PetroSaudi Oil Services (Venezuela) Ltd v National Crime Agency
| Jurisdiction | England & Wales |
| Judge | Mr Justice Griffiths |
| Judgment Date | 21 December 2022 |
| Neutral Citation | [2022] EWHC 3213 (Admin) |
| Docket Number | Case No: CO/4250/2021 |
| Court | Queen's Bench Division (Administrative Court) |
[2022] EWHC 3213 (Admin)
Mr Justice Griffiths
Case No: CO/4250/2021
IN THE HIGH COURT OF JUSTICE
KING'S BENCH DIVISION
ADMINISTRATIVE COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
James Lewis KC and Robert Morris (instructed by Armstrong Teasdale Ltd) for the Applicant
Martin Evans KC and Tom Rainsbury (instructed by Legal Department, National Crime Agency) for the Respondent
Thomas Cockburn (instructed by Government Legal Department) for the Accountant General of the Senior Courts
Hearing date: 22 November 2022
Further written submissions: 24 November 2022
Approved Judgment
On 13 April 2022 I gave judgment on an application by the National Crime Agency (“NCA”) against PetroSaudi Oil Services (Venezuela) Ltd (“POSVL”) for a Prohibition Order and for payment of a fund (“the Fund”) of about £240 million into the hands of a Receiver and (on the cross-application of POSVL) for exclusions for legal and business expenses from the Prohibition Order: National Crime Agency v PetroSaudi Oil Services (Venezuela) Ltd [2022] EWHC 920 (Admin). I will refer to this as my “earlier judgment”.
In brief, on that occasion I decided:
i) That a Prohibition Order should be granted over the Fund.
ii) That the Fund should be paid into the hands of a Receiver.
iii) That, whilst exclusions might be ordered as a matter of principle, the evidence before me did not justify POSVL's claims for exclusions at that stage.
The position of the Accountant General and the variation of para 8 of the Order of 13 April 2022
In relation to payment of the Fund into the hands of a Receiver, para 8 of the Order of 13 April 2022 consequent on my judgment of the same day provided:
“The Receiver will hold the Fund as agent for the Court Funds Office and not as agent for POSVL. The Fund is not being paid to the receiver by way of release from the High Court. The Fund will remain in the control of the High Court and the Receiver will be subject to the orders and directions of the High Court.”
The background to this is explained in my earlier judgment at paras 116–122.
By an application notice dated 10 June 2022, the Accountant General sought an amendment to para 8 because of concerns he had that the statutory régime under which the Accountant General and the Court Funds Office operate would make the arrangement envisaged by para 8 impossible.
In brief, the Accountant General submitted:
i) The Court Funds Office is the name by which the office of the Accountant General of the Senior Courts is known: rule 4 of the Court Funds Rules 2011.
ii) The office of Accountant General is a creation of statute, preserved by section 97(1) of the Senior Courts Act 1981.
iii) The powers of the Accountant General are regulated by Part VI of the Administration of Justice Act 1982 and the Court Funds Rules 2011.
iv) The 1982 Act and the 2011 Rules are not sufficiently flexible to allow the payment of funds in court to a Proceeds of Crime Act receiver or to any third party under an agency arrangement such as that envisaged by para 8 in its original form.
Following discussions between the parties, it was, therefore, agreed that para 8 of the Order should be amended so that paras 7–9 provide as follows:
“APPOINTMENT OF A RECEIVER
7. The Court appoints Adam Ewart as receiver (“the Receiver”) of the Fund pursuant to Article 141I of the 2005 Order.
8. For the purposes of the Administration of Justice Act 1982 and the Court Funds Rules 2011, the Court Funds Office do pay the Fund out to the Receiver. The Receiver will hold the Fund as an officer of the High Court and not as agent for POSVL. The Fund will remain in the control of the High Court pursuant to the prohibition order and the Receiver will be subject to such further orders and directions of the High Court as it may give thereunder.
9. The Fund will be administered by the Receiver pursuant to the orders and directions of the Court from time to time or, in the event of agreement in writing between NCA and POSVL on any point from time to time, in accordance with that agreement.”
I made an order at the hearing on 22 November 2022, varying para 8 of the Order accordingly.
POSVL's application for exclusions
The remaining, contested, issue for me to decide is whether I should now make an order for exclusions in favour of POSVL and, if so, in what respects and in what amounts.
