Luxury Shipyard That Built Jeff Bezos' Abeona Superyacht Sues Government Over Sanctions

File this under "here's yet another surprising outcome of sanctions" and a new page in the twisted saga they paved the way for.

Damen Yachting, the biggest shipyard in the Netherlands and the go-to specialist when it comes to shadow vessels, military ships, custom superyachts, or dredgers, is suing the local government over the 2022 sanctions against Russian oligarchs, claiming loss of profit.

Shortly after Russian troops invaded neighboring Ukraine in February 2022, EU country members, the U.S., and the UK, among others, decided to instate sanctions against Russian oligarchs in the hope that cutting off the cash flow into Russia would convince Putin to cut the war short. This led to a wave of seizures of luxury assets, including superyachts, private jets, auto fleets, and real estate, many of which remain in a state of limbo as we speak.

In the European Union, sanctions also meant that shipyards working with any Russian citizen could no longer continue doing so, regardless of whether the citizen was on a sanctions list or not. Indirectly, sanctions impacted local businesses, and no form of compensation was offered. That's one aspect that Damen Yachting is taking issue with, as sanctions meant severing contracts, shutting down Russian branches and cutting off partners, and calling off deliveries of completed projects.

No compensation for damage

Damen Yachting is perhaps one of the best-known names in the luxury sector. Under the Amels brand, it's delivered an impressive list of custom superyachts – Here Comes the Sun is just one of those, the proverbial jewel in the crown. Under the SeaXplorer and the Yacht Support brands, it's responsible for truly iconic builds, including the Dapple shadow vessel and the more recent Pink Shadow and Abeona, the latter being the support vessel for Jeff Bezos' (in)famous Koru, the world's largest sailing yacht.

Despite the extensive Damen portfolio, the name is synonymous with multi-millionaire toys, specifically shadow vessels that toe the fine line between custom superyachts (of the most luxurious kind), competent explorers, and floating garages that can fulfill a gazillion other functions at the same time, including that of a state-of-the-art hospital or laboratory.

As it so happens – and as the world got to find out with the overly enthusiastic wave of seizures that followed the publication of the first list of sanctions – most of these multi-millionaires are Russian oligarchs by birth, if not necessarily by association with Putin. Since the Netherlands decided Damen couldn't do business with them regardless of whether they were sanctioned or not, business was cut short.

Arguably worst of all, Damen says in court filings obtained by one media outlet, is that the government didn't offer any compensation for the damage, unlike it did in the aftermath of the 2020 international health crisis with businesses affected by the shutdown, i.e., a force outside their control.

The lawsuit is seeking unspecified damages over loss of profit but doesn't mention an estimate of how much of it Damen believes it lost. In a statement, the shipyard notes that they have every intention of abiding by the sanctions but that the same sanctions rendered them "unable to deliver a number of orders [,] the consequences of the sanctions are fully classified as entrepreneurial risk by the government and that there is no form of compensation."

Money has no allegiance

While word of the lawsuit broke earlier this month, the filing itself is not recent: Damen filed the court papers in May this year. Even so, the earliest possible hearing date is for next year, so it doesn't look like the sanctions saga is anywhere near its final chapter.

Other than the aforementioned statement, the shipyard has refrained from further commenting on the proceedings. The Dutch Ministry of Foreign Affairs has declined to offer a comment on the record, but "sources" are already whispering about how the lawsuit paints Damen in a very unfavorable light – the money-grabbing kind.

According to one such insider, the lawsuit shows that "the true north on Damen’s moral compass always seems to point at the owner’s wallet." As they say, money has no allegiance and no loyalty, and this is proof.

The court filings mention no amount for the lost profit, but just to be clear, we're talking about a fortune. Shipbuilding is a very lucrative business in the Netherlands, and sanctions put a serious damper on it indirectly by barring the business community from dealing with any Russian citizen.

Figures released by the Chamber of Commerce for 2020 offer a hint of how much cash shipbuilding brings in: Damen, Feadship, Oceanco, and Heesen had combined sales of more than €1.5 billion ($1.6 million) that year. Even with sanctions, Damen Yachting was able to produce €2.5 billion ($2.64 billion) worth of ships in 2022.