UPDATE 1-Bank of NY suit in Russia adjourned until Oct 6
(Adds defence plans for October, lawyer comments on settlement, duration of case)
MOSCOW, Aug 4 (Reuters) - Russia's $22.5 billion lawsuit against the Bank of New York Mellon (BK.N) has adjourned until Oct. 6, when the defence will call its own witnesses to counter a volley of testimony from U.S. experts on money-laundering.
Since last May, Russia has been seeking compensation after a former vice president at the bank, Lucy Edwards, helped launder more than $7 billion from Russia in the late 1990s through Bank of New York accounts and shell companies.
If the Russian court finds in favour of the plaintiff, Russia's state customs service, it could open the floodgates for further lawsuits to reclaim billions in damages from rampant capital flight in the 1990s.
The case is closely watched by investors and clients of Bank of New York Mellon, which is the world's largest custodian of financial assets. Some analysts have downgraded the bank's stock citing the risk of a judgement against it.
G. Robert Blakey, an American jurist and legal scholar, was the main author of the U.S. law on which Russia has based its suit -- the Racketeering Influence and Corrupt Organizations Act, known as RICO -- a U.S. anti-organised crime law from 1970.
He testified at a hearing in July that Russian courts can apply the U.S. law, and that the bank was liable under RICO for Edwards's role in money-laundering.
On Monday, Blakey, 72, was supposed to face further cross-examination from the bank's lawyers but could not attend the hearing due to illness, prompting the judge to adjourn.
"I hope he will be able to travel (to the next hearing)... But my understanding is that the bank is going to proceed (with its witnesses), not us," Steven Marks, lead attorney for the Russian side, told Reuters.
The Russian government, he added, would not need to call any more experts to the stand, having already brought Blakey, Alan Dershowitz, and U.S. attorney Bruce Marks, who has filed an unsuccessful RICO claim against Russian aluminium giant RusAl.
"We have more ... but I don't think they will be needed."
DEFENCE PLANS
The bank's witnesses are therefore likely to dominate the upcoming hearings.
The 225-year-old institution plans to call Greg Joseph, the author of a textbook on RICO law, and former U.S. Attorney General Richard Thornburgh, who has already submitted written testimony on behalf of the bank [ID:nL20760378], a bank spokesman said.
The spokesman declined to say whether another key witness, Abner Mikva, a former U.S. Congressman who argued against RICO in its original passing, would be able to testify in court.
Ivan Marisin, chief lawyer for the bank, said further testimony, much of which must be translated, could take months.
"Aside from scheduling, any testimony must be translated (into Russian), which alone will cost the bank no less than $500,000," Marisin told Reuters after Monday's hearing.
Marks, the Russian government lawyer, who is from Miami-based law firm Podhurst Orseck, said the two sides were no closer to a settlement after Blakey's testimony.
"This case cries out for a reasonable resolution. But it takes two parties to have talks, and they have been completely refusing," Marks said.
Marisin declined to comment on any out-of-court negotiations. Last month, the bank's chief executive, Robert Kelly, said he has never received a legitimate settlement offer, and has always been willing to engage in reasonable discussions. (Reporting by Simon Shuster, editing by Will Waterman)
