U.S. Court Refuses Request to Auction Off Seized Russian Yacht

Amadea (U.S. Department of Justice)

Published Jun 16, 2024 9:37 PM by The Maritime Executive

A federal district court has refused a request from the U.S. Justice Department to allow the sale of the seized Russian megayacht Amadea. The decision means that the U.S. government will continue to pay millions of dollars a year for the vessel's upkeep until the case is concluded.

The vessel at the center of the case is the Amadea, a 350-foot megayacht valued at an estimated $300 million. U.S. authorities believe that her true owner is Suleiman Kerimov, a sanctioned Russian billionaire with connections to Russian President Vladimir Putin. 

According to the U.S. Marshals Service, the vessel costs about $600,000 a month in upkeep, including $360,000 for the crew, $75,000 for fuel for the generators, and about $165,000 for maintenance and miscellaneous expenses. Insurance adds another $140,000 a month, and the next drydocking will cost more than $5 million. Taken altogether, the federal government could spend about $14 million on the vessel this year alone. 

This may seem like a large sum, but to meet the legal standard for a forced sale of the vessel, the government would have to prove that the amount is "excessive." Last week, the U.S. District Court of the Southern District of New York ruled that the Justice Department had not met this bar. 

"The court must not look solely at the total dollar amount of the maintenance costs, but must principally consider whether those amounts are more than what is usual as compared to the maintenance costs for other similar yachts," wrote District Judge Dale Ho. "The court is wary of relying solely on maintenance costs to justify sale, when those costs represent a small fraction of the value of the [yacht] and do not appear to be atypical for property of this type."

Ho's decision is the latest twist in a long-running legal saga, which began in Fiji two years ago. In April 2022, the Amadea sailed into Lautoka, Fiji, where U.S. authorities were waiting with a court order to detain and search her. (Among other things, they found what may or may not be a real Faberge egg on board.)

Amadea in Fiji (U.S. Department of Justice)

The vessel's holding company filed a suit in Fijian courts to block the seizure, arguing that the true owner is not Kerimov, but a different wealthy Russian - former Rosneft executive Eduard Khudainatov, who is not under sanctions. 

The FBI and the Department of Justice were able to convince Fijian courts that Khudainatov was a "straw owner," without real ties to the vessel. With permission to seize the yacht secured, FBI agents boarded Amadea in Lautoka and set sail for San Diego. The yacht has been berthed on the U.S. West Coast ever since, and the Justice Department and the vessel holding company continue to battle over the yacht's future in federal court.