Detention of superyachts belonging to wealthy Russian nationals has formed a well-publicised part of the UK’s stern response to the invasion of Ukraine. In a guideline case, the High Court rejected a businessman’s claim that the detention of his $44 million vessel was disproportionate and amounted to a violation of his human rights.
The businessman had not been designated as a sanctioned individual. There was no evidence that he held any political or administrative position in Russia, that he had engaged in any sort of political activity or that he had any connection with President Vladimir Putin or his circle. The source of his wealth was, he said, unimpeachable and he had done nothing personally to support Russia’s actions against Ukraine.
His newly built yacht was nevertheless detained at a British port on the authority of the Secretary of State for Transport, who filmed a TikTok video of himself on the quayside and gave media interviews in which he described the businessman as a Russian oligarch and a ‘friend of Putin’.
In judicial review proceedings, the businessman asserted that the vessel’s detention under the Russia (Sanctions) (EU Exit) Regulations 2019 was disproportionate and carried out for an improper purpose. Depriving him of its use, he contended, amounted to a breach of his human right peacefully to enjoy his private property.
Dismissing his challenge, however, the Court noted that the word ‘oligarch’ is today commonly used in a broad sense to denote a very wealthy person. The Secretary of State’s description of him as a friend of Putin, although wrong, was an example of excusable political hyperbole designed to send a message to the Putin regime and its supporters. The allegation was not mentioned again and did not form the basis of the detention decision.
Although he was not personally sanctioned, the businessman fell within the ambit of the Regulations in that he was ordinarily resident in Russia and connected with that country. He had no control over events in Ukraine and there was no evidence that he supported the invasion. However, the Secretary of State took the view that there was likely to be a direct or indirect link between his wealth and economic activities and the Russian state.
The Court had no doubt that the detention interfered significantly with his property rights. However, it was a temporary and reversible measure and his wealth was such that he did not claim to have suffered financial hardship as a result. Overall, the Secretary of State was entitled to a broad margin of discretion in exercising his power in pursuit of the government’s foreign policy objectives and struck a fair balance between the businessman’s individual rights and those of the public at large.