RUSSIAN OLIGARCH’S LUXURY YACHT STRANDED IN UK’S COSTLIEST DIVORCE
Russian billionaire and his ex-wife tussle over assets including a showpiece yacht which has ended up impounded in Dubai
With a spa, a swimming pool, two heliports and room for 18 guests, the Luna is more like a floating luxury villa than a yacht. A crew of 50 keeps all nine decks in pristine shape. The lifeboats cost $4 million (127 million baht) apiece. Gleaming engines propel the vessel at a maximum speed of 22 knots.
But for now, the Luna isn’t moving. It sits in a dry dock in Dubai, the most fought-over prize in what has been called Britain’s most expensive divorce. In December 2016, a High Court judge ordered Farkhad Akhmedov, a Russian billionaire who has owned a home in England since the 1990s, to pay the equivalent of $646 million to his ex-wife, Tatiana Akhmedova. He refused, arguing that the couple had been divorced in Russia more than a decade ago.
Unconvinced and unable to enforce his ruling, the judge in April ordered Mr Akhmedov to hand over the yacht, valued at roughly $500 million, to his ex-wife. It has since been impounded by authorities in Dubai, where it had turned up for maintenance.
For more than a decade, Russian oligarchs have been parking their families and some chunk of their net worth in England. A deal was implied: The oligarchs were given a haven from the pitiless realities of Putin-era Russia and Britain got an influx of very rich people.
Now some oligarchs are learning that life in Britain has hazards of its own. That goes even for non-residents like Mr Akhmedov, who never became a British citizen. Eager to keep British tax collectors away from his money, he limited the number of days he stayed in England to a maximum of 180 a year.
In January, he appeared on the “Putin List,” an inventory of business and political elites in Russia, published by the Trump administration. Seven oligarchs — though not Mr Akhmedov — have since been subject to sanctions that prevent them from conducting business in the United States. Even the Luna, the ultimate in high-end joy rides, is customised for a man anticipating trouble. It has a missile detection system, an antidrone system, bulletproof windows and bombproof doors. None of these features, however, have shielded Mr Akhmedov from the British justice system, despite the exhaustive efforts of his legal and accounting team. Before arriving in the Middle East, the vessel had been on an epic journey, though one not measured in nautical miles.
As the nine-figure settlement was gavelled into divorce court history, Mr Akhmedov began what the judge called a “campaign” to hide his assets “in a web of offshore companies.” Nothing demonstrates the breadth and ingenuity of that web like the Luna. Starting in November 2016, the yacht went on a whirlwind voyage, all of it on paper, in a feat of asset protection and financial engineering so elaborate that the judge set in out in a diagram in an April ruling.
Initially, the seizure of the yacht in Dubai sounded like a setback for Mr Akhmedov. Then, he and lawyers for the family trust that technically owns the Luna filed a claim — still pending — arguing that the fate of the yacht should be decided by a local court in Dubai, using Islamic law, known as Shariah.
Legal experts say Mr Akhmedov has calculated that his odds of prevailing are better in a Shariah court, especially given that his ex-wife is a Christian who has acknowledged infidelity in their marriage. Stories in British tabloids have lately emphasised that Akhmedov is a practising Muslim.
That is news to Ms Akhmedova. She said she had never seen her ex-husband kneeling on a prayer rug or going to a mosque, other than at a tourist site. “Apparently because he was born in Azerbaijan, he’s a Muslim,” she said, her eyes widening with disbelief. A sunny woman with a mild Russian accent, Ms Akhmedova wore ripped denim jeans, a batch of string bracelets and a T-shirt that read “Free as a Butterfly.” She said she was reluctant to speak about her divorce, because everything about it is painful, including the recent media coverage in Britain, which has made much of allegations of infidelity levelled by both sides.
She’s also startled by Mr Akhmedov’s campaign to keep her from pocketing 1 cent of his $1.4 billion fortune, most of which he earned selling his stake in a Siberian energy company called Northgas. Contrary to popular assumptions, she said, she needs the money. She is living off a lump sum provided to her by Burford Capital, a litigation finance firm, which is helping to fund the legal efforts and will take a percentage of any results. “I don’t want to play the victim, because it’s not my nature,” she said. “But I have to defend myself.”
Ms Akhmedova said she had always wanted to settle out of court, quietly and for far less than she was awarded. She still speaks fondly of the years she spent with her ex-husband, whom she says she met in Moscow in 1989, when she was 17. During the years that Mr Akhmedov amassed his wealth, the couple regularly toggled between hostilities and opulent cease-fires. She said she filed for divorce a second time in 2013 — she had rescinded the first petition a decade earlier — when one of her ex-husband’s paramours gave birth to a child. They nonetheless tried another détente. That same year, Mr Akhmedov bought more than $500,000 worth of jewellery for his wife, paid expenses for holidays and gave her access to his helicopters and credit cards. In 2014, Mr Akhmedov acquired the Luna, which he purchased from Roman Abramovich, a friend and fellow oligarch. Unfortunately, the change in behaviour promised by her husband did not occur, she said. And once again, she pushed for divorce.
In 2003, Mr Akhmedov had produced documents that purported to show that the couple had gotten a divorce from a Moscow court three years earlier. In his version of events, as explained by his spokesman, the marriage lasted a mere 7 1/2 years and was dissolved on the grounds of Ms Akhmedova’s adultery. The subsequent time together — from 2000 to 2014 — the gifts and vacations? That was for the sake of the couple’s sons. “To give them, as the children of divorced parents, the best possible experience of family life, my client also accompanied his ex-wife and children on occasional ‘family’ holidays,” said the spokesman, Ian Monk, in an email.
This narrative portrays Ms Akhmedova as an opportunist, who pounced when her exhusband had his billion-dollar payday, in 2012. “Within a few days of the wealth being realised by my client’s sale of Northgas, Tatiana made her first approach for an English divorce,” Monk wrote. “My client says that is a second divorce.”
To underscore the point, Mr Akhmedov refused to participate in the British divorce case, neither appearing in court nor sending a lawyer to the proceedings, which began in November 2015. He told the media that tensions between Britain and Russia would prevent him from getting a fair trial and that he regarded the case as political, part of Britain’s efforts to seize assets from well-off Russians.
Judge Charles Haddon-Cave came to different conclusions. He ruled that the 2000 Russian divorce documents were “forged.” Persuaded by Mr Akhmedova’s testimony, he concluded the couple had “remained married in all senses of the word” until 2013.
Two days before the start of the trial, in November 2016, lawyers and accountants took the helm of the Luna and shuffled it to a handful of companies controlled by Mr Akhmedov and his allies, in the Isle of Man, Panama and Liechtenstein. It eventually landed in a newly created family trust called Straight, which Mr Haddon-Cave wryly described in a ruling as “the antithesis of its name.”
A few months after the Luna arrived in Dubai for maintenance, the Dubai International Financial Centre Courts — which conducts business in English and uses English common law — impounded the vessel. Mr Akhmedov contends his dispute is a matrimonial one, which should be decided by a local Shariah court. He wants a judgment that says the British order to transfer ownership of the yacht cannot be enforced in Dubai. “He would rather see the Luna rot in the Dubai heat,” said Monk, “than see it handed over to Tatiana.”