Russian tycoon Naumenko fails to get superyacht out of Canary Wharf

Superyacht Phi (IMO 9867748), which has been stuck in Canary Wharf since the outbreak of the Russia-Ukraine war in February 2022, will remain at berth for the foreseeable future after a UK court ruled that its detention was legal.

The UK government decided to freeze the 58.5-metre yacht, owned by Sergei Naumenko, a property developer who hasn’t been sanctioned. The court rejected the challenge by Naumenko, who had sued the UK’s Department of Transport, asserting that he never engaged in political activities, had no connections, personal or political, to Russia’s President Putin, and that the motivation of the UK government in detaining the yacht was just an attempt to “look tough”.

Judge Ross Cranston however ruled that “The Secretary of State [for Transport] 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”.

A number of cases relating to the detention of Russian assets abroad are going through the courts in several western countries – France, the UK, Italy and thew US being four of the most prominent. This is one of the first such cases to obtain a verdict, albeit in only the first instance, with appeals to higher courts being possible.

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. Judge Cranston said that the UK government “need not demonstrate the efficacy of each individual detention”. He also noted on July 21st that “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 said through his lawyer that he was “disappointed” with the ruling and was exploring the possibility of an appeal.

Naumenko, said the UK’s legal representative in court, fit the criteria of a person “connected with Russia”.

Interestingly, the lawyer’s argument was that sanctioning a luxury yacht sent a signal to other super rich Russians and could potentially deter them from giving political support to the Russian regime or tolerating its actions.

The 495 gt Phi is no giant in the world of superyachts, which are often twice this size. And more than three times its estimated value of approaching $50m. It had arrived in Canary Wharf in December 2021 and had been due to leave for Malta in March 2022. However it was detained on the orders of then-Transport Secretary Grant Shapps.

2021-built, 495 gt Phi does not appear in the Equasis database. MarineTraffic reports it as being Malta-flagged. Although ownership is claimed by Sergei Naumenko, several reports have named the beneficial owner as Vitaly Vasilievich Kochetkov, the founder of Motiv Telecom, a small mobile network in the Urals region of Russia. Like Naumenko, Kochetkov is also not an individual on the UK sanctions list.