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Russian Tycoon Fails To Get Superyacht Out Of Canary Wharf

Russian-owned superyacht Phi is detained in West India and Millwall Docks in London, Britain March 29, 2022. REUTERS/Tom Nicholson/File Photo

Russian Tycoon Fails To Get Superyacht Out Of Canary Wharf

Bloomberg
Total Views: 8557
July 22, 2023

By Upmanyu Trivedi

(Bloomberg) –The UK’s decision to freeze an unsanctioned Russian tycoon’s £38 million ($49 million) superyacht was legal, a London court ruled in a boost to the government’s attempts to get tougher on wealthy Russians and encourage them to speak out against Russian President Vladimir Putin’s government.

The court rejected the challenge by Sergei Naumenko, a property developer who hasn’t been sanctioned, as it ruled in favor of extending the 2022 freeze of the 60-meter (197-foot) vessel “Phi.” Naumenko had sued the UK’s Department of Transport saying he never engaged in political activities, has no connections with Putin, and that the boat was detained by the UK just to look tough.

“The Secretary of State is entitled to a broad margin of discretion in deciding that the detention power is to be exercised in pursuit of the government’s foreign policy aims.” said Judge Ross Cranston. 

The verdict in one of the first such cases strengthens the UK government’s ability to go after assets of wealthy Russians. A raft of higher-profile Russian billionaires and oligarchs sanctioned by the UK, US and European Union have also turned to the courts to fight the measures.

The UK court rejected Naumenko’s argument that the UK is effectively trying to compel Naumenko to criticize the Russian government without considering the adverse impact on him and his business at home. The government “need not demonstrate the efficacy of each individual detention,” Judge Cranston said.

“It would be difficult to demonstrate that any one decision would have the desired foreign policy outcome. It is not an issue for the court,” he said in the ruling on Friday.

Naumenko said in a statement through his lawyer that he’s “disappointed” with the ruling and is exploring appealing the verdict.

The boat was detained as Naumenko fits the criteria of a person “connected with Russia,” the UK government’s lawyer had argued during the hearing last week. Sanctioning a luxury yacht sends a signal to other super rich Russians and can potentially deter them from giving political support to the Russian regime or tolerating its actions, the government’s lawyer had said.

“We’ll continue to act where necessary to crack down on those benefiting from Putin’s regime and their illegal war in Ukraine,” a government spokesperson said in a statement after the judgment. 

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

© 2023 Bloomberg L.P.

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