Luxembourg Times | 14 August 2024

Russian oligarch launches €15bn lawsuit against Luxembourg

by Kabir Agarwal

Russian oligarch Mikhail Fridman has filed an international arbitration lawsuit against Luxembourg seeking almost €15 billion in compensation, the prime minister’s office confirmed on Wednesday.

The oligarch is seeking billions in compensation after the country froze his assets when he was hit by EU sanctions.

“We can confirm that Mr Mikhail Fridman has launched an international arbitration against the Grand Duchy of Luxembourg in this matter,” a spokesperson for the Ministry of State told the Luxembourg Times in an email. The spokesperson declined to comment further on the lawsuit.

The lawsuit was filed on Tuesday with Fridman proposing that the arbitration be held in Hong Kong, the International Arbitration Review reported.

It is believed to be the first ever such arbitration case Luxembourg has faced under a 1989 treaty signed between the country, the Soviet Union and Belgium which protects investors’ assets from expropriation, nationalisation or “any other measures having similar effects”.

It follows a report in the Russian newspaperVedomosti in May, which said that Fridman is seeking compensation from Luxembourg on $15.8bn (€14.6 billion) of frozen assets. The sum sought by Fridman amounts to more than half of Luxembourg’s annual budget for this year.

Fridman is being represented by a legal team which includes Cherie Blair KC - the wife of former British Prime Minister Tony Blair - according to the International Arbitration Review. Luxembourg has not yet instructed a counsel, the website reported.

Fridman, one of the Russian founders of the Luxembourg-based investment firm LetterOne Holdings, claims that the Grand Duchy’s decision to apply EU sanctions on him after Moscow invaded Ukraine in 2022 is a “grave injustice” and violates international law.

In April, the EU’s Luxembourg-based General Court annulled the sanctions. The bloc’s second-highest court said the reasons for penalising Fridman and his LetterOne co-founder, fellow Russian Petr Aven, weren’t substantiated and their inclusion on the list of sanctioned Russian entities wasn’t justified.

The ruling can be appealed to the European Court of Justice, the EU’s highest judicial body.

Both men and other Russians heading LetterOne resigned as directors of the investment company – which was not hit by sanctions – within days of the Russian assault, and relinquished all positions with the firm in March 2022.