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Record Divorce Settlement Sparks Dispute over Megayacht

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The Luna at the Port of San Diego in 2013, before her sale and refit (Sam Morris / wikimedia)

By MarEx 2018-06-06 20:44:00

Courts in Dubai and the UK are deciding the fate of one of the world's most valuable ultra-luxury yachts, the 380-foot expedition-class vessel Luna. She is presently detained at Port Rashid while her current owner, Russian oil and gas magnate Farkhad Akmedov, disputes a claim to the ship's title brought by his ex-wife, Tatiana Akhmedova. 

In 2016, London's High Court awarded Ms. Akhmedova 40 percent of her ex-husband's fortune, a share equal to about $600 million. It is believed to be the UK's largest-ever divorce judgment. Farkhad Akhmedov has not paid, she says, and the judge recently asserted that the Russian billionaire has taken "elaborate steps to conceal his wealth" and to avoid enforcement of the judgment. The High Court declared a global asset freeze on Mr. Akhmedov's holdings, and in February, the court moved to request authorities in Dubai to freeze the Luna. Dubai's DIFC Courts agreed and detained the vessel. 

The legal owner - a trust in Lichtenstein called Straight Establishment - has won the right to appeal the freeze. Through a spokesman, Mr. Akhmedov's legal team asserted that Dubai's courts have "no right to enforce any order in favor of Ms. Akhmedova since [Luna] is not owned by Mr. Akhmedov but by a family trust that exists for the benefit of his whole family." Ms. Akhmedova's legal team disputes this characterization of Straight Establishment's status, noting that the UK High Court has determined the trust to be "another ‘cipher’ and alter ego of [Mr. Farkhad Akhmedov] and another attempt by [Akhmedov] to evade enforcement."

Mr. Akhmedov acquired his fortune through investments in Russia's oil and gas sector, notably in the Bechtel-founded natural gas firm Northgas. He gave half his stake in Northgas to state-owned Gazprom in 2005 to gain access to the Russian gas pipeline system, and he sold his remaining shares to Novatek in 2012 for $1.4 billion. 

In 2014, Mr. Akhmedov acquired the 2010-built Luna from his friend Roman Abramovich for $360 million, about $185 million less than her assessed value at the time of construction. Ahkmedov commissioned a $50 million refit of the four-year-old vessel, including a significant investment in fairing and polishing her hull, a new teak deck, new interiors and other aesthetic improvements. Luna is fitted with defensive measures in addition to luxury amenities, including bulletproof windows, an anti-drone system and an anti-missile system. In April, the High Court assesses her value at $465 million.