Tigers Realm Coal has lost its legal bid to challenge Australia’s sanctions against Russia
Tigers Realm Coal could face criminal prosecution after failing in a legal bid to challenge Australia’s sanctions against Russia, legal experts say.
Tigers Realm Coal has lost its legal challenge to Australia’s international sanctions against Russian coal sales, after the Federal Court dismissed the company’s argument that operating its coal mines in the pariah state should not be subjected to the embargo.
The ASX-listed Russian coal miner had argued the federal government’s sanctions against the “transport” of Russian coal should not apply to its operations in the country, as the company was only moving the coal to a port and onto ships, and buyers were transporting it across international borders.
Judge Geoffrey Kennett dismissed the company’s legal bid on Tuesday, upholding the position of the Department of Foreign Affairs and Trade that moving coal from the mine to the port put the company in breach of the anti-Russia sanctions.
“The activities of the Russian subsidiaries involve actions which constitute ‘sanctioned imports’,” Justice Kennett found.
The decision could force Tigers Realm to sell or abandon its Russian coal operations, the company warned in its February annual financial statements.
“If the Federal Court forms the view that (the regulation) does, in fact, apply to a material aspect of the company’s activities, the company will be required to give urgent consideration as to the steps required to ensure compliance with the sanctions (including the possible cessation of those operations),” Tigers Realm said.
“In such an eventuality, the company’s ability to continue as a going concern is likely to be impacted.”
Tigers Realm booked a $46m net profit in 2023 off revenue of $140m. The company has operated thermal and coking coal mines in Siberia since 2017.
One of its major shareholders is the Russian Direct Investment Fund (RDIF), a sovereign wealth fund set up by Vladimir Putin’s regime, which is also the subject of sanctions by Australia and the US.
Legal experts had previously warned that Tigers Realm’s bid could seriously undermine Australian sanctions against Russia over the Ukraine invasion if it succeeded.
The ruling should also lead to criminal charges against the company, given it has been operating its mines since DFAT gave official advice to Tigers Realm about sanctions breaches last year, according to Melissa Chen, a senior at the Australian Centre for International Justice.
“It is vital that Australian agencies take action to investigate any breaches of Australia’s sanctions laws, and consider criminal prosecution in light of today’s court outcome and Tigers Realm’s unceasing mining activities in Russia since Russian coal was made an import sanctioned good in April 2022,” she said.
“Lack of accountability breeds impunity. Australia needs strong, enforceable sanctions laws to effectively condemn Russia’s immoral and illegal invasion of Ukraine, and to cut off the financial resources which fuel the corrupt and murderous Putin regime.”
The company’s directors considered plans to sell or redomicile its business in early 2023, but abandoned privatisation plans. Tigers Realm’s shares last traded at 0.55c, valuing the Russian coal miner at $65.3m.