Eugene Shvidler v Secretary of State for Foreign, Commonwealth and Development Affairs
| Jurisdiction | England & Wales |
| Judge | Mr Justice Garnham,Garnham J |
| Judgment Date | 18 August 2023 |
| Neutral Citation | [2023] EWHC 2121 (Admin) |
| Docket Number | Case No: CO/741/2023 |
| Court | King's Bench Division (Administrative Court) |
Mr Justice Garnham
Case No: CO/741/2023
IN THE HIGH COURT OF JUSTICE
KING'S BENCH DIVISION
ADMINISTRATIVE COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Anderson KC and Malcolm Birdling (instructed by Peters & Peters) for the Claimant
Sir James Eadie KC, Jason Pobjoy and Rayan Fakhoury (instructed by Government Legal Department) for the Defendant
Hearing dates: 20 July 2023
Approved Judgment
This judgment was handed down remotely at 10.30am on 18 August 2023 by circulation to the parties or their representatives by e-mail and by release to the National Archives.
Introduction
This case concerns the lawfulness of decisions by the Foreign Secretary to “designate” a British citizen under the sanctions regime established by the United Kingdom Government after the Russian invasion of Ukraine. “Designation” exposes the subject to sanctions which may have a profound effect on his financial and private life.
The Claimant, Eugene Shvidler, is a UK-US dual national. In 1989 he moved from the former Soviet Union to the USA. In 2004, he moved to the UK, where he settled. He has a number of very substantial business interests and is a very wealthy man. He has never been a Russian citizen, and has not visited Russia since 2007.
On 24 March 2022 the Claimant was designated by the Secretary of State for Foreign, Commonwealth and Development Affairs (“the Secretary of State”) pursuant to reg 5 of the Russia (Sanctions) (EU Exit) Regulations 2019 (“the 2019 Regulations”), made under s1 of the Sanctions and Anti-Money Laundering Act 2018 (“SAMLA”). He was so designated on the basis that there were reasonable grounds to suspect that he was an “ involved person”. On 11 November 2022, the grounds for the Claimant's designation were varied following a Ministerial review. The Claimant is now designated on two bases:
i) There are reasonable grounds to suspect that the Claimant is associated with a person (Mr Roman Abramovich) who is, or has been, involved in obtaining a benefit from, or supporting, the Government of Russia.
ii) There are reasonable grounds to suspect that the Claimant himself is, or has been, involved in obtaining a benefit from, or supporting, the Government of Russia through working as a non-executive director of Evraz plc (“Evraz”), an entity carrying on business in sectors of strategic significance to the Government of Russia (namely, the Russian extractives sector).
By these proceedings, the Claimant challenges that designation on two grounds. He contends that:
i) the designation constitutes a disproportionate interference with his rights under Article 8 and Article 1, Protocol 1 (“A1P1”) of the ECHR; and
ii) the Secretary of State has exercised his discretion in a discriminatory manner in breach of Article 14 read together with Article 8 and Article 1 Protocol 1 (“A1P1”) of the ECHR.
I heard submissions from Lord Anderson KC on behalf of the Claimant and from Sir James Eadie KC on behalf of the Secretary of State. I am grateful to them, and to those who assisted them, for their helpful and focused submissions.
The Facts
The Claimant was born in 1964 in Ufa, Bashkortostan in the USSR. His family moved to Moscow when he was three years old. He was educated in the USSR. After graduating from the Moscow Institute of Oil and Gas in 1986, he worked at the Oil Research Institute in Moscow.
In January 1989, he left the USSR, and moved to the United States, where he was granted refugee status. His parents were unable to obtain permission to leave at that time but have since relocated to New York, USA. In the US, he graduated with a Master of Business Administration in Accounting and a Master of Science in International Taxation and began working for Deloitte & Touche in New York.
Mr Shvidler met his former wife, Zarui Kazaryan, in 1994, whilst she was a student in London. They were married in 1995 and their first child was born in New York in 1996. The couple, who separated in 2016, have five children, all of whom are UK citizens (the elder three naturalised, the younger two by birth).
In 2004, Mr Shvidler was granted a British visa under the Highly Skilled Migrant Programme. He was naturalised as a British citizen in 2010. The main family home is in Walton-on-Thames, Surrey.
Mr Shvidler has been a friend of Mr Roman Abramovich since 1986. Throughout Mr Shvidler's time in the USA, he remained in contact with Mr Abramovich. In March 1994, he visited Moscow, travelling on a US refugee travel document with a Russian visa. Soon thereafter he went into business with friends and contacts in Moscow, led by Mr Abramovich.
