Shvidler v Secretary of State for Foreign, Commonwealth and Development Affairs; Dalston Projects Ltd & Ors v Secretary of State for Transport [2025] UKSC 30 (29 July 2025)

Executive summary

The Supreme Court heard two linked appeals about UK sanctions measures imposed under the Russia (Sanctions) (EU Exit) Regulations 2019, as amended, including Eugene Shvidler’s designation and the detention of Dalston Projects Ltd’s yacht, the Phi. The judgment explains that the appeals turn on the proportionality of sanctions under Convention rights and also addresses the proper approach for first-instance and appellate courts when reviewing such executive decisions, as well as separate issues in the Dalston Projects case about the grounds for detention and conversion.

Key points

• Shvidler was designated by the Foreign Secretary on 24 March 2022, with worldwide asset-freezing and criminal prohibitions on dealing with him, subject to exceptions.
• Dalston Projects Ltd’s yacht, the Phi, was detained by the Transport Secretary from 28 March 2022, preventing its use and alleged charter income.
• The Court says the central issue is whether the sanctions’ interference with rights under article 8 and A1P1 is proportionate to the aim of pressure on Russia to end its war against Ukraine.
• The judgment revisits the Bank Mellat proportionality framework and says it is important to clarify how courts should conduct proportionality review and how appellate courts should review first-instance proportionality decisions.
• The source text states the Court also considers whether the Transport Secretary stated proper grounds for detention of the Phi and whether he committed the tort of conversion.
• The sanctions regime discussed is under SAMLA 2018 and the Russia (Sanctions) (EU Exit) Regulations 2019, with the 2022 amendments noted as aimed in part at enabling Ministers to impose sanctions quicker.

Why it matters

The case is directly relevant to sanctions enforcement because it concerns the legality and proportionality of severe asset-freezing and shipping detention measures used against Russia-linked targets. It also matters for sovereign risk because the Court frames sanctions as tools that can have prolonged and potentially devastating effects on affected persons and their business relationships.

Implications

For compliance and enforcement, the judgment underscores that sanctions designations and shipping detentions can be challenged on proportionality grounds under judicial review principles, with article 8 and A1P1 in play. For litigation strategy, it signals that both the substantive proportionality analysis and the standard of appellate review are contested terrain, and that shipping sanctions may also trigger separate public-law and conversion arguments.