money Laundering Act 2018.  It said OFSI had exercised its licensing powers for an improper purpose; that the amendment was irrational in the way it dealt with interest and provisioning for VTB; and that the decision-making process adopted by OFSI was unfair and interfered unlawfully with VTB’s right to a fair hearing under Article 6 of the European Convention of Human Rights because it had not been consulted before the GL was amended.

The High Court rejected the challenge in 2025 and VTB Bank appealed. The Court of Appeal (Vos MR, Bean LJ and Zacaroli LJ) upheld the High Court’s judgment rejecting VTB Bank’s claim, finding that:

1. The wide purposes of SAMLA and the UK’s Russia sanctions regulations were broad enough to allow OFSI lawfully to amend the General Licence for the purpose of making the sanctions effective against VTB Bank.
2. The General Licence, including the challenged amendment, was purely permissive, decriminalising conduct that would otherwise be in breach of sanctions. It did not require the administrators to act in a certain way in the insolvency so could not and did not extinguish or materially alter VTB Bank’s rights in the administration process (§141). Those rights would only be affected if and when the Insolvency Court decides how, under insolvency law, the administration should proceed. Therefore, all VTB Bank’s arguments failed.
3. The Court of Appeal suggested various possible insolvency law solutions to address the administrators’ concerns about VTB Bank stepping ahead of other creditors.

Maya Lester KC of Global Sanctions acted for VTB Capital (acting by its administrators Teneo Financial Advisory Limited) which appeared as an Interested Party supporting OFSI in resisting the appeal.