The Yacht Law Podcast
The Yacht Law Podcast
The Legal Battles of Amadea and Alpha Nero: Constitutional Rights, Maritime Law, and Political Fallout
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The high-stakes drama of seized superyachts unfolds as landmark legal rulings reshape our understanding of who truly owns these floating palaces. Following Russia's invasion of Ukraine in 2022, vessels like the $225 million Amadea and Alpha Nero became battlegrounds where constitutional rights, maritime law, and international sanctions collide.
Judge Ho's recent 80-page ruling on Amadea delivers a masterclass in beneficial ownership principles, cutting through layers of offshore companies to determine that despite a title transfer to Edward Kudanatov, the Karamov family remained the true beneficiaries. The judge's detailed analysis of "dominion and control" establishes precedent for similar cases worldwide, explaining how courts distinguish between mere title holders and those who actually benefit from and control these assets.
Meanwhile, Alpha Nero's saga continues with yet another lawsuit filed by the daughter of the original owner, this time in US federal court after losing multiple cases in Caribbean jurisdictions. The new filing seeks financial records related to $10 million allegedly "missing" from the yacht's auction proceeds—a claim likely to face dismissal under the doctrine of comity, where courts typically defer to other jurisdictions that have already ruled on substantially similar matters.
The future of Amadea seems to hang in the balance following the disbanding of the Klepto-Capture Task Force under the new administration. With Amadea costing approximately $1 million monthly to maintain, however, pressure mounts to conduct a proper judicial sale following internationally accepted standards. Importantly, it's worth noting that a successful auction will require not just due process and proper notice, but also clear commission structures for yacht brokers who introduce potential buyers—without whom the pool of qualified purchasers for these extraordinary assets would dramatically shrink.
Want to learn more about the complex legal issues affecting yacht ownership worldwide? Subscribe to The Yacht Law Podcast for expert analysis and insights from Michael Moore and Diane Byrne.
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Hiring a lawyer is a big decision. Visit Moore & Company for the legal team's qualifications and experience. And, to learn the latest about superyacht launches, shipyards, designs, and destinations, visit Megayacht News.
Welcome everyone. Michael, it feels like it's been a pretty busy start to 2025 from a legal standpoint, given that there have been some pretty major developments with yachts that were seized from the Russian owners. Right Amadea has been in the news, the Yad Al-Faneiro has been in the news, and they've been in the news for different reasons, so why don't we take a look into what the developments were with each of those and what those developments could possibly mean?
Michael Moore:Absolutely. I think, to refresh everyone's recollection, february 24th 2022 is the day Russia invaded Ukraine. That was the beginning of the beginning, and it was very soon thereafter that you had this idea. Sanctions would be imposed by the UK governments, the European Union and the United States of America. That was, for a lot of people, the introduction of something called OFAC, which was the Office of Foreign Asset Control. It was kind of uncharted territory. No one really knew what was going on.
Michael Moore:But then this new thing appeared on the scene, the so-called Task Force, klepto-capture, which is kind of a little bit of an oxymoron.
Michael Moore:Klepto-capture was thought, I think, originally to be where a kleptomaniac would steal things from a legitimate government through bribery or other means and then suddenly the United States would step in through its klepto-capture office in Washington and try to assist that government in getting its money back, also try to arrest the perpetrator. But along the way, real things were happening in real time, rapidly, and I think one of the earliest activities was the fact that the United States seized Amadeo in Fiji. They actually had it seized by April of 22. So that was remarkable, and then, of course, the government had some activities, but what is not in debate is that a year and six months passed before the government of the United States filed its action in the Southern District of New York to actually determine who was the true owner the beneficial owner, I think, as they call it in the yacht world of Amadea. So Amadea is one of the first cases that really gets into issues having to do with beneficial ownership and specifically defines what that is versus title.
Diane M. Byrne:Right. There were some really interesting developments too along the way. With the Amadea case, there was a suit filed by a gentleman who claimed to be the actual beneficial owner, who was a different person than who the Department of Justice said was the owner.