From 1996 onwards, Mr Shvidler was involved with Mr Abramovich's company, Sibneft (an oil production company), as Vice President for Finance. He became President of that company in 1998 and continued in the role until 2005, when it was sold to a Russian company called “Gazprom”. During his tenure as President of Sibneft, Mr Shvidler was given a nominal shareholding in the company. These shares did not form part of the sale to Gazprom.
In 2011, Mr Shvidler was appointed to the board of Evraz plc, a UK listed company with subsidiaries in Russia, the US, Ukraine, Canada and the Czech Republic. By 2018, he occupied that role as the nominee of Greenleas International Holdings Limited, a BVI entity controlled by Mr Abramovich. When Mr Abramovich's 28.64% shareholding was transferred into his personal control on 16 February 2022, Mr Shvidler again continued in his role on the Board. Until 10 March 2022, the composition of the Board included independent non-executive directors, amongst whom was Sir Michael Peat, previously principal private secretary to HRH the Prince of Wales from 2002 until 2011.
Mr Shvidler has provided philanthropic funding, to the tune of some £10 million, to a number of educational initiatives in the UK.
In February 2014 Russia invaded Crimea, a province of Ukraine. Crimea was then annexed by Russia in March 2014.
On 10 February 2022 Russian troops invaded eastern Ukraine.
On 3 March 2022 the Claimant travelled by private plane to the United States to visit his mother, who was in hospital in New York.
On 10 March 2022 Mr Abramovich was designated by the Secretary of State. The same day, the Claimant resigned from his position as a non-executive director of Evraz plc. The majority of the Board of Directors of that company and the Company Secretary also resigned that day. Trading in Evraz plc's shares was suspended.
On 12 March 2022 a statement was made in The Guardian on Mr Shvidler's behalf. His spokesperson said:
“Mr Shvidler would like to make it clear that, like the rest of us in Europe, he is hoping and praying for peace and an end to the senseless violence in Ukraine. We all hope that the war can be brought to an immediate end.”
Twelve days later, on 24 March 2022, the Claimant was designated by the Secretary of State.
On 28 March 2022 the Claimant was informed by Harrow School that his son's place at the school would be withdrawn with immediate effect.
On 31 March 2022 the Claimant's solicitors, Peters & Peters Solicitors LLP (“Peters & Peters”) wrote to the FDCO requesting the written reasons for his designation. The Claimant wrote personally to Elizabeth Truss MP, then the Secretary of State, setting out relevant background about himself, his family and requesting a reconsideration of the decision to designate him.
Over Easter 2022 the Claimant was informed by Marlborough College that his daughter would not be permitted to return to school for the remainder of the school year.
On 5 May 2022 Evraz plc was designated under the 2019 Regulations.
On 16 June 2022 Peters & Peters received what was called the “Sanctions Designation Form” (“SDF”) and a “Sanctions Designation Form Evidence pack” (“SDFE”) from the FDCO.
On 14 July 2022 Peters & Peters submitted a request for Ministerial Review under s23 of SAMLA.
On 5 August, 9 September, and 28 September 2022 Peters & Peters wrote to the Secretary of State, requesting a response to the request for a Ministerial Review made on 14 July 2022.
On 23 August 2022, Mr Abramovich's designation was varied.
On 14 October 2022 Peters & Peters wrote again to the Secretary of State requesting a response to the request for Ministerial Review, and notifying the Foreign Commonwealth and Development Office (“the FCDO”) of the Claimant's intent to seek judicial review of the Secretary of State's failure or refusal to conduct the administrative review should no response be received.
On 28 October 2022 Peters & Peters sent a pre-action protocol (“PAP”) letter to the FCDO seeking a response to the request for ministerial review.
On 2 November 2022 Alexander Frolov and Alexander Abramov (former nonexecutive directors of Evraz plc) were designated.
On 11 November 2022 the Secretary of State completed the Ministerial Review, and amended the designation of the Claimant. An amended SDF and amended SDFE were provided to the Claimant.
On 20 December 2022 Peters & Peters sent another PAP letter to the FCDO indicating an intention to instigate court proceedings under s38 SAMLA. On 16 January 2023 the Government Legal Department responded to Peters & Peters PAP Letter, disclosing further material. On 24 February 2023 this claim was issued in the Administrative Court.
The Statutory Scheme
The 2018 Act
SAMLA s1 provides the power to make sanctions regulations. It provides, as relevant:
(1) An appropriate Minister may make sanctions regulations where that Minister considers that it is appropriate to make the regulations—
a. for the purposes of compliance with a UN...
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