Supporting the British government’s “broad margin of discretion” in exercising detainment, a London court handed a defeat to the owner of the yacht Phi. The superyacht therefore remains held, without permission to depart the city, despite the owner remaining unsanctioned.
In March, the owner sued the UK government for unlawful detainment. He sought a decision not only to set aside the holding, but also for damages. In March 2022, the then-Transport Secretary Grant Shapps ordered the detention while the megayacht was at Canary Wharf. Shapps and the National Crime Agency cited the owner’s Russian heritage, without revealing his name. A spokesperson for the prime minister’s office, however, confirmed that the owner wasn’t under sanctions. But, Shapps asserted that detaining the 192-footer (58.5-meter) sends “a clear and stark warning to Putin and his cronies.” He indicated British law permitted exercising power on the grounds that someone connected with Russia owned, controlled, or operated the yacht. He further said, “We can and will take the strongest possible action against those seeking to benefit from Russian connections.”
Notably, neither Shapps nor the NCA alleged that the owner of the yacht Phi, property developer Sergei Naumenko, was close to Putin. Rather, the Department of Transport indicated in court documents that “Mr. Naumenko was unlikely to have made and retained such a level of wealth without showing loyalty and directly or indirectly benefitting from the Russian regime.”
Naumenko himself indicated in his lawsuit that he had no connection, and didn’t engage in political activities. In fact, the suit claimed detainment restricts his rights to “peaceful enjoyment of possessions,” provided by the European Convention on Human Rights. Furthermore, his lawyers said the government detained the yacht to look tough and coerce him to criticize Putin and his supporters.
Issuing the ruling, the judge said, “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.” Additionally, he rejected another of Naumenko’s claims. Naumenko indicated that the UK was trying to force him to criticize the Russian regime without weighing consequences for him and his company in Russia. Specifically, the judge said, there’s no need to “demonstrate the efficacy of each individual detention.” Moreover, “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.”
Naumenko reportedly will seek an appeal. Meanwhile, a government spokesperson says the UK will continue taking action against those benefitting from Putin and the war in Ukraine.