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. Last Updated: 07/27/2016

BoNY Lawsuit Postponed Until Fall

bloombergThieves stole a collection of rare paintings worth millions of dollars that an elderly man had been storing unguarded in his empty apartment, Izvestia reported Tuesday.
A Moscow court ruled Tuesday that the Foreign Ministry must notify the Bank of New York of a $22.5 billion money-laundering lawsuit brought by the Federal Customs Service.

The Moscow Arbitration Court then delayed further hearings of the case until Nov. 13, in anticipation that four months would be sufficient for such notice.

The Federal Customs Service is accusing BoNY of laundering $7.5 billion wired by Russian businesses abroad in the 1990s. Officials want triple damages, citing U.S. law on money laundering.

The delay in the hearings comes because lawyers for the Federal Customs Service mistakenly identified the Bank of New York Inc., the bank's parent company, as a defendant at the start of the trial.

BoNY's Moscow office pointed out the inaccuracy in a court filing last week. Lawyers for the customs service said Tuesday that they had been misguided by the U.S. bank's web site.

"The court rules to replace the defendant in the case ... with the Bank of New York," Judge Lyudmila Pulova said.

The judge chided the lawyers representing the customs service, Maxim Smal and Maxim Polev, saying they were failing to do their jobs properly.

"Why didn't you contact the Central Bank to make sure you got it right?" Pulova said. "This case is not quite typical; it's not quite standard."

She had another dig at the lawyers later, when they discussed a way to notify the bank of the case. Polev suggested that the court should ask the Foreign Ministry to use diplomatic channels to serve a notice, mentioning that the bank had pointed out the same option in its filing.

"Did someone else's position help you to figure out this issue, too?" Pulova asked ironically.

Russia will serve the notice in the United States using a pact between the countries that dates back to 1935. They cannot use the Hague Convention on Private International Law, Smal said.

In the 1990s, Russia broke legal ties with the United States provided for under the convention, a Washington-based legal expert said Tuesday on condition of anonymity. The convention allows for the serving of legal summonses across international borders.

Representatives of the bank's Moscow office stayed away from Tuesday's hearing. The lawyers for the customs service said they were content with the judge's ruling. "We understand that the trial is very sensitive and serious, therefore we are in no hurry," Smal said outside the courtroom.

BoNY merged with the Mellon Corporation earlier this month and is now called Bank of New York Mellon.

Staff Writer Simon Shuster contributed to this report.