A business associate of the oligarch Roman Abramovich has failed in his latest attempt to overturn sanctions that were imposed on him after Russia’s invasion of Ukraine in a case widely seen as a crucial legal test for the post-Brexit UK sanctions regime.
Eugene Shvidler, who served on the board of companies owned by Abramovich, was sanctioned by the UK government in March 2022 as part of measures to target Russia-linked oligarchs and officials after Vladimir Putin ordered the invasion of Ukraine.
Shvidler challenged and lost a case against his sanctions at the high court last year.
He had claimed the measures caused disproportionate hardship and discriminated against him as a Russian-born person, and that he was not closely associated enough to Abramovich, the former owner of Chelsea football club, to justify being placed under sanctions, but the high court ruled in favour of the Foreign Office.
Shvidler then went to the court of appeal, which on Tuesday dismissed his latest challenge in a ruling that will be closely watched by sanctioned oligarchs wanting to bring their own legal challenges to the UK courts. Shvidler now plans to appeal against the decision at the UK’s supreme court.
Lord Justice Singh, giving the court’s ruling, rejected Shvidler’s complaint: “I would accept that these sanctions are both severe and open-ended. But this does not meet the fundamental point that sanctions often have to be severe and open-ended if they are to be effective.”
The UK government imposed sanctions on Shvidler on grounds including that he was associated with Abramovich, who in turn had obtained a benefit from or supported the government of Russia. The Foreign Office argued the men were associated because Shvidler was a long-serving director of Evraz, a steel and mining firm in which Abramovich was a major shareholder. It said he had also served as chair of Millhouse LLC, the Moscow-based arm of the UK company that managed assets for Abramovich and Shvidler himself.
The court of appeal dismissed arguments from Shvidler that he had no more received a financial benefit from Abramovich than had the other 70,000 Evraz employees and agreed with UK government arguments that it had “reasonable grounds to suspect that the appellant had received significant financial benefits from Mr Abramovich”.
Shvidler was born in the Soviet Union but moved to the US in 1989, and then to the UK in 2004. He gained citizenship of the US and UK and had never been a citizen of the Russian Federation, the ruling noted.
Shvidler’s lawyer, Michael O’Kane of Peters & Peters, said in a statement that if the ruling stood it would make it virtually impossible for any person sanctioned by the UK government to bring a successful legal challenge.
“Despite this setback, Mr Shvidler retains his faith in the UK courts. Given the very important issues raised in this case and the ongoing impact of sanctions on him and his family, he intends to bring the matter before the supremecourt at the earliest opportunity,” the statement said.
Alexa Magee, a legal researcher at the campaign group Spotlight on Corruption, welcomed the ruling: “With two major appeal wins under its belt, the government has been given the green light to pursue sanctions with even greater ambition. While the court warned it will not rubber-stamp government decisions or give political hyperbole a free pass, these decisions show how high a bar there is for designation challenges to succeed.”
The UK Foreign Office said in a statement: “We welcome this judgment and the message it sends about the strength of the UK sanctions regime.”
