A Russian oligarch sued to get his superyacht back and lost

A Russian businessman sued the British government in order to get his luxurious superyacht back from the United Kingdom after it was seized in 2022 as part of the country's sanctions against Russia. Here's how poorly it went for the oligarch.

In March 2022, Sergei Naumenko’s $48 million dollar superyacht was seized by British government officials based on the businessman's alleged connection to Vladimir Putin. 

Grant Shapp was the British transport secretary at the time of the superyachts seizure and announced that the detention of the 192-foot vessel sent a clear message to Russia. 

“We’ve detained a £38 million superyacht and turned an icon of Russia’s power and wealth into a clear and stark warning to Putin and his cronies,” Shapps was quoted as saying by The Evening Standard in March 2022.

The Guardian reported that the ship, which sailed under the name Phi, was impounded by officers of Britain’s National Crime Agency at Canary Wharf, where it remains today. 

“Detaining The Phi proves, yet again, that we can and will take the strongest possible action against those seeking to benefit from connections to Putin’s regime,” Shapps added. 

The Phi was the first Russian superyacht to be detained in British waters according to The Guardian but its seizure was complicated by the fact that Naumenko was never officially on Britain's list of individuals sanctioned because of the war in Ukraine.

Sky News noted in a June 2022 exposé on the confiscated vessel that the original detention order defined Naumenko as “a person connected to Russia,” which is what gave the British government the legal basis it needed to seize the Phi. 

Naumenko is listed as the beneficial owner of the Phi but the superyacht's actual owners could be a far more complicated problem according to statements made by the National Crime Agency. 

“The ownership of the yacht was deliberately well hidden,” the National Crime Agency said at the time according to an article from The Independent’s Lamait Sabin. 

“The company the ship is registered to is based in the islands of St Kitts and Nevis and it carried Maltese flags to hide its origins,” the National Crime Agency added. 

Regardless of the Phi’s complicated registration, Naumenko was its beneficial owner, and as such, he argued in his High Court claim that his ship should have never been seized by the British government. 

Naumenko was not only seeking the end of his superyacht detention but he was also suing the British government for damages associated with the Phi’s seizure according to his court filings. 

Not much is known about Naumenko according to Sky News but his lawyers told the news outlet that he was a quiet man who made his fortune in "civil engineering and investment management."

"It's headline-grabbing, clickbait, attention-seeking," the Phi’s former captain, New Zealander Guy Booth, told Sky News in an interview in June 2022. “It was easy pickings done for social media."

Booth’s criticism did have some merit. When the Phi was detained, transport secretary Shapps took to TikTok to reveal that the government had detained the ship, saying that the British government would not “allow this yacht to sail we've detained indefinitely."

However, Shapps' TikTok stunt didn't mean that the British government was wrong in impounding the ship, a fact that a London High Court judge agreed with when he dismissed Naumenko's case in the summer. 

Naumenko's lost his appeal on July 21st according to Reuters, which reported that London's High Court dismissed the claim that the Russian oligarch's superyacht was detained for an imporper purpose. 

The judge in the case ruled that Naumenko's vessel was detained not because he was a wealthy Russian but rather because it was "a high-value ship ... and its owner, Mr Naumenko, was 'connected with' Russia."

Naumenko's lawyer Paul Dickie said in a statement that the wealthy Russian was disappointed in the London High Court's decision and added that Naumenko was considering another appeal to free his detained vessel.

Photo Credit: LinkedIn @paul-dickie

A spokesperson from Britain's Department of Transport was happy with the decisions according to Reuters, saying: "We'll continue to act where necessary to crack down on those benefiting from Putin's regime and their illegal war in Ukraine."