Executive Summary
- The case concerns Agrofirma Oniks LLC and Agro UG V LLC’s claim against ABH Ukraine Ltd, EMIS Finance B.V., Mikhail Fridman, and PJSC Sense Bank regarding negligent advice and misstatements about Loan Participation Notes (LPNs).
- Claimants invested over $11.4 million in LPNs, relying on statements by Mr Fridman and Alfa Bank Ukraine representatives that the investments were safe.
- Since February 2022, coupon and redemption payments on LPNs have ceased, causing significant losses.
- Mr Fridman, a dual Russian-Israeli national and former UK resident, was sanctioned by the UK and EU in March 2022, freezing his UK assets and cancelling his UK leave to remain.
- The court considered whether service of proceedings on Mr Fridman at his London residence was valid amid his travel ban and asset freeze.
Sanctions Highlights
- Mr Fridman was designated under the Russia (Sanctions) (EU Exit) Regulations 2019 and the Sanctions and Anti-Money Laundering Act 2018 on 15 March 2022.
- His UK assets, including Athlone House, were frozen.
- He became an “excluded person” under the Immigration Act 1971, cancelling his UK leave to remain and imposing a travel ban.
- Sanctions directly impact Mr Fridman’s ability to respond or appear in UK proceedings.
- The case highlights enforcement challenges against sanctioned individuals with frozen assets and restricted movement.
Emerging Risks
- Enforcement of judgments against sanctioned oligarchs is complicated by asset freezes and travel bans.
- Service of legal documents may be contested due to defendants’ restricted physical presence.
- Financial instruments like LPNs linked to sanctioned entities pose heightened counterparty and credit risks.
- Potential for increased litigation involving cross-jurisdictional enforcement and sanctions compliance.
- Risk of reputational damage for financial institutions involved in advising or issuing such instruments.
Geopolitical Impact
- The case underscores tensions between UK/EU sanctions regimes and Russian oligarchs with international business ties.
- Highlights UK’s active use of sanctions to restrict Russian influence post-Ukraine invasion.
- Mr Fridman’s dual Israeli nationality and UK residency history illustrate complex nationality and jurisdictional issues in sanctions enforcement.
- Reflects broader geopolitical efforts to isolate Russian economic actors linked to the Alfa Group consortium.
- The dispute occurs amid ongoing UK, EU, US, and Ukraine coordination on sanctions and financial restrictions targeting Russia.
Economic Intelligence
- Claimants’ losses exceed $11.4 million, reflecting significant financial exposure to LPNs issued by EMIS Finance B.V.
- LPNs were marketed as inflation-protected, safe investments but proved high-risk and illiquid post-2022.
- The case reveals vulnerabilities in financial products tied to sanctioned Russian entities.
- Currency exposure noted: damages sought in USD, with GBP equivalent provided.
- The freezing of assets and travel bans may delay or complicate recovery of funds.
Strategic Recommendations
- Litigants should verify service methods and locations carefully when defendants are subject to sanctions and travel bans.
- Consider alternative jurisdictional strategies and enforcement mechanisms for sanctioned individuals.
- Financial institutions must enhance due diligence on products linked to sanctioned entities to mitigate credit and reputational risks.
- Monitor evolving sanctions regimes closely for impacts on cross-border litigation and asset recovery.
- Engage with sanctions compliance experts early in disputes involving designated persons to navigate legal and regulatory complexities.
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**Source Notes:** *Sanctions Intelligence Digest* — [https://empyreanprotocol.com/litigation/view/www.bailii.org/ew/cases/EWHC/Comm/2025/300.html](https://empyreanprotocol.com/litigation/view/www.bailii.org/ew/cases/EWHC/Comm/2025/300.html)