Controversy over how to use frozen Russian assets to help Ukraine

Last week, the supreme court ruled that Phi, a now-derelict superyacht seized in March 2022, would remain in London, writes Emma Haslett

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The £38m superyacht Phi should be earning her owner about £563,000 a week, hosting ultra-rich holidaymakers on trips around the sparkling Mediterranean.

Instead, she is stuck at a dingy mooring in Canary Wharf, shrouded in scaffolding, her smart blue paintwork peeling and her electrics failing.

And that is where, for the foreseeable future, she will stay, after the Supreme Court last week dismissed an appeal against the vessel's continued detention. More than three years after the Russian invasion of Ukraine, the judgment raised a question: what is the future of Russian assets frozen by the British state?

In March 2022, Phi was in the UK having the finishing touches put to her plush interiors, which include an "infinite" wine cellar, fluted leather wall panelling, an outdoor cinema and a freshwater swimming pool.

Then Russia invaded Ukraine and the British government launched an aggressive round of sanctions against the Russian state and individuals connected to it.

Since then, it has frozen £25bn of Russian-owned assets - including Phi. According to the judgment there is no evidence that her owner, Russian businessman Sergei Naumenko, has any connection to Vladimir Putin. He has not been sanctioned and internet searches reveal almost nothing about his life and business interests.

The value of the Phi is dwarfed by that of other frozen Russian sovereign assets: held in Belgium, they are worth about £160bn. Nevertheless, former transport secretary Grant Shapps said detaining the yacht had "turned an icon of Russia's power and wealth into a clear and stark warning to Putin and his cronies".