Europe

Swedish court orders Russia to pay nearly $3M in rental dispute over trade mission

Ruling by Stockholm district court ends 10-year legal battle

Alexandra Enberg  | 08.03.2024 - Update : 08.03.2024
Swedish court orders Russia to pay nearly $3M in rental dispute over trade mission

IZMIR, Türkiye 

A court in Sweden ordered Russia on Thursday to pay more than 16 million Swedish kronor ($1.56 million) in damages over non-payment of rent for the building of the Russian trade mission in Stockholm, according to local media. 

The ruling ends a 10-year legal battle between German businessman Franz Sedelmayer against Russia.

The Munich-based businessman has been waging a legal battle for years to confiscate Kremlin property as compensation for a company he lost in the Russian city of St. Petersburg, saying previously that the Russian state owes him up to $10 million.

Sedelmayer operated a security firm in St. Petersburg in the 1990s but was evicted from its headquarters in a luxury mansion in 1994 by a Kremlin decree.

The seven-story structure still houses Russian trade mission staff, although the building was sold at an auction in 2014.

The mission has also consistently refused to pay rent, which amounts to hundreds of thousands of kronor a month. More than 30 million Swedish kronor (nearly $3 million) is involved.

Russia has also threatened Sweden’s Foreign Affairs Ministry, claiming there would be "negative consequences for intergovernmental relations" as a result of the ministry's involvement in the matter.

When the long-running dispute first began, it concerned whether the land could be put up for forced auction in order to resolve Sedelmayer’s claim with Russia. This eventually came to pass, and the property, which the Russian government owned, was purchased by a Swedish real estate firm in 2014.

According to the property owner's declaration to the court, there are nearly 3,000 square meters (around 32,300 square feet) including apartments and office space and at least six garage spaces and 14 parking places.

The owner of the property claims that although there isn't a lease, the Russian employees are protected by diplomatic immunity and cannot be evicted.

The real estate corporation that owns the building, of which the lawyer Stefan Hage is chairman of the board, said the current situation seems to be a few apartments that are used on and off.

"Most of the apartments are actually abandoned. It is probably the case that most of the spies who lived there had to move home," he told the Dagens Nyheter daily.

The debt can be collected in a few different ways. One can apply for the attachment of Russian assets, request that assets arrive in Sweden soon and be seized by the Swedish Enforcement Authority, or even stop ships from leaving port.

The landowner is currently involved in another legal dispute with the Russian government.

Hage claimed the Russian diplomats have done many things on the land against the owner's wishes, like erecting walls and traffic barriers.

"You're not allowed to expand your claimed immunity by annexing. It is not permitted to erect a tent or alter the fence against the owner's wishes and claim it is protected by diplomatic immunity," he told the daily.

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