Following a ruling in favour of its detention last year, representatives of superyacht Phi have brought their case forward to the UK Court of Appeal, probing the legitimacy of its confiscation in March 2022. The 59m yacht was seized in Canary Wharf, London, invoking UK sanction laws, despite its owner, Sergei Naumenko, not being sanctioned.

Dalston Projects, the appellants, are questioning the legality of Judge Sir Ross Cranston’s decision in July last year to reject an appeal for the release of the yacht. They contend that the British Secretary of State for Transport acted with improper intent and breached the European Convention on Human Rights, namely the right to property.

In the 2023 verdict, Sir Cranston justified the decision’s validity to seize assets from oligarchs to exert direct pressure on them, and indirectly on the regime. Their goal is to set an example for other individuals of influence on how Russia’s actions in Ukraine might affect their way of life.

Having originally been delivered by Royal Huisman in December 2021, Phi first arrived in London for an awards show in March 2022 and has remained there since.

Events took a turn as whilst the boat was docked in Canary Wharf, Russia invaded Ukraine. The UK Department of Transport, headed by Secretary of State Grant Schapps (then Minister of Transport), seized the yacht under Russian Sanctions legislation. Schapps labelled Phi a symbol of Russia's influence and affluence.

Phi’s owner was not under sanction at the time of the arrest and remains unsanctioned to this day. Subsequently, in May of the following year, UK Law firm Jaffa & Co. submitted an appeal challenging the legality of its arrest and seeking damages.

This was rejected in July by Sir Cranston, citing no disagreement that the owner, holding a Russian passport, is a person associated with Russia, with no ties to President Putin’s regime. The court ultimately ruled that the Secretary of State acted within the bounds of the Sanctions Regulations, which allowed for the detention of vessels connected to Russia, regardless if they were sanctioned or not

Sir Cranston also acknowledged the interference with Naumenko’s property rights but maintained that the broader interest of Phi’s seizure was enforcing sanctions against Russia and dismissed the case of review for these reasons.

With further developments sure to follow, Phi will remain detained in London’s West India & Millwall Docks. The case is still ongoing.

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