Russian Railways calls Finland's train seizure unlawful

MOSCOW (Reuters) - Russian Railways on Friday said Finland's state-owned railway company VR had acted unlawfully in seizing four trains co-owned through a joint venture.

"The transfer of trains ... was not agreed," Russian Railways said in a statement.

VR said on Thursday it had seized the Allegro trains that used to travel between the two countries after more than 18 months of negotiations without any result.

Passenger trains between Finland and Russia were suspended in March 2022, following Russia's full-scale invasion of Ukraine.

VR said the Russian government had neglected its financial obligations towards the Karelian Trains joint venture and redeemed Karelian Trains' loans to Finnish banks when the venture faced bankruptcy in June 2023, obtaining rights that allowed it to seize the trains.

"Repeated proposals from Russian Railways to resume operation of Allegro trains within the framework of existing agreements were not accepted by the Finnish side," Russian Railways said.

Russian Railways said VR's failure to accept its proposals had resulted in lost income and an inability to fulfil obligations.

"Thus, the unlawful actions of VR and the Finnish management of Karelian Trains led to the insolvency of the latter," Russian Railways said.

The Allegro trains, tilting high-speed trains also known as Sm6, each consist of seven carriages, according to VR.

The trains are expected to be put into service in domestic long-distance travel in Finland from 2025.

(Reporting by Gleb Stolyarov and Alexander Marrow; Editing by Mark Potter)