UK threatens to sue Abramovich to release frozen money from Chelsea sale

By Sachin Ravikumar and Andrew MacAskill

LONDON (Reuters) -The British government has said it is fully prepared to take Russian businessman Roman Abramovich to court to help release frozen funds from his sale of Chelsea soccer club that were intended to help victims of Russia's war in Ukraine.

Britain sanctioned Abramovich in a crackdown on Russian oligarchs after Moscow's 2022 invasion of Ukraine, triggering a rushed 2.5 billion pound ($3.4 billion) sale of the club on condition that the money would be used to create a humanitarian charity.

The money has been frozen in a British bank account because of a disagreement between Abramovich and the government over how the money should be spent, according to people with knowledge of the matter.

They said Britain wants the funds spent only in Ukraine in line with a wider European push for Moscow to foot the bill for the deaths and destruction caused by its full-scale invasion but Abramovich wants the money to go to all victims of the war.

British finance minister Rachel Reeves and foreign minister David Lammy said in a joint statement the government was ready to take Abramovich to court.

"We are deeply frustrated that it has not been possible to reach agreement on this with Mr Abramovich so far," they said.

"While the door for negotiations will remain open, we are fully prepared to pursue this through the courts if required, to ensure people suffering in Ukraine can benefit from these proceeds as soon as possible."

New York-based law firm Kobre & Kim, which represents Abramovich, did not immediately respond to a request for comment.

Reuters reported in March that Britain was considering legal action over the issue.

George Foulkes, a member of parliament's upper house who has campaigned for ways to release the money, said the government may look at ways to use other frozen Russian assets to help victims if a legal route cannot be found to resolve the disagreement.

"It is symbolic, and I think if we can do this it would set a precedent, and we could look at all the other money tied up in property, banks and overseas territories," he told Reuters.

Chelsea was sold to a consortium led by U.S. investor Todd Boehly and private equity firm Clearlake Capital in May 2022. The sale hinged on Abramovich not benefiting from it.

($1 = 0.7398 pounds)

(Reporting by Sachin Ravikumar and Andrew MacAskill, Editing by Timothy Heritage)