LUMINOSITY

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Three civil cases pending against yacht of Russian oligarch

Three civil cases are pending in the Commercial Court, in which the official owner of the "Luminosity", the company "Flying Cloud Overseas Limited" from Guernsey, is named as the defendant. At the end of Oct 2024, in two of these disputes, the Commercial Court accepted the proposal of the creditors and issued two temporary measures prohibiting the "disposal, alienation and encumbrance" of the yacht, as well as the measure of its departure from the Porto Montenegro Tivat marina. Acting according to the court's decision, the Port Authority of Kotor confiscated the yacht's shipping documents. Provisional measures in both cases were issued at the proposal of the creditors, at whose risk and expense they were to be taken and implemented until the legal disputes have been brought to an end, whereby the purchasers of the yacht are obliged to bear the costs of insuring the ship in the meantime, i.e. to pay the minimum number of members engaged on it the crew. The 'Luminosity' is linked to Russian oligarch Andrei Gurjev younger, one of the Russians who were put on the list of EU sanctions introduced due to Russia's war against Ukraine. As of March 9, 2022, he was on the list of Russian politicians and oligarchs associated with the regime of the Russian dictator Putin, and to which the EU imposed strict sanctions, including the freezing of their private property. Shortly before that, Gurjev was on the list of those sanctioned by the Government of the United Kingdom. The yacht arrived in Tivat from the Italian shipyard of the Azimut-Benetti company in Viareggio on March 10, 2022, after the Russian oligarch was placed on the EU sanctions list. Since then, the ship has been tied up in the Porto Montenegro marina. After most of the crew left, she has been guarded by a skeleton crew. The British management company "Burgess" announced that it had received permission from the British Government to pay the crew of this yacht the earnings that had been withheld from them due to sanctions. The two cases that had previously been filed against the official owner of the yacht with requests for the imposition of a temporary injunction against the owner , the Italian ship supply company "Versilia Supply" Serrvices" from Vijaređ, i.e. the company "Adriatic Marinas" (Porto Montenegro) from Tivat. In 2024, the Italian company reported a claim in the amount of €99.929,42, and Porto Montenegro €424.221,79 for unpaid connection and accommodation services. After the Commercial Court rejected the creditors' requests for the imposition of temporary measures in both first-instance proceedings, they appealed. The Council of the Commercial Court rejected the objections, so that currently two other temporary measures imposed in active disputes for which the Commercial Court does not provide information on creditors are valid for the "Luminosity". The yacht was offered for sale this summer through the website of the broker tower "Denison Yachting", at a price of 135 million euros. There is an interested buyer who is ready to pay all the debts of its current official owner to creditors in Montenegro and abroad, who have conducted or are still conducting court proceedings in this regard. n their own names, but as a rule, in a company, usually from an offshore destination. That company (the so-called shell company) is the official owner of the ship, and to make things even more complicated, the yacht is usually managed by another company (management company) which takes care of the day-to-day running of the ship - paying the crew, maintaining, supplying, applying regulations and standards, etc. In addition, yachts are, as a rule, registered to one of the so-called a flag of convenience - tax havens that, in addition to lower duties for its owner, also provide guarantees of additional confidentiality of data related to the yacht to potentially interested third parties. However, even though the official papers say otherwise, in the world it is more or less unofficially known for almost every mega and superyacht which natural person is its real owner.

Crews of sanctioned oligarch yachts can be paid

The Burgess Crew Services (BCS) has been granted a license by the UK government to pay the crews of the 'Luminosity' and 'Alfa Nero 'the salaries that were withheld due to sanctions. Having secured the licence from the Office of Financial Sanctions Implementation (OFSI), crew members who were employed on board the yachts at the time sanctions were imposed will likely get their salaries before the year’s end. The license allows Burgess Crew Services (BCS) PCC Ltd. to pay all outstanding agreed salaries and notice as set out in the termination of employment letters issued to each crew member in March 2022 at the time the sanctions were imposed. It also allows BCS to pass on the 'Alfa Nero' gratuity to the crew that was agreed upon before sanctions were imposed. Due to the nature of the sanctions, however, Burgess is unable to pay any salaries for any work or services that occurred past the date of the owner’s designation. A large proportion of the money held to pay the crew is in US dollars and authorities require any transaction using US dollars to have an Office of Foreign Asset Control (OFAC) license first. Despite this, Burgess remained hopeful that both crews will be paid in full before the end of the year. BCS was also applying for a license to release the money from the Policy & Resources Committee in Guernsey,” says Medd. Both yachts allegedly belong to the sanctioned Russian oligarch Andrei Guryev, who was sanctioned by the UK, EU and US shortly after the invasion of Ukraine.