Sanctions the government imposed on a Russian-born UK citizen and the owner of an impounded superyacht were justified, Supreme Court justices found this week in a significant ruling on the proportionality of interference with human rights in pursuit of government policy. However, a dissenting judgment in one of the two rolled-up appeals described the imposition of sanctions on a UK citizen as ‘a serious invasion of liberty’.

In Shvidler v Secretary of State for Foreign, Commonwealth and Development Affairs and Dalston Projects v Secretary of State for Transport, the UK’s highest court was ruling on appeals by businessman Eugene Shvidler, whose worldwide assets were frozen in March 2022, and Dalston Projects Ltd, the owner of a 58.5-metre motor yacht detained in London from the same time.

Shvidler emigrated from the Soviet Union as a stateless person in 1988 and became a naturalised UK citizen in 2010. He was designated under the Russia (Sanctions) (EU Exit) Regulations 2019 partly because of his connection with former Chelsea Football Club owner Roman Abramovich – currently the subject of sanctions – and for his former role as non-executive director of Evraz, a UK minerals extraction company operating in Russia.

The other appellant, Dalston Projects, is a UK company that owns the yacht Phi, which has been moored in London’s West India Dock since 2021. Its beneficial owner, Russian businessman Sergei Naumenko, said the detention had caused a loss of up to €650,000 a week in charter fees.

In this week’s judgment, Lord Sales and Lady Rose, with whom Lord Reed and Lord Richards agreed, dismissed both appeals, saying that the designation of Shvidler ‘was a proportionate measure lawfully issued and maintained’ by the foreign secretary. The direction covering the yacht Phi was ‘proportionate and lawful’. The justices noted that the ‘very considerable income’ received from chartering the yacht was ‘likely to make its way to Russia’ and purchase influence there.

But in a strongly dissenting judgment on Shvidler’s appeal, Lord Leggatt said: ‘Making it a criminal offence for an individual who has done nothing unlawful to deal with his own assets without the government’s permission… is a serious invasion of liberty’. He added that if courts are not prepared to protect individual freedoms, the right to a judicial review of a minister’s decision ‘is of little worth’.

While agreeing with Lord Sales and Lady Rose that the government be granted a ‘wide margin of appreciation’ in making decisions on sanctions, their judgment did not adequately recognise the constitutional role of courts in protecting individual liberties, Lord Leggatt said. Meanwhile, the government had failed to explain how Shvidler’s association with Abramovich ‘implicitly legitimised’ Russia’s actions in Ukraine; the claims based on Shvidler’s former role as a non-executive director of Evraz are ‘even less credible’.

On the question of proportionality, Leggatt said a court should be ‘slow to accept that penalising an innocent individual to incentivise others is a legitimate means of pursuing a policy claim’. Likewise, the courts should reject the ‘Orwellian’ approach of putting pressure on Shvidler to speak out more robustly against President Putin.

The judge concluded: ‘Although I am alone in doing so, I deprecate and would declare unlawful the removal of basic freedoms to which Mr Shvidler should be entitled as a citizen of this country. I would allow his appeal.’

In a statement following the judgment hand-down, Shvidler recalled his life in the USSR, when ‘individuals could be stripped of their rights with little or no protections and that is how I feel about this judgment’.

His solicitor, Michael O’Kane, senior partner at international firm Peters & Peters, said the decision would be remembered for Lord Leggatt’s ‘extraordinary dissenting judgment’. He added: ‘Everyone interested in individual rights should read his judgment, as it is for the ages.’

White-collar crime specialist Syed Rahman, partner at Rahman Ravelli, said the verdict sends ‘a chilling message’ to foreign nationals, however loosely they may be connected to Russia. ‘It has to be asked whether the Supreme Court’s decision amounts to giving carte blanche to political sanctions rather than to principled human rights jurisprudence. The judgment raises serious questions about whether we are witnessing the rise of political sanctions that are being dressed up in the language of human rights law.

‘There is a broader principle at stake here. If the principle of proportionality becomes rhetorical – and precision gives way to symbolism – then the UK risks abandoning any sense of legal nuance in favour of the very broad brush of geopolitics.’