On 29 July 2025, the UK Supreme Court issued a decision that will shape the future of sanctions law. In the joined appeals of Shvidler v Secretary of State for Foreign, Commonwealth and Development Affairs and Dalston Projects Ltd v Secretary of State for Transport ([2025] UKSC 30), the Court upheld sanctions against a prominent businessman and the detention of a superyacht, despite serious impacts on the individuals involved.

The ruling confirms that the UK government has broad powers to impose sanctions in response to international crises, and that these powers will not be easily overturned, even when they interfere with personal freedoms and property rights.

The Appellants: The People and the Yacht

Eugene Shvidler is a Russian-born businessman with British and US citizenship. In March 2022, he was made subject to a worldwide asset freeze because of his long-standing ties to Roman Abramovich and the Russian steel giant Evraz plc. The sanctions meant that almost all of his assets were locked down; even everyday spending required special government approval. The effect on his family was dramatic, children forced out of schools, disrupted living arrangements, and loss of financial autonomy.

Eugene Shvidler is a Russian-born businessman with British and US citizenship. In March 2022, he was made subject to a worldwide asset freeze because of his long-standing ties to Roman Abramovich and the Russian steel giant Evraz plc. The sanctions meant that almost all of his assets were locked down; even everyday spending required special government approval. The effect on his family was dramatic, children forced out of schools, disrupted living arrangements, and loss of financial autonomy.

Both Shvidler and Dalston Projects argued that the sanctions went too far, breaching fundamental rights to private and family life (Article 8 of the European Convention on Human Rights) and the right to property (Protocol 1, Article 1).

How the Court Reached Its Decision

The Supreme Court applied a four-stage proportionality test, a structured way of asking whether government measures that interfere with rights go further than necessary.

• Legitimate Aim: All judges agreed the purpose was clear, to deter and limit Russia’s aggression in Ukraine. This, the Court said, is a vital public interest.
• Rational Connection: The majority accepted that:
  • Shvidler’s links to Abramovich and Evraz made his inclusion in sanctions rational, since it added to the “cumulative pressure” on Russia.
  • Detaining the M/Y Phi also made sense economically, cutting off income streams and sending a strong signal, even if Naumenko himself was not politically active.
• Less Intrusive Means: Neither Shvidler nor Dalston Projects could point to a realistic alternative that would be equally effective but less restrictive.
• Fair Balance: The Court acknowledged the hardship caused but held that:
  • Naumenko’s wealth meant the financial loss was not life-changing.
  • For Shvidler, although the restrictions were “drastic”, basic family needs could still be met through the government’s licensing system. The Court stressed that sanctions must often be severe if they are to be effective.

A Strong Dissent

Not all the judges agreed. Lord Leggatt delivered a powerful dissent, arguing that the link between Shvidler’s designation and any actual impact on the Kremlin was weak and speculative. He warned that the Court was giving too much deference to the executive, eroding judicial oversight in politically sensitive cases. His opinion will likely bring debate for years to come about the proper limits of government power in sanctions regimes.

Why this Case Matters

This decision is a landmark moment for sanctions law in the UK.

• For individuals and businesses: It signals that challenging sanctions will be extremely difficult. Courts are prepared to accept harsh impacts on individuals if the broader foreign policy aims are judged important enough. Relief may only come through the government’s licensing process rather than through the courts.
• For governments: The ruling confirms wide discretion to design sanctions with broad economic and social effects, even on people with indirect or limited connections to the target regime.
• For the legal community: The case sets out a clear framework for how proportionality will be assessed, while also highlighting the risks of unchecked executive power. The dissent shows that there is still room for judicial resistance, though it is in the minority.

The Bigger Picture

The Shvidler and Dalston Projects judgments underline a central truth about sanctions: they are designed to hurt. They work by disrupting lives, businesses, and assets, in the hope that this pressure contributes to political change. The Court recognised this, stressing that severity and open-ended restrictions are not a flaw in the system but part of its design.

At the same time, the case raises important questions about fairness and human rights. How far can governments go in punishing individuals who may have limited or no political influence? Where is the line between effective foreign policy and overreach?

The EU and Cyprus Dimension

While this case was decided under UK law, its importance extends across Europe. The EU has adopted an equally strict stance, imposing wide-ranging sanctions on Russian individuals and entities through successive Council Regulations. Unlike the UK, EU member states, including Cyprus, apply sanctions directly and uniformly, leaving little room for national variation.

For Cyprus, this means:

• EU sanctions lists apply automatically and must be observed by banks, corporate and fiduciary service providers, and businesses.
• Any transaction or asset potentially linked to a designated person is at risk of being frozen.
• Licences and exemptions (such as for humanitarian expenses, legal fees, or essential business operations) require Ministry of Energy, Commerce and Industry (MEK) approval.

This makes the Cyprus framework particularly strict and highlights the importance of timely legal guidance in ensuring compliance.

How AGPLAW Assists

At AGPLAW, we advise clients daily on how sanctions affect their assets, businesses, and transactions. Our services include:

• Sanctions screening and compliance reviews, including EU, UK, OFAC and UN consolidated lists.
• MEK applications and approvals in Cyprus, including for unfreezing funds or permitting specific transactions.
• Structuring and advising corporate service providers on risk assessments when dealing with Russian or other high-risk clients.

This case reminds us that sanctions are not just political measures but daily legal realities that affect contracts, banking, shipping, and corporate structuring. Understanding them requires a combination of legal expertise and strategic planning.

Conclusion

The UK Supreme Court has made it clear: in times of international conflict, the balance will tip heavily in favour of national security and foreign policy objectives, even at the expense of individual rights.

For businesses, high-net-worth individuals, and their advisers, this ruling is a reminder that sanctions are not only a political tool but also a legal reality that can drastically affect lives and assets. For governments, it is confirmation that the courts will generally back strong measures, provided they are tied, even indirectly, to legitimate aims.

The debate is not over. Lord Leggatt’s dissent ensures that questions of proportionality and executive overreach will remain live issues. But for now, the UK has drawn a clear line: sanctions are here to stay, and they will be enforced with uncompromising strength.

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