In my earlier judgment, I decided that, whilst exclusions from the Prohibition Order for legal and business expenses might be ordered as a matter of principle, the evidence before me did not justify POSVL's claims for exclusions at that stage (paras 124–137 of my earlier judgment). However, I said (at para 137) that POSVL might apply for exclusions in future, if better evidence could be produced in support of exclusions for particular purposes and in particular amounts, and if a clearer picture of POSVL's other sources of funding could be presented.
By Application Notice dated 5 August 2022, POSVL have taken up that suggestion.
The Prohibition Order was made under Article 141D of the Proceeds of Crime Act 2002 (External Requests and Orders) Order 2005 (“the 2005 Statutory Instrument”). The Application Notice seeks an order pursuant to Article 141G of the 2005 Statutory Instrument for exclusions from the Prohibition Order.
The form of the Order is not attached to the Application Notice but a draft order was included in the bundles provided to me which had been prepared not long before the hearing. The application was supported by the earlier witness statements (which I had decided were inadequate to justify the exclusions sought) supplemented by further witness statements on behalf of POSVL. Other witness statements were filed on behalf of the NCA, which opposes the application.
In a skeleton argument, POSVL says that the purpose of the exclusions is “to enable [POSVL] to comply with its regulatory duties, remain in existence and to defend itself and its assets in proceedings in the UK, Malaysia, the US, France and Switzerland.”
Article 141G
Article 141G is in Part 4A of the 2005 Statutory Instrument and provides:
“ 141G.—Exclusions
(1) The power to vary a prohibition order includes (in particular) power to make exclusions as follows—
(a) power to exclude property from the order, and
(b) power, otherwise than by excluding property from the order, to make exclusions from the prohibition on dealing with the property to which the order applies.
(2) Exclusions from the prohibition on dealing with the property to which the order applies (other than exclusions of property from the order) may also be made when the order is made.
(3) An exclusion may, in particular, make provision for the purposes of enabling any person—
(a) to meet their reasonable living expenses,
(b) to meet their reasonable legal expenses in connection with the prohibition order, or
(c) to carry on any trade, business, profession or occupation.
(4) An exclusion may be made subject to conditions.
(4A) Where the court exercises the power to make an exclusion for the purpose of enabling a person to meet legal expenses that the person has incurred, or may incur, in respect of proceedings under this Part, it must ensure that the exclusion—
(a) is limited to reasonable legal expenses that the person has reasonably incurred or reasonably incurs;
(b) specifies the total amount that may be released for legal expenses in pursuance of the exclusion; and
(c) is made subject to the required conditions in addition to any conditions imposed under paragraph (4).
(4B) The court, in deciding whether to make an exclusion for the purpose of enabling a person to meet their legal expenses in respect of proceedings under this Part—
(a) must have regard (in particular) to the desirability of the person being represented in any proceedings under this Part in which the person is a participant; and
(b) must, where the person is the respondent, disregard the possibility that legal representation of the person in any such proceedings might, were an exclusion not made, be made available under arrangements made for the purposes of Part 1 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012.
(5) If excluded property is not specified in the order it must be described in the order in general terms.”
From this, I highlight the following relevant points:
i) The power to grant exclusions is discretionary. There is no right to exclusions. Like any discretion, however, this power will be exercised in accordance with principle.
ii) It is expressly envisaged that the power may be exercised to enable any person “to meet their reasonable living expenses” and there is express contemplation, also, of exclusions to enable any person “to carry on any trade, business, profession or occupation”.
iii) It is expressly envisaged that the power may be exercised to cover the person's legal expenses. But the provision for this — Article 141G(3) – refers only to legal expenses “in respect of proceedings under this Part” which, for the purposes of this case, is legal expenses in respect of proceedings about the Prohibition Order itself. There are no other proceedings under Part 4A of the 2005 Statutory Instrument in this case.
iv) Article 141G(4A) makes it mandatory (“must”) that any exclusion for legal expenses in connection with Part 4A is strictly regulated. The legal expenses in question must be “limited to reasonable legal expenses” and they must be legal expenses that the person “has reasonably incurred or reasonably incurs”. They must be subject to a cap (“specifies the total amount that may be released for legal expenses in pursuance of this exclusion”).
v) There is no provision for other legal expenses. That is not to say that other...
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