Photo: Pamela Jones

Nautilus International has secured a settlement in favour of its members working aboard the abandoned Alfa Nero following an Antiguan High Court judgement. As a result of the lengthy legal battle, the crew are set to receive more than a year’s worth of unpaid wages. While what happens next in the Alfa Nero saga remains unclear, with the government setting its sights on yet another auction, Charles Boyle, Director of Legal Services, Nautilus International, tells SuperyachtNews that the ruling is a huge victory for the union and its members.

“Although some crew may be slightly disappointed as they wanted to be successful on all aspects of the claims, securing payment for over a year’s worth of wages for our members is an amazing result,” he says. “This is especially true given the context of the Russian sanctions, which has been a completely new legal territory for everyone.”

The legal dispute revolved around outstanding payments owed to the original crew members before the yacht's abandonment and those who continued on board or were hired as part of the skeleton crew between March 2022 and April 2023.

Represented by Captain Christopher Malcolm Lewis and the UK-based trade union, the unionised crew members claimed that they were entitled to €2.2 million in unpaid wages with a 4 per cent interest rate. Their argument was grounded in Section 49(1) of the 2006 Merchant Shipping Act, asserting priority for maritime liens, including wages, over other debts. Simultaneously, non-unionised crew members filed a separate claim seeking payment of €439,494.40. The combined payment sought totalled around €2.7 million.

The claim arrived with Nautilus’ legal department via its yachting team. It quickly became very clear to the organisation that it had a lot of members who were owed payment for their work on Alfa Nero which had not been paid due to the sanctions.

“The cohesiveness of our yachting and legal teams is what really spurred this battle on and allowed us to achieve the result that we did,” says Boyle. “Once the crew contacted our helpline, the yachting team were especially effective and efficient in handling the data collected from their seafarer’s employment agreements, payslips and other details about the claim, and then coordinating the best plan of action.” Nautilus’ legal team then took the initial approach of enforcing the claim as a maritime lien against the vessel, which was subsequently arrested by Nautilus.

Alfa Nero has been stationed in Antiguan waters since March 2022 following Russia's invasion of Ukraine. Registered to Flying Dutchman Overseas, it faced sanctions from the US, prompting the termination of crew services by management company Burgess Crew Services. The yacht was declared abandoned and subsequently seized by the Antigua and Barbuda Port Authority in April 2023, enabling its eventual removal from the list of sanctioned vessels and allowing its potential sale.

The Antiguan government initially intended to use the proceeds of the sale for its own benefit after repaying all creditors of the yacht, which was met with some controversy when first announced. However, ownership disputes, particularly involving Russian oligarch Andrey Guryev's daughter, Yulia Guryeva-Motlokhov, and Flying Dutchman Overseas, have complicated the transaction. Notably, the government has continued to pay significant sums of money for the boat’s upkeep. This has in turn led to complications surrounding the crew’s pay.

“[Government officials] have acted as interveners and somewhat prevented our members from securing payment,” says Boyle. “They of course have the best interests of their government at heart and have been paying a huge amount of money on the yacht’s maintenance, not to mention the environmental risk it poses too. But whilst they are not saying that the crew shouldn’t be paid on principle, they have forced us to prove what our members are actually entitled to, and nothing more, because that would be less for them.”

High Court Judge Nicola Byer oversaw the hearing and addressed issues concerning the crew, Captain Lewis’ authority and ownership disputes. The judge determined that while Captain Lewis hired crew members out of necessity, any pay increase or promotion given between 17 March, 2022, and 10 April, 2023, was beyond his authority.

The judgment also dismissed claims of double pay, as the crew could not demonstrate their employer’s ability to fulfil promises. Byer then stated that crew members hired through Burgess were entitled to their holiday pay per their contracts before termination. Ultimately, the judge ruled that crew were entitled to be paid for the specified period as per their originally agreed upon rates.

No specific date for crew payment was provided in the judgment and given the nature of the sanctions and the yacht’s ownership disputes, what happens next is speculative. Usually in this situation, the funds for the crew’s wages would be covered in the proceeds of the sale. But having failed once already in auctioning the yacht, alternative routes may be the best course for both parties.

“The government could take the approach of issuing a bond to pay the crew, allowing them to deal with the claim immediately and then tackle the sale of the Alfa Nero on their own terms,” says Boyle. “The money flow still can’t come through the employer channel because of the sanctions, so they are going to have to get it from some other means.”

Until a buyer is found, Alfa Nero continues to pose challenges for the Antiguan government, accumulating lawsuits amid taxpayer concerns over ongoing maintenance costs. To tackle this, government officials have openly discussed the possibility of another auction to get rid of the vessel once and for all while simultaneously raising the capital to pay for the debts it has incurred while stationed in Falmouth Harbour.

The two preferred bidders in the initial auction last June, Eric Schmidt and Warren Halle, have retracted their interest in the superyacht. Former Google executive Schmidt withdrew his $67 million bid as a result of the legal delays relating to the yacht’s ownership, which prevented him from acquiring the rights to the vessel.

Meanwhile, Halle has sued the Antiguan government over its alleged failure to adhere to the auction’s rules, which by its own account would have seen Halle purchase the yacht following Schmidt’s failure to transfer the funds. The government is reportedly in talks with Halle to drop the lawsuit and sell the superyacht, but neither party can seem to agree on a price for the Oceanco yacht.

Following the High Court ruling, however, Nautilus has ensured that the crew can find solace in the fact that their pay has been secured, regardless of how the funds are raised. What this situation, among others, has shown amidst the issues the industry has faced following Russia’s invasion of Ukraine is the necessity for crew to perform their due diligence on their ultimate employer.

“This case also shows us how vital it is to keep copies of your employment agreements and correspondence records, so if you ever do effectively have a claim, you have written evidence to back it up,” adds Boyle. “This judgment is a massive win for us and the Alfa Nero crew, and it was the result of months of hard work. It is an outcome we are immensely proud of, and one we aim to replicate for those in need in the future.”

Profile links

Nautilus International

Click here to become part of The Superyacht Group community, and join us in our mission to make this industry accessible to all, and prosperous for the long-term. We are offering access to the superyacht industry’s most comprehensive and longstanding archive of business-critical information, as well as a comprehensive, real-time superyacht fleet database, for just £10 per month, because we are One Industry with One Mission. Sign up here.