(Bloomberg) -- LetterOne Holdings, the UK investment company founded by sanctioned Russian billionaires, failed to overturn a British government-ordered sale of a broadband service provider after a London court ruled the decision was fair and reasonable.
The High Court dismissed the case brought by LetterOne Holdings, founded by businessmen Mikhail Fridman, Petr Aven and German Khan, which challenged the forced sale. The UK’s decision was fair, proportionate and reasonable, said Judge Judith Farbey.
“The judgment concludes that there was no duty to pay compensation” for any financial loss caused by the sale, the judge said in a summary of the ruling on Wednesday.
The former Business Secretary Grant Shapps ordered LetterOne to sell the 100% stake in Upp Corp., citing a risk to national security. Virgin Media O2 and Nexfibre have since partnered to buy Upp in a deal in 2023. “The group received less for the sale than the £143.7 million that it had by then invested,” the judge said, referring to LetterOne.
The ruling is a boost for the UK’s sanctions regime, with the case one of the first to test new government powers under the National Security and Investment Act. The national security law expanded the range of transactions in which the government could intervene on security grounds.
Fridman, Aven and Khan were sanctioned by the UK as part of a wave of restrictions imposed on prominent Russians in the wake of the invasion of Ukraine.
LetterOne is reviewing the judgment and will consider an appeal, a spokesperson for the company said. “Most regrettable of all, it is businesses and communities across East of England who have lost out on the real benefits that Upp could have brought to this important region.”
LetterOne’s L1T FM Holdings UK Ltd. had acquired a 100% stake in Upp, previously called Fibre Me Ltd., in January 2021, more than a year before Russia invaded Ukraine.
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