The UK’s sanctions measures against Russia’s financial elite are set to be scrutinized by London’s courts in one of the first major tests of the regime.
(Bloomberg) — The UK’s sanctions measures against Russia’s financial elite are set to be scrutinized by London’s courts in one of the first major tests of the regime.
Boris Mints, the controversial Russian tycoon accused of stealing hundreds of millions from the private lender that he founded, is being chased through the courts by the Russian authorities.
But on Tuesday, his lawyers sought to call a halt to the litigation arguing that the government-controlled lenders, one of which is sanctioned, could not lawfully collect potential damages of $850 million. The funds could be channeled straight to the Russian government, he said.
“The claimants maintain that they are entitled to use the English courts,” for the “benefit of the Russian State,” Laurence Rabinowitz, a lawyer for Mints’ sons, said at the London hearing. If the court were ultimately to award damages “it could fairly be said that the UK sanctions regime is not fit for purpose.”
The case highlights the way in which the imposition of sanctions can frustrate the attempts of Russia to enforce against exiled businessmen, and how those same measures could make life easier for the pursued. Equally, for London’s courts that pride themselves on offering access to justice it’s a test of their ability to attract international parties trying to enforce an award.
In 2019 Russian lender National Bank Trust PJSC together with Bank Otkritie, owned by the Russian Central Bank, obtained a worldwide freezing order on the assets of Mints and his sons. They allege that Mints, the founder of Bank Otkritie, defrauded the lenders, before their collapse and bail out by the government.
The attempt to halt the litigation was “opportunistic and ill-conceived,” lawyers for the lenders said in a filing. The banks argue that for a judge to prevent them from collecting an award would effectively see them cut off from a route to justice.
Mints was trying to “exploit” the government measures to exclude sanctioned people from “access to the UK courts,” said Nathan Pillow, a lawyer for the lenders.
In any case, it could all be academic, he said.
“No such judgment will exist until late 2024 or 2025, by which time the sanctions position may well have changed.”
–With assistance from Lucca de Paoli.
(Updates with London’s courts reputation for access to justice in fifth paragraph)
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