Michael Moore:Right.
Diane M. Byrne:The person who claimed to be the owner was Edward Kudenatov.
Michael Moore:Exactly, the owner was Eduard.
Diane M. Byrne:Khudainatov and in his lawyer's filing. This is one of the things I was really fascinated by in his lawyer's filings to contest it, they didn't put forward information saying no really, I'm the legitimate owner, I am not under sanctions, therefore this arrest is illegal. It was a Fourth Amendment argument that the US should not have tried to use a warrant to seize, search and seizure. Basically is what the Fourth Amendment is all about. I found that interesting because I did not think that the Fourth Amendment extended to non-citizens and even beyond US borders, and apparently the judge upheld the aspect of it not extending beyond US borders, but it can actually be used for non-Americans. So what was their thinking behind using that? I guess there was precedent before.
Michael Moore:Yeah, I think that what happened. There was a lot of adjusting course along the way, but if you start out with the April 22nd seizure, it is pretty consistent with the ultimate filing in the lawsuit that was filed in New York.
Michael Moore:Everything's kind of set there in a million dollars a month from April 13 of 22 to the actual filing, as you put it, in that late October 23. But I think the government's position did remain fairly consistent, and that is Kerimov was was the true beneficial owner and that Kuda Natov, if that's the way you say his name, was a false claimant, that he was really a straw man. I think that you've touched on some things that I think all of the lawyers who think, of course, legally, start out with. How do you interpret this new law which the government just passed, which is called the International Emergency Economic Powers Act, the IEPA? You know what does this mean and what are we to make of it. And basically, both Congress and the president agreed that this was a good thing to use in these circumstances.
Michael Moore:These are things that I think started back during the Patriot Act days with the bombing of the Twin Towers and so forth. But basically, the Fifth Amendment, the Fourth Amendment, let's start with the Fifth Amendment. The Fifth Amendment is a most people think of the Fifth Amendment. The Fourth Amendment, let's start with the Fifth Amendment. The Fifth Amendment is a. You know, most people think of the Fifth Amendment as I have the right to remain silent and the right against self-incrimination, and that's certainly part of it. But it's also hugely a part of what the Fifth Amendment is the idea that no person shall be deprived of their life, liberty or property without due process of law. That's that's the so-called takings clause. You can't just go take people's property, but I think it's now been kind of well settled, actually, that it can apply to non-citizens. It concerns more than anything the way I interpret it and of course these are concepts that are very, very high level constitutional law questions, but it has more to do with the rights of the taker. You know the United States being the taking party and the law since forever, for a hundred years, basically, has said that you just can't go taking people's property, seizing it and then calling it your own. There is a due process, right. And then you get into more specifically the Fourth Amendment.
Michael Moore:The Fourth Amendment actually deals with seizure. Okay, it sets out kind of more specific rules as to taking of assets. You can take things, but you have to do it in a proper way. I guess the way I would describe that it has to be a kind of a permanent taking, not a temporary taking, which is interesting because an admiral, so you do seize vessels from time to time. But then there's always this idea that you have this immediate hearing, a constitutionally guaranteed post seizure hearing. Why it's it has to be prompt, which is to say the property being seized is not held for an unreasonable amount of time, and there has to be a full and fair hearing as to whether that taking was in some way proper. It's usually involving mundane things like nonpayment of dockage or nonpayment of bunkers or non-payment of some bill of the vessel. It can also deal with the non-payment of crew wages, for example, but it is a temporary deprivation of property and there comes the right of notice. You have to let the world know. It's kind of legal fiction, but you do publish to the world A lot of these things, by the way, were not observed by the government in the taking of the Amadea, and that's because it wasn't a true admiralty proceeding.
