L1T FM Holdings UK Limited & Anor, R (on the application of) v Chancellor of the Duchy of Lancaster in the Cabinet Office
| Judge | Mrs Justice Farbey |
| Neutral Citation | [2024] EWHC 2963 (Admin) |
| Date | 20 November 2024 |
| Counsel | Tom Hickman Kc,Paul Luckhurst,Rory Phillips Kc,Georgina Wolfe,Emmanuel Sheppard,Karl Laird,Tim Buley Kc,Alex Jamieson |
| Year | 2024 |
| Court | King's Bench Division (Administrative Court) |
Case No: AC-2023-LON-000405
IN THE HIGH COURT OF JUSTICE
KING'S BENCH DIVISION
ADMINISTRATIVE COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Date: 20/11/2024
Before :
THE HONOURABLE MRS JUSTICE FARBEY
- - - - - - - - - - - - - - - - - - - - -
Between :
THE KING
ON THE APPLICATION OF
(1) L1T FM HOLDINGS UK LIMITED
(2) LETTERONE CORE INVESTMENTS S.À R.L. Claimants
- and -
CHANCELLOR OF THE DUCHY OF
LANCASTER IN THE CABINET OFFICE
(formerly SECRETARY OF STATE FOR
BUSINESS, ENERGY AND INDUSTRIAL
STRATEGY)
- and -
UPP CORPORATION LTD
Defendant
Interested
Party
Tom Hickman KC and Paul Luckhurst (instructed by Akin Gump LLP) for the Claimants
Rory Phillips KC, Georgina Wolfe, Emmanuel Sheppard and Karl Laird (instructed by
Government Legal Department) for the Defendant
Tim Buley KC and Alex Jamieson (instructed by the Special Advocates’ Support Office) as
Special Advocates
The Interested Party did not appear
Hearing dates: 9 – 12 July 2024
Judgment Approved by the court for handing down
MRS JUSTICE FARBEY:
Introduction
1. The Claimants are companies within the LetterOne Group (“the Group”) which was
formed for the purpose of making long-term investments in other companies in the
energy, technology, health and retail sectors. By Re-amended Grounds for judicial
Order”) made by the Secretary of State for Business, Energy and Industrial Strategy
Investment Act 2021 (“the NSIA” or “the Act”) on grounds of national security. It
required the First Claimant to divest itself of 100% of its shareholding in Upp
Corporation Limited (“Upp”), a fibre broadband start-up company.
2. The Order was made by the Secretary of State personally (not by officials on his behalf).
Responsibility for the Order moved from the Secretary of State for BEIS to the
Chancellor of the Duchy of Lancaster who also was appointed Secretary of State in the
Cabinet Office. I shall for convenience refer to the person with responsibility for the
Order at any one time as the Secretary of State or (for emphasis when applicable) the
Secretary of State for BEIS.
3. The formulation of the grounds of challenge has evolved. I do not criticise the Claimants’
lawyers who have assisted the court by their comprehensive consideration of a statutory
scheme which (I was told) has not been the subject of previous case law. Nevertheless,
for the sake of fairness to the Secretary of State as well as for clarity, I will hold the
Claimants to their pleaded Re-amended Grounds. Consequently, this judgment will not
follow the precise scheme of the Claimants’ skeleton argument or of the Claimants’ oral
submissions.
4. The Re-amended Grounds may be summarised as follows:
i. Human rights: Under Ground 1, the Claimants contend that the Order breached
section 6(1) of the HRA as being disproportionate and contrary to the Claimants’
right to the protection of property guaranteed by Article 1 of the First Protocol to
two elements. Under Ground 1A, it is submitted that the Order was
disproportionate because the Secretary of State could and should have imposed less
intrusive measures than divestment. Under Ground 1B, the Claimants contend that
incurred by divestment gave rise to a breach of A1P1.
ii. Common law principles of public law: Under Ground 2, the Claimants contend
that the Order breached public law principles. Ground 2 is also divided into two
elements. Under Ground 2A, it is submitted that the Order was based on irrelevant
considerations or a failure to have regard to all relevant considerations; and it was
made in breach of the duty of inquiry established by Secretary of State for
(“the Tameside duty”). Under Ground 2B, it is submitted that the Order was
irrational in the Wednesbury sense (see Associated Provincial Picture Houses Ltd v
Wednesbury Corpn [1948] 1 KB 223).
