Courtroom
Fridman Challenges Luxembourg With $16 Billion Lawsuit

In a dramatic turn of events, Mikhail Fridman, the renowned Russian-Israeli billionaire, has filed an unprecedented $16 billion lawsuit against Luxembourg. The high-stakes legal action targets Luxembourg's decision to freeze his assets following his inclusion on the EU sanctions list. This lawsuit, brought under the 1989 Bilateral Investment Treaty (BIT) with the former Soviet Union, challenges the legitimacy of sanctions imposed by Western governments.

Backed by a powerhouse legal team featuring prominent figures such as Baiju Vasani, a leading authority in Investor-State Dispute Settlement (ISDS); Cherie Blair's London-based firm Omnia, known for its expertise in BIT cases; and the French firm KIEJMAN & MAREMBERT, which successfully challenged the first wave of EU sanctions, Fridman is arguing that Luxembourg's actions breach the BIT's investor protections. They seek compensation for the total market value of Fridman's assets in February 2022.

Fridman's claim asserts that Luxembourg's actions constitute an unlawful expropriation of his investments, which span several countries, including the UK, the Netherlands, Germany, Ukraine, Russia, Kazakhstan, and Spain. This case marks the first significant legal challenge to the broader sanctions framework, questioning their validity as a diplomatic tool.

The crux of Fridman's argument is that the sanctions, imposed in response to Russia's actions in Ukraine, were applied without due process, resulting in the seizure of his assets without adequate compensation. Despite a recent ruling by the EU General Court that removed him from a significant sanctions list, his assets remain frozen, severely restricting his ability to manage or benefit from his investments.

The arbitration will be conducted under the 2021 UNCITRAL Arbitration Rules, with the Hong Kong International Arbitration Centre proposed to administer the case and Hong Kong as the seat of arbitration. This setup aims to provide a fair and neutral platform for resolving complex international disputes.

This case stands out for its ambitious challenge to the legitimacy of unilateral coercive measures (UCMs). While previous claims have contested individual sanctions, this lawsuit seeks to address the fundamental legality of sanctions as a policy tool.

As this landmark case unfolds, it represents a crucial moment for Fridman in his effort to restore his assets and reputation, and it raises significant questions about the future of sanctions and their impact on global business and legal norms.