Bids come in as superyacht linked to Russian businessman goes up for auction
A superyacht linked to a Russian billionaire whose name appears on the UK’s Ukraine sanctions list will be sold at auction today in Gibraltar, although it will likely be some days before the outcome of the sale is known.
Bids are already coming in for the Malta-flag MY Axioma, which was arrested last March over an admiralty claim filed by J.P. Morgan Bank.
The deadline for bids to be submitted to Howe Robinson, the broker handling the sale on behalf of Gibraltar’s Admiralty Marshall, is midday today.
In the run-up to auction day, representatives of numerous potential buyers have inspected the vessel, which has remained berthed alongside in Gibraltar since its arrest.
The process to submit online and fax bids opened 36 hours prior to the deadline, with bids also accepted in a sealed envelope up to midday today.
Once the deadline passes, the broker handling the sale will assess the bids and provide advice to the Admiralty Marshall.
But the process of selecting the winning bid will include due diligence on the aspiring purchaser, which could take some time.
Once the winner is selected, the buyer will have three days to make a deposit of 10% of the purchase price, with the balance to be paid within five days of that initial payment, along with the cost of any bunker fuel and lubricants on board.
The vessel will be sold to the highest bidder and the proceeds of the sale will be paid into the court, which will then determine the priority of any claims made by creditors against those proceeds.
Although the vessel was arrested against the backdrop of the Ukraine crisis and the sanctions imposed by the UK and other countries, the case is an admiralty claim filed by J.P. Morgan in respective of a bank loan.
Court documents state the bank had provided a Euro20.5m loan in December 2021 to Pyrene Investments, a company registered in the British Virgin Islands whose then shareholder was a Cypriot company called Furdberg Holing Ltd, itself owned by Russian businessman Dmitry Pumpyanskiy.
Mr Pumpyanskiy was the guarantor of the loan, which was to be used for a mortgage on the vessel, the bank says in its claim.
J.P. Morgan filed the claim and arrested the vessel in Gibraltar after Mr Pumpyanskiy was placed on the UK sanctions list, making him subject to a travel ban and an asset freeze instruction as part of London’s response to the invasion of Ukraine. Under Gibraltar law, the UK sanctions automatically apply here too.
At the time and against the backdrop of the Ukraine crisis, Gibraltar had already banned the entry of vessels linked to Russia or sanctioned individuals.
But the Gibraltar Government cleared the entry of the superyacht Axioma after confirming it would be arrested in connection to the admiralty claim filed in the Supreme Court.
Lawyers for the bank told the Supreme Court that Mr Pumpyanskiy’s inclusion on the sanctions list amounted to a breach of the loan agreement.
The bank also told the court that shares of Furdberg had been transferred to Dmitry Faber Silaev on March 4 this year, five days before Mr Pumpyanskiy was placed on the UK sanctions list, and that this too constituted a breach of the loan agreement.
In its claim, J.P. Morgan sought a declaration from the court that the mortgage was valid and binding and payment of the Euro20.5m loan plus interest and costs.
It also sought an order for the sale of the vessel pursuant to that claim.
Earlier this year, Puisne Judge Karen Ramagge Prescott ruled in favour of the bank and ordered that the vessel be sold at auction by the Admiralty Marshall.
A document prepared by Howe Robinson ahead of the sale described the 72 metre Axioma as “a beautifully designed and stylishly appointed” vessel boasting “luxurious furnishings” and offering sufficient space to accommodate 12 guests in six cabins, as well as having 12 cabins for its 20-strong crew.
The Axioma, which has a top speed of 17 knots, was built in 2013 by Ursa Dunya Yachts.
Its exterior was designed by Sterling Scott Yacht Design and its interior by the late Alberto Pinto, a photographer and interior designer based in Paris who also designed the interiors of apartments, corporations, hotels and jets.
J.P. Morgan is represented in the claim by Raymond Triay, from Gibraltar law firm Triay.