Judgment Approved by the court for handing down
iii. Procedural fairness: Under Ground 3, the Claimants contend that the decision to
make the Order was procedurally unfair because (i) the national security risks were
not sufficiently disclosed to the Claimants before the Order was made; and (ii) the
Claimants were not given a fair opportunity to address the concerns of the Secretary
of State’s advisers in relation to measures falling short of divestment.
5. The Re-amended Grounds sought a declaration (under section 4 of the HRA) that section
26(3)(b) of the Act was incompatible with the Claimants’ Convention rights. While the
claim for a declaration of incompatibility was not formally withdrawn, it was not
advanced in any meaningful way in the Claimants’ skeleton argument (where it was
simply footnoted as an issue that might arise) and was not pursued in oral submissions. It
does not feature in the agreed List of Issues for the court’s determination. Having heard
no argument to the contrary, I proceed on the basis that the statutory scheme (if lawfully
operated) is compatible with the Claimants’ human rights.
6. In resisting the claim, the Secretary of State relies on sensitive material that cannot be
placed in the public domain for reasons of national security. Following the court’s orders
Security Act 2013, the Secretary of State relies on both “open” material (disclosed to the
Claimants and their lawyers) and “closed” material (not disclosed to the Claimants or
their lawyers). The claim was listed for a “rolled-up” hearing. I received written and oral
submissions in open and closed session. Mr Tom Hickman KC and Mr Paul Luckhurst
appeared on behalf of the Claimants. Mr Rory Phillips KC, Ms Georgina Wolfe, Mr
Emmanuel Sheppard and Mr Karl Laird appeared for the Secretary of State. Mr Tim
Buley KC and Mr Alex Jamieson appeared as Special Advocates, representing with skill
the Claimants’ interests in the closed session from which the Claimants and their lawyers
were excluded. Upp filed an acknowledgement of service as an Interested Party, stating
that it did not intend to contest the claim. It has taken no further part in the proceedings.
The NSIA
7. The NSIA received Royal Assent on 29 April 2021. For all material purposes, its
provisions came into force on 4 January 2022. Its long title states that it is an “Act to
make provision for the making of orders in connection with national security risks arising
from the acquisition of control over certain types of entities and assets; and for connected
purposes.” As expressed in Mr Phillips’ skeleton argument, the Act aims to prevent
hostile actors from acquiring control of critical parts of the United Kingdom’s economy
and infrastructure by empowering the Secretary of State to “call in” and assess a
qualifying acquisition on grounds of national security.
Assessment of acquisitions on national security grounds
8. Section 1 of the Act empowers the Secretary of State to issue a “call-in notice” if the
Secretary of State reasonably suspects that a “trigger event” has taken place that has given
rise or may give rise to a risk to national security. Although other forms of acquisition
may qualify as trigger events, I shall for simplicity explain the scheme of the Act by
reference to the acquisition of shares. A “trigger event” includes (among other share
acquisitions) a situation where the percentage of the shares that a person holds in a UK
company increases from less than 75% to 75% or more (sections 5, 7 and 8 of the Act).
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1 cases
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L1T FM Holdings UK Ltd v Chancellor of the Duchy of Lancaster in the Cabinet Office (formerly Secretary of State for Business, Energy and Industrial Strategy)
...substantively. I refuse permission to apply for judicial review on Grounds 1A, 2A and 2B. The claim is accordingly dismissed. I reach[2024] EWHC 2963 (Admin) THE HONOURABLE Mrs Justice Farbey Case No: AC-2023-LON-000405 IN THE HIGH COURT OF JUSTICE KING'S BENCH DIVISION ADMINISTRATIVE COURT......