Dubai: A mega luxury yacht mired in a bitter divorce battle between a Russian billionaire and his ex-wife will remain locked down in Dubai port for the time being despite arguments by a team of lawyers at an appeal hearing on Wednesday at Dubai International Financial Centre (DIFC) Courts to secure its release.
The fate of $540-million superyacht ‘Luna’ now lies with a panel of three justices presided over by Sir David Steel, Deputy Chief Justice, DIFC Courts, who wrestled in the hearing on Wednesday with a vexing set of legal quandaries, chiefly, rightful ownership and legal jurisdiction leading up to the 115-metre superyacht’s temporary seizure in February.
A ruling was not immediately available by Deputy Chief Justice Steel, Justice Sir Richard Field, and Justice Judith Prakash after a day’s evidence heard inside the DIFC Courts courtoom.
Superyacht Luna remains embroiled in an ongoing legal fight between Russian oil and gas tycoon Farkhad Akhmedov and his ex-wife Tatiana Akhmedova whose agents successfully won a freeze order in February to temporarily hold the yacht at Port Rashid in Dubai.
The temporary detention of the vessel stems from a December 2016 order when Tatiana Akhmedova was awarded a $641-million divorce settlement by the British courts against her ex-husband, based on which, DIFC Courts issued the temporary freezing order to help her recoup the award.
The award is the highest divorce settlement in Britain’s legal history.
On April 10, however, the DIFC Courts granted permission to Straight Establishment — legal owners of the yacht — to seek appeal of the original ‘freezing’ order.
On Wednesday, Straight Establishment’s lawyer Vernon Flynn argued that the freeze order should be set aside given that the client was never named in the British High Court divorce settlement.
Straight Establishment is a separate legal entity, he submitted, and is now the rightful owner of Luna, thereby nixing not only any enforcement claims against the yacht’s seizure but also negating DIFC Courts jurisdiction necessary to freeze the asset.
Justice Steel asked Straight Establishment’s lawyer Flynn who was paying the legal bill to represent the entity at the hearing but Flynn declined to elaborate.
Tatiana Akhmedova’s lawyer Michael Black countered that Straight Establishment is nothing more than a shell company still under the control of Farkhad Akhmedov and echoed the London High Court ruling last month that awarded ownership of the yacht to Tatiana and ruled that her husband was evading enforcement by creating a separate entity.
Black argued that the Russian billionaire still effectively controls the yacht and that the arrest of the boat was done “with a view to enforce a recognised English judgement … the second defendant has always been the first defendant’s alter ego, cipher….”
Black asserted that “Straight is Mr. Akhmedov’s nominee”.
In late April, Justice Haddon-Cave, in his written ruling from London High Court, said “it is clear from the evidence that Straight was incorporated deliberately to make enforcement of the judgement against [Mr Akhmedov] more difficult by the interposition of a ‘fresh’ corporate entity, against which judgement had not been entered”.
What's at stake
With one of the world’s largest swimming pools on a superyacht, Luna is one of the largest and most expensive private vessels on the planet.
$540m value of the Luna
115 metres length of the Luna
10 VIP rooms
50 crew members
THE CASE SO FAR
December 2016: Tatiana Akhmedova is awarded a $641-million divorce settlement by the British courts against her ex-husband Farkad Akhmedov in what is believed to be at the time the largest single divorce settlement in UK history.
February 8, 2018: The Dubai International Financial Centre Courts orders the ‘freezing’ of Luna to prevent the ship from leaving Dubai.
April 10: The DIFC Courts grant permission to Akhmedov’s trust, Straight Establishment, to seek appeal of the original ‘freezing’ order and ask for an “oral hearing” before the court to argue their case.
April 19: Justice Haddon-Cave in London orders Farkad Akhmedov and Straight to “vest M.V. ‘Luna’ in Ms Akhmedov’s name”.