R (on the application of KBR, Inc.) v Director of the Serious Fraud Office
| Jurisdiction | England & Wales |
| Neutral Citation | [2021] UKSC 2 |
| Year | 2021 |
| Court | Supreme Court |
2020 Oct 13; 2021 Feb 5
Company - Fraud - Investigation - Director of Serious Fraud Office having power to require production of documents for fraud investigation - Whether power having extraterritorial application in respect of foreign company -
During the course of a criminal investigation into a United Kingdom company involving suspected offences of bribery and corruption, the Director of the Serious Fraud Office issued a notice pursuant to section 2(3) of the Criminal Justice Act 1987F1 requiring the claimant, which was the United Kingdom company’s parent company and was incorporated in the United States of America, to produce documents held by it in the United States. The claimant had no registered office or fixed place of business in the United Kingdom and had never carried on business in the United Kingdom. It sought judicial review on the ground, inter alia, that the notice was ultra vires since section 2(3) did not operate extraterritorially. The Divisional Court of the Queen’s Bench Division dismissed the claim.
On the claimant’s appeal—
Held, allowing the appeal, that section 2(3) of the Criminal Justice Act 1987 included no express provision to rebut the presumption against extraterritorial effect and there was no clear indication either for or against extraterritorial effect in other provisions of the 1987 Act; that, further, the legislative history of the 1987 Act and subsequent Acts indicated that Parliament intended that evidence concerning the investigation of crime should be obtained from abroad by means of the system of international mutual legal assistance, critical features of which were safeguards and protections fundamental to the mutual respect and comity on which the system was founded; that it would be inconsistent with Parliament’s intention were there to be a parallel system for obtaining evidence from abroad under section 2 of the 1987 Act which could operate on the unilateral demand of the Serious Fraud Office, without any recourse to the mutual legal assistance safeguards, while leaving a person who, without reasonable excuse, had failed to comply with such a demand liable to criminal sanctions; and that, accordingly, the power under section 2(3) of the 1987 Act could not be used to require a foreign company with no presence in the United Kingdom to produce documents held outside the jurisdiction (post, paras 26, 28–30, 34, 39–40, 45, 51, 53–54, 56, 59, 65–66).
The following cases are referred to in the judgment of Lord Lloyd-Jones JSC:
Akkurate Ltd, In re
Arrows Ltd, In re (No 4) [
Bilta (UK) Ltd v Nazir (No 2)
Carna Meats (UK) Ltd, In re
Company (No 00359 of 1987), In re A [
Comr of Inland Revenue v Hang Seng Bank Ltd [
Cox v Ergo Versicherung AG
Gohil v Gohil
MF Global UK Ltd, In re (No 7)
Masri v Consolidated Contractors International (UK) Ltd (No 4)
Mid East Trading Ltd, In re [
Omni Trustees Ltd, In re (No 2)
Paramount Airways Ltd, In re [
R (Al-Skeini) v Secretary of State for Defence
R (Jimenez) v First-tier Tribunal (Tax Chamber)
R (Quintavalle) v Secretary of State for Health
Seagull Manufacturing Co Ltd, In re [
Serious Organised Crime Agency v Perry
The following additional case was cited in argument:
AWH Fund Ltd v ZCM Asset Holding Co (Bermuda) Ltd
APPEAL from the Divisional Court of the Queen’s Bench Division
By a claim form the claimant, KBR Inc, sought judicial review by way of (i) orders to quash both the decision of the defendant, the Director of the Serious Fraud Office, on 25 July 2017 to issue a notice, purportedly pursuant to section 2(3) of the Criminal Justice Act 1987, requiring the claimant to produce documents held by it outside the United Kingdom, and also the notice itself and/or (ii) appropriate declaratory relief in respect of the notice. The ground of challenge was, inter alia, that the notice was ultra vires section 2 of the 1987 Act because it requested material held outside the jurisdiction of the United Kingdom from a company incorporated in the United States of America. By order of Baker J made on 14 February 2018 the matter was listed to be heard as a “rolled-up” hearing at which the claim would be determined if permission to proceed were granted. At the hearing, on 17 April 2018, the Divisional Court of the Queen’s Bench Division (Gross LJ and Ouseley J) granted permission to proceed but by a judgment on 6 September 2018 [2018] EWHC 2368 (Admin); [
By its order dated 26 October 2018, the Divisional Court, having taken the view that the case was a “criminal cause or matter” for the purpose of any appeal, certified that its decision involved the following points of law of general public importance: (1) did section 2(3) of the Criminal Justice Act 1987 permit the Director of the Serious Fraud Office to require a person to produce information held outside England and Wales? (2) if so, did the Director of the Serious Fraud Office have power to do so by reference to the “sufficient connection test”? On 8 April 2019 the Supreme Court (Lord Kerr of Tonaghmore, Lord Briggs and Lord Sales JJSC) gave the claimant permission to appeal.
The facts are stated in the judgment of Lord Lloyd-Jones JSC, post, paras 1–12.
Lord Pannick QC, Richard Kovalevsky QC and Jamas Hodivala QC (instructed by
There is a presumption that a statute does not have the extraterritorial effect of requiring a foreign company to produce documents held outside the jurisdiction, not least because such a requirement would be a breach of international comity: see R (Al-Skeini) v Secretary of State for Defence [
Although the question whether a statute has extraterritorial effect depends on the construction of the specific statute having regard to its context and purpose, the finding by the Divisional Court that section 2(3) of the 1987 Act has extraterritorial effect in the circumstances of the instant case conflicts with the decision in Serious Organised Crime Agency v Perry [
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