Eugene Shvidler, a longtime ally of billionaire Roman Abramovich, accused the UK government of “oppressive treatment” when he launched a legal challenge against sanctions imposed on him after Russia’s invasion of Ukraine.
In a high court case that experts say could set a precedent for oligarchs seeking relief from sanctions, lawyers for Shvidler, who is reportedly worth £1.3bn, are seeking to have his sanctions appointment declared illegal and rescinded, as well as seek restitution for his costs.
They are challenging the Foreign Office’s decision to sanction the USSR-born businessman, questioning whether the “hardships” he faces as a result are proportionate and claiming he has been discriminated against.
They claimed that the sanctions constituted an unlawful interference with their rights under the European convention on human rights.
Shvidler is under sanctions based on his relationship with Abramovich, who the government says benefits from supporting the Kremlin, and his previous role as a non-executive director at the Evraz steel company, which the government says is strategically important to Russia.
In an argument filed in court on Thursday, Shvidler’s lawyers said the effect of the sanctions had been to “destroy his ability to manage his assets and conduct his business, disrupt his life and that of his family, deprive employees from their livelihoods and destroy their reputation.
This included their children being forced to leave the UK schools they attended, Judge Garnham was told.
Lord Anderson, representing Shvidler, also highlighted “colourful, false and offensive” statements made by government ministers, including then-Transport Secretary Grant Shapps and then-Foreign Secretary Liz Truss, who said people under sanctions were “complicit in the murder of innocent civilians.”
The sanctions and their effect, the lawyers claimed, were not provided because Shvidler had no influence over Vladimir Putin or the actions of the Russian state, but had been used by the UK government as a “poster boy” for the sanctions.
Shvidler was also a British citizen, unlike most of the other people subject to sanctions, meaning the restrictions applied worldwide and were therefore unusually onerous, his lawyers said at the hearing. They claimed that he was being subjected to “oppressive treatment” by the British government.
The proportionality of the sanctions was particularly important, their lawyers argued, because the government’s scope to apply sanctions was so broad that it should have taken more account of their effects.
Shvidler, who appeared live via video link from his home in the US, where he also has citizenship, also claimed that he had been discriminated against in connection with his role in Evraz.
The UK government claimed that Evraz, which produces steel, was of strategic importance to the Russian government. The argument is a key element of his justification for imposing sanctions on people who worked for or had an interest in the company.
But other Evraz executives without Russian ties did not face sanctions, Shvidler’s lawyers said, nor did executives from oil and gas companies with sizeable and lucrative interests in Russia, such as BP and Shell.
Shvidler downplayed his ties to Abramovich, saying that while the pair were a longtime business couple, the Foreign Ministry erred in concluding that he derived financial benefit from the relationship.
Abramovich was sanctioned two weeks before Shvidler, with the Foreign Office citing the former Chelsea owner’s alleged closeness to the Kremlin. He has not contested the sanctions.
Links between Shvidler and Abramovich, particularly their respective interests in Evraz, were some of the initial reasons the former came under attack, resulting in the seizure of both of his planes.
His request for the Foreign Office to review the sanctions was rejected, his lawyers said.
They added that the government had subsequently narrowed its reasons for sanctioning both men, dropping the allegation that Abramovich was involved in the “destabilization” of Ukraine and instead saying he derived a “benefit” from supporting the Kremlin.
However, the Foreign Office will say, according to a skeleton argument, that it carried out a “detailed and conscientious” review of the proportionality of the sanctions.
He argues that it is reasonable to conclude that imposing sanctions on Shvidler would lead him to put pressure on Abramovich, who enjoys a good relationship with Putin and could use his influence to persuade the Russian president to end the war in Ukraine.
Imposing sanctions on people close to Putin would also discourage association with him in the future, government lawyers said.
They acknowledged that Shvidler had made public statements opposing the war, but said the sanctions would incentivize him to take private action to lobby against it.
Government lawyers added that Shvidler and others would also be discouraged from working or investing in sectors of strategic and economic benefit to Russia.
In contesting the discrimination charge, the government said it did not impose sanctions only on Evraz’s ethnic Russian directors, but also on those who were also associated with Abramovich.
The case continues.