Michael Moore:If you look at the lawyers involved, for example and I'm sure they're fine lawyers, or at least I assume they are Strangely enough, just for what it's worth, as a maritime lawyer in practice since 1974 and practicing in New York for the first five years of my practice, I didn't recognize the firms or the lawyers. It means nothing, it's just a personal thing. But the one law firm that I did recognize a very prominent law firm is a firm called King Spalding. I never did understand why they actually intervened and it seemed to be as much as anything. They intervened because they were concerned about their own exposure, but it never really became an issue in the Amadea case.
Michael Moore:The Amadea court really did not get into these wonderful concepts of due process and unjust takings and rights under the Fifth Amendment. He went straight to the fundamental issues of who is the beneficial owner and even to the point of recognizing that the title could arguably be a title that was correctly in the name of Kuda Natal's interest. But ultimately the court found that Kuda Natal was a false claimant and that the true owner, the true beneficial owner, was the family Karamov that was mentioned in the first day of the taking about the first filing, that they didn't go straight to the heart of the ownership, that they used the Fourth Amendment as the argument.
Diane M. Byrne:I would have thought that they would have tried to just go straight to true beneficial ownership, but after the judge denied that argument the Fourth Amendment argument they appealed again. And then that's the ruling that just came out in February of this year where the judge said that he only had bare title. Quote unquote to the yacht and that Kerimov's family really truly was the beneficial owner for all intents and purposes, since they had paid various bills, etc.
Diane M. Byrne:Etc. Has there ever been anything? Just out of curiosity, has there ever been a case like that, to your recollection, where, say, a Fourth Amendment or maybe even a Fifth Amendment argument was made first and then, on appeal, after losing that, they said okay, well, here's the beneficial ownership information.
Michael Moore:Yeah, I think that the thing about the ruling that did come out in the latter part of February and then the first part of March a mantra in Moore and Company Company, because and I think is embedded in almost all of these cases that have to do with rights of ownership or claims of title, or whether a contract is or is not a bare boat charter, these are concepts and they're basically three completely separate and unique concepts that you often read are kind of lumped together but are critical to understanding the entire process in maritime law and specifically understanding that title and specifically bear title, which is what judge talked about, is just one of the three concepts, the others being possession and ownership Three different concepts. A lot of people you know, you hear people say registered owner, beneficial owner. That's a very correct and somewhat specific delineation between the two types of ownership. But the Judge Ho kind of amplifies the analysis as he goes through this 80-page opinion and, by the way, it's just a fascinating read because it's a. It's literally a tutorial on two things. It's a tutorial on the rules of evidence, what comes into the court, what the court considers and what the court does not consider, um, and then it's a tutorial on on what is meant by beneficial ownership as opposed to record ownership and what is the effective title on the proceedings? And in reality no one contested the title in this case. They all admitted the title had transferred. They admitted the title had transferred in this contract. That occurred in the latter part of September 21, which would have been a few months before the invasion of Ukraine. So right away red flag that transfer in those days was probably legitimate. But the question is when you're dealing with all these offshore companies and you have one company called Erig Aragal, erri GA El Marine Limited, and then you have another company called a mill, marin mi LL email and my RI in mill Maureen investments LTD, and no one can test that the title was transferred. But the entire question is now that we admit that who is the true owner, who is the beneficial owner? And the court basically came to a decision that Kuda Natab was not the real owner and Kerimov was was Kerimov family.
Michael Moore:He uses words he doesn't say, for example, sometimes he doesn doesn't say possession, he says dominion and control, and that's a very good, a very good way of putting it. It's great to see a judge who's not a quote maritime judge. He's not sitting in admiralty. Well, he's sitting on a forfeiture action and he's sitting on something that is relatively new, this emergency powers act thing but, to use words, that was not the standard phraseology that you see on the maritime cases, but but for sure, and for example, when he says the financial stake, you say, if you think about it, there's always a human being involved in all of these things.
Michael Moore:You can have 50 trusts and 50 record ownerships or 50 corporate entities or LTDs and INCs and corporations, llcs, but at the end of the day, there's a person. The Internal Remedy Service calls it beneficial ownership. That's actually an IRS concept. Who benefits? Who benefits from the ownership? And Judge Ho got right down to it and basically said that possession, dominion and control of the financial state was transferred in September 2021, but that's not the issue.
