29 February 2024
MBLS provided legal advice to one of the world's largest specialized auctions for the sale of seized maritime assets (merchant vessels and yachts) regarding the procedure for obtaining the rights to sell the yacht Royal Romance, which is owned by an off-shore company of the family of former People's Deputy of Ukraine Viktor Medvedchuk, accused of treason in favour of russia. The Royal Romance yacht, built in 2015, 92 meters long, worth 200 million euros, is one of the most expensive in the world.
Royal Romance, registered in the Malaysian Yacht Registry (formerly the Cayman Islands), is currently under arrest in the Croatian port of Trogir and is to be handed over to a person legal entity selected on competitive basis by the National Agency of Ukraine for the Identification, Tracing and Management of Assets Derived from Corruption and Other Crimes (ARMA), for the arranging of the sale of a yacht on electronic bidding, according to the decision of the Croatian and Ukrainian courts.
The work of MBLS lawyers was complicated by: the imperfection of the procedure for conducting electronic biddings for the sale of seized property established by the Cabinet of Ministers of Ukraine, which, due to non-compliance with modern world practice, did not allow the involvement of well-known international auctions; lack of all necessary documents at the disposal of ARMA; actions of the yacht owner, who changed the place of registration of the vessel; the imperfect work of ARMA, which, in particular, did not properly secure its rights to dispose of the yacht; existing sanctions of the USA, Great Britain, Canada, Australia and Ukraine against the Medvedchuk family.
In order to solve the listed problems that hindered the sale of the yacht, MBLS lawyers prepared and sent to ARMA proposals for improving regulations, in particular, the procedure for conducting electronic biddings, in order to bring it into line with the best international practices. The specified changes to the Resolution of the CMU dated September 27, 2017 No. 719 "On approval of the Procedure for the sale of seized assets on electronic biddings" were adopted by the Cabinet of Ministers on November 14, 2023, at the request of ARMA.
MBLS also provided ARMA with information regarding the current registration of the yacht and the procedure for securing ARMA's rights to dispose of the yacht in a foreign jurisdiction, in particular through court proceedings. MBLS shared with ARMA the modern international practice of buying and selling super-yachts on electronic biddings, the procedure for organizing and holding a bidding at the international level, drawing up a sales contract and the procedure for registering/re-registering the ownership rights of the new owner in Ukraine, the Cayman Islands and Malaysia, documents required for this, the procedure for assigning the ship an International Maritime Organization (IMO) number, solving other problems of a legal, technical and economic nature, in particular, regarding the procedure for disposing of the assets of sanctioned persons.
Unfortunately, ARMA did not take all necessary actions to increase the attractiveness of the yacht for recognized international auctions and buyers. In particular, it did not resolve existing problems with the ship's documents, did not secure its rights to dispose of the yacht, which made the lot unattractive to potential participants in the selection of the auction organizer for the sale of the yacht, who value their own reputation. As a result, the budget of Ukraine risks not getting the proper value for the yacht. We hope that Ukrainian state bodies will continue self-improvement, and professional personnel will come to work in them, who will better take care of the state interests and image of Ukraine in the world.