The Russian tycoon fails to get the super yacht out of Canary Wharf Ship’s crew

By Upmanyu Trivedi

(Bloomberg) – The UK’s decision to freeze an unauthorized Russian tycoon’s £38 million ($49 million) superyacht was lawful, a London court has ruled, aiding the government’s attempts to crack down on wealthy Russians and encourage them to speak out against the government of Russian President Vladimir Putin.

The court dismissed the lawsuit brought by Sergei Naumenko, a real estate developer who was not sanctioned, and decided to extend the freeze on the 60-meter (197-foot) ship Phi until 2022. Naumenko had sued the UK Department for Transport, saying he had never been politically involved, had no ties to Putin and that the boat had been detained by the UK just to look tough.

“The Secretary of State is entitled to a wide discretion in deciding whether to exercise the powers of detention in furtherance of the Government’s foreign policy objectives,” said Justice Ross Cranston.

The verdict in one of the first cases of its kind strengthens the UK government’s ability to target wealthy Russians’ assets. A number of prominent Russian billionaires and oligarchs, who have been sanctioned by Britain, the US and the European Union, have also turned to the courts to challenge the measures.

The British court rejected Naumenko’s argument that the UK was in fact trying to force Naumenko to criticize the Russian government without considering the negative impact on him and his domestic business. The government “does not have to demonstrate the effectiveness of each and every detention,” Judge Cranston said.

“It would be difficult to prove that a single decision would have the desired foreign policy outcome. “This is not a matter for the court,” he said in Friday’s decision.

Naumenko said in a statement from his attorney that he was “disappointed” with the verdict and was considering appealing the verdict.

The boat was detained because Naumenko meets the criteria of a “person associated with Russia,” the UK government’s lawyer argued during last week’s hearing. Sanctioning a luxury yacht sends a signal to other super-rich Russians and could potentially deter them from politically supporting the Russian regime or condoning its actions, the government lawyer had said.

“We will continue to act where necessary to crack down on those who benefit from Putin’s regime and his illegal war in Ukraine,” a government spokesman said in a statement following the verdict.

The 500-ton “Phi”, which was built in 2021, has been stuck in a dock in London’s Canary Wharf since December of that year. After a winter stopover, the boat was due to depart for Malta in March 2022 but was detained by then Transport Secretary Grant Shapps.

© 2023 Bloomberg LP

Related Articles

Back to top button