Russian Yacht Axioma Auctioned Off Amidst Spirited Bidding

The Russian-owned superyacht Axioma has been auctioned off to the highest bidder, completing the first seizure and forfeiture process for a sanctioned asset since the beginning of punitive sanctions on the Russian elite earlier this year. According to Bloomberg, the luxurious vessel attracted no less than 63 bids.

In March, the $75 million, 236-foot Axioma was arrested in Gibraltar. Her owner, Russian billionaire Dmitry Pumpyansky, had been added to U.S. and UK sanctions lists in connection with the invasion of Ukraine. Western sanctions have targeted business magnates who have ties to Russia's political leadership; Pumpyansky's pipemaking conglomerate is essential to state oil and gas production, and he was personally awarded the Order for Merit to the Fatherland by Russian President Vladimir Putin in 2014. Among other effects, his listing breached loan covenants on a $20 million mortgage on the yacht. 

Axioma's case was unique among sanctioned Russian yachts. She was seized on behalf of creditor JP Morgan, not on behalf of a law enforcement agency, and her sale proceeded in the same manner as for any vessel arrested for unpaid debts. Gibraltar's admiralty courts are known for the efficient processing of vessel seizures, and the full procedure was finished in about five months. 

The value of the sale was not disclosed, but $20 million will be reserved to repay Pumpyansky's debt to JP Morgan. Any additional proceeds will be used to cover the cost of port fees, brokers' fees, crew wages and other typical costs of vessel upkeep; the balance, court sources told Reuters, will likely be frozen, since Pumpyansky is under sanctions. 

Other yachts seized for sanctions enforcement, like the Amadea, will have to await a longer and more complex series of proceedings, since the action was initiated by a government rather than a creditor.