Eugene Shvidler, a longtime ally of the billionaire Roman Abramovich, has accused the UK government of “oppressive treatment” as he launched a legal challenge against sanctions imposed upon him after Russia’s invasion of Ukraine.
In a high court case being closely watched by oligarchs hoping to free themselves of sanctions, lawyers for Shvidler, who is reportedly worth £1.3bn, are seeking to have his designation for sanctions declared unlawful and quashed, as well as pursuing restitution of his costs.
If he succeeds, the government could be forced to unfreeze his assets, including two private jets impounded last year.
The USSR-born businessman is challenging the Foreign Office’s decision to sanction him, questioning whether the “hardship” he is facing as a result is proportionate and alleging that he has been discriminated against.
His lawyers claim that the sanctions constitute unlawful interference with his rights under the European convention on human rights.
Shvidler is under sanctions on the basis of his association with Abramovich, who the government says obtains benefit from supporting the Kremlin, and because of his previous role as a non-executive director at the steel firm Evraz, which the government says is of strategic significance to Russia.
In an argument presented to the court on Thursday, Shvidler’s lawyers said the effect of the sanctions had been to “destroy his ability to deal with his assets and conduct his business, to disrupt his life and the lives of his family, to deprive employees of their livelihoods and to shatter his reputation”.
This included his children being forced to leave the UK schools they were attending. They have now moved to the US, Mr Justice Garnham was told.
Lord Anderson KC, acting for Shvidler, also highlighted “colourful, untruthful and offensive” statements made by government ministers including the then transport secretary, Grant Shapps, and then foreign secretary, Liz Truss, who said individuals who were under sanctions were “complicit in the murder of innocent civilians”.
Shvidler had been made a “poster boy” for sanctions, he said, despite his having no influence over Russian policy or Vladimir Putin, who he had not seen since the funeral of former Russian president Boris Yeltsin in 2007. Anderson described the government’s approach to sanctioning Shvidler as: “You never know, it might do some good.”
Shvidler is a British citizen, unlike the majority of other individuals subject to sanctions. Anderson said this meant restrictions applied worldwide and were thus unusually onerous. The crossbench peer and KC, who led a recent review of surveillance laws for the Home Office, told the court Shvidler was being subjected to “oppressive treatment” by the British government.
The proportionality of sanctions was particularly important, he said, because the government’s scope for applying sanctions was so wide that it should have given greater consideration to their potential effects.
Shvidler, 59, who appeared live by videolink from his home in the US, where he also holds citizenship, also claimed he had been discriminated against in relation to his role at Evraz.
The UK government claimed Evraz, which produces steel, was of strategic significance to the Russian government. The argument is a key plank of its rationale for placing sanctions on people who worked for, or owned a stake in, the company.
But other Evraz executives had not faced sanctions, Shvidler’s lawyers said, nor had executives at oil and gas companies with sizeable and lucrative interests in Russia, such as BP and Shell.
Shvidler played down his links to Abramovich, saying that while the pair were longtime business associates, the Foreign Office was wrong to conclude that he derived financial benefit from the relationship.
The Foreign Office put Abramovich under sanctions two weeks before Shvidler, citing the former Chelsea owner’s alleged closeness to the Kremlin. He has not contested the sanctions.
Sir James Eadie KC, acting for the foreign secretary, told the court that the Foreign Office had carried out a “detailed and conscientious” review of the proportionality of its sanctions.
He argued that Shvidler was part of a “web of influence”, including Abramovich, that could help put pressure on Putin, adding that it was “difficult to overstate” the importance of preventing Russian atrocities through sanctions, which have been applied to 1,600 people.
He acknowledged that Shvidler had made public statements opposing the war, but said the sanctions would incentivise him to take private action to lobby against it.
The government lawyers added that sanctioning Shvidler would discourage him and others from working in or investing in sectors of strategic and economic benefit to Russia.
Contesting the allegation of discrimination, the government said it did not place sanctions only on Evraz directors of Russian ethnicity, but on those who were also associated with Abramovich.
Garnham said he hoped to deliver a verdict with a few weeks.
