Certain Underwriters at Lloyds London v HM Treasury
| Jurisdiction | England & Wales |
| Judge | Mrs Justice Lang |
| Judgment Date | 07 November 2019 |
| Neutral Citation | [2019] EWHC 3182 (Admin) |
| Date | 07 November 2019 |
| Docket Number | CO/3340/2019 |
| Court | Queen's Bench Division (Administrative Court) |
[2019] EWHC 3182 (Admin)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT
Royal Courts of Justice
Mrs Justice Lang
CO/3340/2019
The Queen on the application of
and
APPEARANCES
Ms S. Fatima QC and Ms N. Patel (instructed by Clyde & Co.) appeared on behalf of the Claimants.
Mr R. O'Brien (instructed by the Government Legal Department) appeared on behalf of the Defendant.
THE INTERESTED PARTIES did not attend and were not represented.
The Claimants have applied for permission to seek judicial review of the Defendant's refusal to give them information regarding assets held in UK bank accounts in the names of the second, fourth, fifth and sixth Interested Parties (“IPs”) and frozen pursuant to Consolidated Regulation (EU) No. 36/2012 (“the Regulation”).
The Claimants are a consortium of underwriters who were the insurers of Egypt Air Flight 648 which was hijacked on 23 November 1985. On 12 April 2012 the United States District Court, for the District Court of Columbia, gave judgment in favour of the Claimants on their claim that certain Government agencies and officials of IPs 1, and 3 were State sponsors of that terrorist attack. The US Court awarded the Claimants just over 50 million US dollars.
On 1 March 2018 the Claimants obtained judgment in the Commercial Court for the enforcement of the US judgment in the UK, together with interest and costs.
Article 18 of the Regulation permits the Defendant to release frozen funds or economic resources in order to satisfy a judgment enforceable in the UK. In order to facilitate such an application, the Claimants made a request for information to the Defendant's Office of Financial Sanctions Implementation (“OFSI”). The Claimants proposed that the information be disclosed only to the members of a confidentiality ring and would be subject to confidentiality undertakings, and used only for the purpose of satisfying the UK judgment.
In a decision dated 23 May 2019, the Defendant, while accepting that it held some information relating to the Frozen Assets, refused to disclose any such information. The Defendant considered that:
(i) It could not lawfully make the disclosure sought. Disclosing the information would not be consistent with the purpose for which it was provided, as mandated by Article 29.2 of the Regulation, i.e. to facilitate compliance with the Regulation.; and
(ii) “Facilitating compliance” with the Regulation meant only facilitating the asset freeze or preventing funds or economic resources being made available to or for the benefit of designated persons, not administering any derogation from the asset freeze set out in the Regulation.
The Claimants' grounds of challenge in the judicial review claim are that the Defendant:
(i) Failed to take proper account of a relevant consideration, namely Article 18, in determining that disclosing the information would not facilitate compliance with the Regulation for the purposes of Article 29.2;
(ii) Erred in law and/or fettered its discretion in construing the purpose of the Regulation as being solely the freezing of assets by OFSI, to the exclusion of other purposes recognised by the Regulation, including facilitating access to judgment for judgment creditors like the Claimants, by enabling frozen assets to be released in accordance with the conditions set out in Article 18.
(iii) Failed to take proper account of further relevant considerations, namely that the undertakings and the provision of a confidentiality ring would ensure that the information was used solely for a purpose recognised by Article 18 and, therefore, that releasing the information would fall within the scope of Article 29.2.
Service on the IPs
IPs 1, 2 and 3 were named as IPs because the relevant banking details are being sought to assist in the enforcement of the UK judgment against them.
IPs 2, 4, 5 and 6 were named as IPs because the claim may affect the confidentiality of their banking details in the UK.
IP 4, who is on the list of sanctioned individuals annexed to the Regulation, is the Head of State of IP 1.
IPs 2, 5 and 6 are on the list of sanctioned entities annexed to the Regulation.
IP 5 appears to be the successor in office to IP 3.
IP 6 appears to be, or has been, an agent of IP 1 and/or 2.
Given these connections between the IPs, the Claimants have assumed, for the purposes of service, that the Claimants' attempts to notify IPs 1, 2 and 3 of these proceedings amount, in essence, to attempts to notify IPs 4, 5 and 6 as well, since IPs 4, 5 and 6, like IP 3 at the relevant time, are or have been agents or officials of IP 1 and IP 2.
When the Claimants filed the application for judicial review, they also applied for an order dispensing with service, or in the alternative, a directions hearing to consider the question of service accompanied by an extension of time for service.
On 29 August 2019, Lambert J ordered that a directions hearing take place, and that has been listed before me today.
In summary, the Claimants submit:
(i) s.12(1) of the State Immunity Act 1978 (“SIA”) does not apply in this case and so there is no principled basis for refusing an order dispensing with service on the IPs;
(ii) as a matter of fact, the threshold of exceptional circumstances for dispensing with service is satisfied, and
(iii) as a matter of practicality, there is no reasonable form of viable alternative service beyond the methods that have already been utilised by the Claimants in their attempts to notify the IPs of this claim, and so an order requiring alternative service outside the jurisdiction, even if it was available, would be pointless and lead to further expense and delay.
The Claimants therefore invite the Court to make an order dispensing with service of the judicial review claim form and related documents against the IPs.
In the Summary Grounds of Resistance, the Defendant has stated that it takes “a neutral position on the issue of service on the interested parties, including as to whether the court has the power to dispense with service”. Mr O'Brien filed a skeleton argument and has attended court today but has not sought to participate.
History of service
(1) US proceedings
The US claims were brought against IPs 1, 2 and 3.
Service of the April 2006 action was effected by a DHL courier to the Syrian Ministry of Foreign Affairs (“MFA”) in Damascus, where the Notice of Proof of Service reflects that they were accepted and signed for. IPs 1, 2 and 3 failed to acknowledge or respond to service. That led to a default judgment being made against them.
IPs 1, 2 and 3 then entered an appearance seeking to appeal the judgment in October 2011. However, the appeal was later withdrawn. Thereafter, they sought to object to the judgment only on the basis that the Claimants had not served them by means of an international return receipt mail and that the judgment was not therefore final.
Thereafter, the US District Court held that, in light of Syria's active appearance in the litigation by pursuing an appeal, IPs 1, 2 and 3 had actual notice of the default judgment. On 16 December 2013, the US District Court issued an Order reflecting that the US Judgment was final and enforceable within the USA.
(2) UK proceedings
The Claimants commenced a common law claim in the High Court (the Commercial Court) under CPR 8.1(2)(a) seeking to enforce the US Judgment against IPs 1, 2 and 3, in the belief that assets against which the US Judgment could be enforced had been frozen in the UK.
The Claimants originally sought to bring the UK Proceedings to the attention of IPs 1, 2 and 3 by taking the following steps:
...(i) they sent copies of the claim form with covering letters giving notice of a directions hearing to the MFA on 2 October 2015 in two ways; (a) by email to the email address on the MFA's website and (b) by courier.
(ii) They sent a letter to the US attorneys for IPs 1, 2 and 3 by email and by courier.
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...servants or agents of a State should be served in accordance with s. 12 to be of assistance in that regard. In Certain Underwriters at Lloyd's London and Others v HM Treasury [2019] EWHC 3182 (Admin), the matter decided was that where the claim is one for judicial review, service on Intere......