Michael Moore:The issue is who is the true owner, who is the true beneficial owner of that vessel? And one of the things that I think that the case would make and hopefully this podcast will be so entertaining to the yachty world is that it's just kind of a who's who in many ways of the yacht world, of people that have been pulled out of you know various roles and relationships to the vessel and then called in to testify. And it was just interesting to see that. It was interesting to see how, when you really got down to, when you get past the judicial interpretation of the IEEPA Act and the cases that interpret it and get by the Fifth Amendment issues and the Fourth Amendment issues and the Fourth Amendment issues, the judge, Ho kind of ignored that from what I could see, and just said look, I just want to know who owns the damn boat. And the government says that Kerimov owns the boat and this fellow Kudinov says that is his boat. Well, let's just find out. And so what you then had was this multi-country you know, fiji, the United States and Russia contest to see, at the end of the day, who the judge believed and who the judge didn't believe. And it was great because, you know, we saw a lot of our friends and associates and people that we do know from the industry.
Michael Moore:And it was interesting how the proposed witnesses were often excluded.
Michael Moore:To the extent they weren't outright excluded, they were found to be that their testimony was just hearsay. So it's a tutorial on hearsay. A lot of lawyers have trouble with offering out-of-court statements in court to prove the truth of the matter asserted. That's classic hearsay definition, but they still try to do it and Judge Ho would repeatedly would say well, that's very nice and thank you very much, but that's hearsay. You don't really have any personal knowledge. Therefore I'm not accepting your testimony.
Michael Moore:But bottom line is that you have this beneficial owner, that it seems pretty clear that either you have the Kerimov family, which is identified by Judge Ho as the true beneficial owner, has the real wealth spending well over a billion dollars, maybe a billion, five or three boats, and the judge talks about those three boats. You can imagine this judge that's been appointed for life, you know, sitting in New York City and you can tell that he actually loved doing this. It's not every day that judges issue 80-page orders. There's so many aspects of this case. I mean this thing was filed back in 23 and finally gets a ruling in 25.
Diane M. Byrne:So one of the questions I think that can safely be raised right now is what is the future of Amadea? This ruling by Judge Ho seems to pave the way towards the true civil forfeiture and therefore auction.
Michael Moore:Right.
Diane M. Byrne:But, huge but small word, big implications. The new US attorney, Pam Bondi, just ordered the dismantling of that kleptocapture task force.
Michael Moore:Right.
Diane M. Byrne:So all of the individuals who were on that task force have been reassigned to their original posts. So, does that mean it is unlikely? I know we don't have a crystal ball, but does it seem like it would be unlikely for the Department of Justice to try to proceed with an auction?
Michael Moore:I mean they're going to have to do that and the sooner the better. Seed with an auction. I mean they're going to have to do that and the sooner the better. I think we talked about this in one of our previous podcasts, about the idea of the. You know how do you conduct a proper auction? Let's go see your earlier question about Alpha Nero. What kind of form is this auction going to take?
Michael Moore:Now, the Alpha Nero is kind of almost like a textbook example of how not to conduct an auction. But even as these events are happening, you have this thing called the Beijing Convention, which is a United Nations convention Signed on. You'd have to go out and I haven't looked at the latest signatories, but I know that you have to sign up. You have to sign on to these things and find out who is a signatory. But maritime law has always wanted uniformity. There's always been this question of how do you properly sell a boat that's been seized or somehow not needs to be auctioned off by a court of law through the gold standard, which is a martial sale. So how do you conduct a proper judicial sale? What form will it take? I certainly hope it will take something that looks a lot like the Beijing Convention. The Beijing Convention was negotiated and it's been accepted by a number of countries around the world. It is all about due process, proper notice.
