Shvidler v Secretary of State for Foreign, Commonwealth and Development Affairs

A court deciding whether executive action is compatible with Convention rights must assess proportionality for itself. It may nevertheless give substantial weight to an executive assessment within areas of special constitutional responsibility and institutional competence, including foreign policy and national security.

On appeal, review of the lower court’s proportionality assessment is ordinarily the starting point. A fresh assessment is justified by special factors, including an issue of general principle, legislation of wider application or exceptional social importance.

An individual sanction may be rationally connected to its objective through its plausible contribution to the cumulative effect of a sanctions regime. Severity and indefinite duration do not prevent a fair balance where the objective is exceptionally important, the connection is sufficient and licensing provides an effective safety valve.

These conjoined appeals concerned measures imposed under the Russia (Sanctions) (EU Exit) Regulations 2019. The Foreign Secretary designated Eugene Shvidler, a British citizen formerly connected with Roman Abramovich and Evraz plc, producing a worldwide asset freeze. The Transport Secretary detained the yacht Phi, beneficially owned by Sergei Naumenko, a wealthy Russian resident without established political connections.

The High Court dismissed both challenges: [2023] EWHC 2121 (Admin) in Shvidler and [2023] EWHC 1885 (Admin) in Dalston Projects. The Court of Appeal dismissed both appeals in [2024] EWCA Civ 172; [2024] 1 WLR 3327.

The Supreme Court considered the courts’ respective roles in proportionality review, the four-stage proportionality analysis, the adequacy of the stated grounds for detaining the Phi and the contingent conversion claim.

1. Disposition. Both appeals were dismissed. Lord Sales and Lady Rose, with whom Lord Reed and Lord Richards agreed, held that both sanctions were proportionate and lawful. Lord Leggatt agreed that the Dalston Projects appeal should be dismissed but would have allowed Mr Shvidler’s appeal.

2. A court considering compatibility with Convention rights must determine proportionality for itself. Its function is not confined to reviewing the public authority’s process or asking whether its conclusion was rational. The authority remains the primary decision-maker, however, and the court does not substitute its own policy choice. Appropriate weight must be given to assessments falling within the authority’s democratic responsibility and institutional expertise: paras 120–130.

3. An appellate court ordinarily begins with a review of the first-instance proportionality assessment. It should make a fresh assessment where special factors justify doing so, including the wider relevance of the issue, a challenge to legislation, conflicting authority or exceptional social importance. Both appeals were test cases of substantial public significance, so the Supreme Court assessed proportionality afresh: paras 142–165.

4. The objective of limiting and deterring Russian aggression against Ukraine was exceptionally important. Each measure had to make a plausible contribution to the sanctions regime, but it did not have to achieve the objective by itself. The Phi’s detention had economic and political connections to the objective because it deprived a wealthy Russian resident of income and a prestige asset. Mr Shvidler’s designation could add pressure through his association with Mr Abramovich and signal the consequences of involvement in strategically significant Russian business: paras 166–202.

5. No less intrusive measure capable of pursuing the objective without unacceptable compromise was identified. Both measures struck a fair balance. The Phi caused no hardship in ordinary life, while licensing and judicial review could address maintenance. Mr Shvidler’s worldwide asset freeze was severe and open-ended, but his family’s core needs could be met and the Treasury licensing system operated as a safety valve: paras 203–213.

6. Selective designation was not disproportionate merely because other eligible people remained undesignated. Each additional rational designation could contribute to cumulative pressure, and case-by-case selection was compatible with a tailored response. The absence of a published designation policy did not alter that conclusion: paras 214–224.

7. The Phi Direction adequately stated its grounds by identifying Mr Naumenko’s ownership, control or operation of the vessel and his connection with Russia. It need not specify which ownership link applied or provide fuller reasons: paras 225–235. Since detention was lawful, the conversion claim failed; broader questions about conversion following invalid detention were left open: paras 236–244.

8. Lord Leggatt dissented on Mr Shvidler’s appeal. He considered the asserted connections between the designation and its aims too speculative to satisfy rational connection and regarded the worldwide, indefinite asset freeze as unjust and disproportionate: paras 245–324.

1. United Kingdom Supreme Court: Dismissed both appeals in [2025] UKSC 30.
2. Court of Appeal: Dismissed the conjoined appeals in [2024] EWCA Civ 172; [2024] 1 WLR 3327.
3. High Court—Shvidler: Garnham J dismissed the challenge to the maintained designation in [2023] EWHC 2121 (Admin).
4. High Court—Dalston Projects: Sir Ross Cranston dismissed the challenge to the Phi Direction in [2023] EWHC 1885 (Admin).