USM Group, whose assets include one of Russia’s largest metals producers, Metalloinvest, said it was considering legal action against any party seeking to buy iron ore it claims was expropriated by a Ukrainian court.

The High Anti-Corruption Court of Ukraine (HACC) ruled on September 25 to confiscate the property of Metalloinvest Group currently located in Ukraine, including over 165,000 tonnes of Russian-produced iron ore belonging to the Swiss-registered trading arm, Metalloinvest Trading AG.

In a statement on September 27, USM called the HACC decision “a flagrant example of the unlawful and unfounded “legalization” of the appropriation of private property,” which USM said had been blocked by Ukrainian authorities for over two years.

“We will make every effort to ensure that international courts properly assess the unlawful actions of Ukraine’s executive and judicial authorities. The holding’s companies also reserve the right to pursue legal action against any buyers who acquire unlawfully expropriated products, either directly from Ukrainian authorities or through third parties,” USM said.

Metalloinvest Trading AG is part of USM, where Russian-Uzbek billionaire Alisher Usmanov owns a non-controlling stake. Usmanov was placed under Western sanctions in spring 2022, shortly after the start of Russia’s so-called “special military operation” in Ukraine, due to his alleged ties to the Kremlin which he has denied.

Before Russia's incursion into Ukraine in February 2022, Metalloinvest Trading AG purchased iron ore from Russian producers and exported it to third countries via Ukraine. In February 2022, Ukrainian authorities detained several shipments of the company’s products and later seized them as part of what USM claims were fabricated criminal cases.

The court case with the HACC was initiated in July 2024 following a request by Ukraine's Ministry of Justice and based on Ukraine’s "Law on Sanctions," which Kyiv says allows it to confiscate property in Ukraine that belongs to Russian sanctioned companies and individuals.

Ukraine's Security Service (SBU) previously stated that the iron ore was of Ukrainian origin, stored illegally in the country's ports, and intended for shipment to Russia. The Economic Security Bureau of Ukraine also alleged that Metalloinvest had tried to transfer the ore to Ukrainian-based companies to avoid paying local taxes.

USM and Metalloinvest have denied all allegations made by the Ukrainian authorities.

This issue gained traction in the international media. But earlier this month, following an approach by Usmanov’s lawyers, the German newspaper Münchner Merkur deleted an article that had claimed Metalloinvest attempted to “smuggle hidden supplies of raw materials” from Ukraine into Russia to support its military campaign as the claim was unsubstantiated, the court said.

This week, the HACC also ruled to transfer 100% of the shares in Peter-Service Ukraine, a Ukrainian subsidiary of the Russian firm Nexign, to the benefit of Ukraine.

In the statement, USM also said that Metalloinvest Trading AG, Nexign and their owners would take steps to defend their legal rights and interests, including seeking compensation for reputational damage.

Critics point out that foreign-owned properties confiscated in Ukraine are technically protected under international law, which offers the possibility to challenge the HACC’s decision. Peter-Service is likewise eligible for protection as it is a foreign investment by a Russian company in Ukraine, USM claims.

“The actions of the Ukrainian authorities are illegal and constitute a gross violation of property rights and other human rights protected by international agreements, as well as the rights of investors protected by a number of investment protection agreements,” a representative of USM’s legal department told bne IntelliNews.

“This is why the illegal decision made by the High Anti-Corruption Court will be challenged by the Group not only within Ukraine's legal system but also in competent international judicial bodies,” the representative said.