Michael Moore:I don't know that there are any claimants to this vessel. There was only one claimant in the lawsuit. Kudanatov was the only one. Kerimov could not claim Kerimov and Kerimov's wife and Kerimov's daughter all of whom tried to give evidence could not do that because they are the designated sanctioned nationals. They are on the sanctions list.
Michael Moore:Now, specifically to your point, the Trump administration has in fact started signaling that they are kind of not interested in these cases. They were too late to stop Judge Ho, but now Lisa Monaco is out of office she was on the klepto-capture office. Merrick Garland is out of office. Pam Bondi's in office. What they will do, I think, is, regarding all other prosecutions, they may very well just do away entirely with the designated sanctions registries and say we're just not interested in that sort of thing and you now can do business with them.
Michael Moore:But it still remains the fact that Amadeus owned by the United States of America today. A million dollars a month, not that anyone's counting, except that Elon Musk is going to be upset when he finds out that they've squandered I don't know a mere $24 million or something for keeping this boat. You can look at it as waste on the one hand, but on the other hand, everybody got paid. I mean, people were making money, people were getting paid for dockage, insurance and so forth. It's not really just burning $100 bills on the corner. People were getting paid.
Diane M. Byrne:You don't want an asset to deteriorate too.
Michael Moore:Exactly. You want to keep the asset that you're not going to own in the future to be kept up. I don't know who has been in charge of maintaining Amadea. Just stay focused on Amadea, because it would be the same with Alfa Nero, on Olimpia, because it would be the same with Alpha Nero. Alpha Nero was, although it was technically seized by the government well, it was seized by the government of Antigua and Barbuda. In reality, it was driven by the United States and the United States sanctions list, and everything that was done in Antigua and Barbuda was done with the approval of the State Department.
Michael Moore:But now you're into judicial sales. What is the court going to do? I think Judge Ho, I think the United States will move to sell the boat. That motion will be granted, but it needs to follow a certain order. It needs to follow due process. It needs to give notice to the world. I think the brokers.
Michael Moore:Let me tell you something. This is free advice for whoever's in charge. If you don't make it clear that brokers will get a fee, you will have a fraction of interest in the vessel that you would have if the brokers will get. If the brokers do get paid. That's just the way it works. They don't get out of bed without a chance to make a commission, and understandably so. That's how they make their money.
Michael Moore:Now think about that for a minute. All you got to do is show up with your, with your buyer on your arm, and if your buyer is a successful bidder, that money goes into the court registry. The seller is the United States of America. They do pay the commission, so I would certainly not that anyone's asked me and I'm kind of offended, but the reality.
Michael Moore:I would have said to the judge put a percentage on there. You know, this is a $225 million motor yacht. There are people out there that will buy it all, but they won't even know about it. Generally you get the word from the broker. But I would say, follow the Beijing convention. It has all of the legal protections written into it that give you the safeguards and protections that you need, and you'll have the force of the United States of America's power behind the conveyance of not only title but ownership and possession. And you may even add a little something in there like sea trial and survey or something at the beginning, but at the end of the day, they need to get rid of that boat and they need to get rid of their boats.
Diane M. Byrne:Yeah, absolutely Absolutely. Before we run out of time, I did want to just real quick touch on what's going on with Alpha Nero. Okay, the daughter of the acknowledged original owner has tried multiple times to block first the arrest, then the intended auction and then the eventual sale of the yacht. She's now filed another lawsuit. She's lost all of those lawsuits.
Michael Moore:Right.
Diane M. Byrne:And all have been filed in the Caribbean Right. She just filed in US federal court.
Michael Moore:Right.
Diane M. Byrne:To obtain the financial records of the prime minister, his family member and about a dozen companies that were all involved in the sale last year of the yacht straws. What what could possibly motivate the? Her claim is that there's 10 million dollars from the sale that has gone missing, that it's not documented, so she intends to obtain all these records to see where the money went right now she's lost all these other lawsuits. If she doesn't have proof that $10 million is actually lost, why would the court entertain it?
