Major European banks are suing a German industrial group for hundreds of millions of euros over its withdrawal from a Russian gas project due to EU sanctions, the Financial Times reported on Monday.

The dispute centers on a €10 billion ($11.4 billion) gas processing plant in Ust-Luga near St. Petersburg, agreed in 2021 between Gazprom-linked RusChemAlliance (RCA) and a consortium that included German engineering company Linde. After receiving more than €1 billion in advance payments, Linde halted work in 2022, citing EU sanctions. RCA sought compensation, prompting Russian courts to seize assets held by several European banks in Russia and target Linde’s Russian joint-venture interests.

According to the FT, Deutsche Bank is seeking about €260 million from Linde, while UniCredit has filed a separate claim worth roughly €450 million. Commerzbank is also suing the company for nearly €100 million.

The banks argue Linde is contractually obliged to reimburse them after they refused to honor guarantees issued for the project, saying payment would have violated EU sanctions. The guarantees had been issued after RCA advanced more than €1 billion to Linde.

Russian courts subsequently ordered the seizure of about €1 billion in assets held by the banks in Russia, leaving Deutsche Bank, UniCredit and other European lenders with hundreds of millions of euros in losses, according to the newspaper.

The litigation could determine whether banks that issue guarantees remain liable for losses caused by sanctions or whether they can recover those costs from companies whose withdrawal triggered the claims, the FT said.

Linde said the Frankfurt lawsuit concerns “complex issues relating to a guarantee agreement” tied to a Russian industrial project that it terminated in compliance with EU sanctions. The company declined further comment because of the ongoing proceedings. It has disclosed contingent liabilities of about $1.2 billion related to advance payments received for the cancelled RCA projects.

Many international companies suspended operations or exited Russia after the EU and other Western nations imposed sweeping sanctions in 2022, triggering a wave of contractual disputes over projects, assets, and financial obligations.