Michael Moore:I don't think the court will entertain it. I think that if the court does entertain it, she'll lose again. You know, there's a doctrine I think the doctrine that will apply here is called the doctrine of comity and that is the deference that the courts in the United States will give to the courts of Antigua and Barbuda. I think the court would very reasonably say look, I see your point, I see what you're upset about, that you need to go back to Antigua and file an action for the county or something, and file an action for the county or something. But if you read the filing that was filed in New York, it's clearly just the same group of people, the same litigants, right up and down the line.
Michael Moore:It may not be perfect on the Beijing Convention, but they needed to get rid of the boat and they did their sale. They had a bid and they had bidders. But all the people that are mentioned in there you know look, money went here, money went there. Whatever you know, is that really her trouble? Her trouble is she did not win the auction and she did not win her case to prove that she was the beneficial owner. That's as simple as that. I mean, the courts break people's hearts on a regular basis. So she's out of luck. I think she's wasting her time. Apparently. She has time and hopefully has money and she'll take a shot, but I predict it'll be a short shrift.
Diane M. Byrne:Yeah, my gut instinct was telling me that, just from looking at the facts of the cases, obviously not with the legal background. So your legal insight definitely reconfirms what seems to be the case. Well, before we wrap, I know you had a note from a captain following our last podcast about chartering in Alaska, navigating the very particular legal environmental issues up there. So what did he have to say?
Michael Moore:Thank you very much. Yeah, thank you very much, diane. I think one of our listeners very careful listener was a captain named John Halverson. He's a Harvard pilot in Alaska and basically he said that he thought maybe I had overstated things, that all yachts over 65 feet have to employ a pilot and he makes the point that this applies only to foreign flag yachts. But then of course he gets into kind of the what I was trying to do as a catch-all, because there are little rules that apply in different parts of Alaska. But the good news is, all of these rules are designed to protect people and property. But he makes a very nice comment. He says if you're a foreign flag yacht, you should apply for and receive a pilotage waiver. You can receive a pilotage waiver and that goes all the way up to under 71 feet. But basically it's a little bit of a variation of what we were advising on our podcast when I said all yachts over 65 feet.
Michael Moore:My view is be careful and be conservative. You do want to go to the authority that gives these waivers, that is, the Division of Business and so it has to do with the Board of Marine Pilots. But once you get the waiver up to 171 feet. You can then travel all over southeast Alaska which is the important part without a pilot, except if you're transiting the Wrangell Narrows or the Peril Straits.
Michael Moore:Bottom line is my view is go in there, talk to these people, say I am a foreign flag yacht or some US flag yacht. They go okay, you're good, see you later. That doesn't mean it's not going to be in peril. When you go to the Wrangell Narrows and the Peril Straits you might want to get a pilot to help you get through there, just because they would be happy to help you get through those narrows. It's a rocky shore but I like John Halverson's approach. He's saying look, don't be afraid to go to the pilot permitting people. When you first arrive and catch a can, that's usually where you're coming in and sit down with them and say are you a us flag, a foreign flag?
Michael Moore:if you're a foreign flag, you're gonna need a waiver. But if you get a waiver even if you get a waiver be very afraid and the wrangell narrows and the peril straights you. You probably should use a pilot there, because that they're so and treacherous. Local knowledge would be key. It's the pilot that has that local knowledge. So thank you, john Iverson, who's obviously a very knowledgeable pilot himself, and I thought that was very good advice. I wanted to give that a shout out.
Diane M. Byrne:Yeah, absolutely Well, everybody, as always. Thank you for listening. If you have a yacht law question that you would like us to address on an upcoming episode of the Yacht Law Podcast, you can reach out to Michael or me. Our contact information is in the show notes for this episode decisions whether you are a yacht owner, a crew member, someone in the industry or just someone seeking to learn more about the world of yachting. Until next time, I'm Diane.
Michael Moore:Byrne. Michael, thank you as always. I'm Michael Moore signing off.
