Summary
The court dismissed two appeals involving decisions made by Government ministers under the Russia (Sanctions) (EU Exit) Regulations 2019. This judgment clarified the principles for first-instance courts when assessing such decisions for proportionality under the Human Rights Act 1998, as well as the applicable standards for appellate courts reviewing lower court determinations in these contexts.
Facts
In these conjoined appeals, the appellants challenged decisions made under the Russia (Sanctions) (EU Exit) Regulations 2019, which were enacted pursuant to the Sanctions and Anti-Money Laundering Act 2018. The first appeal centered on the unsuccessful challenge to the detention of a superyacht under Regulation 57D following Russia's invasion of Ukraine.
The first and third appellants were part of the corporate structure that owned the yacht, while the second appellant was its beneficial owner. The second appeal involved a challenge to the Secretary of State's decision under Regulation 5 to designate an individual and freeze his assets due to his association with a prominent Russian businessman.
Legal Principles
- Role of the First-Instance Court:</br></br>
- The court emphasized that the compatibility of an act with ECHR rights is a substantive question. The first-instance court's responsibility is not merely to review the procedural aspects of a public authority’s decision but to assess the substance of that decision directly, as seen in DPP v Ziegler [2021] UKSC 23 and Belfast City Council v Miss Behavin' Ltd [2007] UKHL 19.
- The executive is granted an "especially broad margin of discretion," and the court’s function is to ensure compliance with the principle of proportionality without applying a standard of rationality. Respect for the views of the executive and legislature remains essential, following Bank Mellat v HM Treasury [2013] UKSC 39.
- Role of the Appellate Court:</br></br>
- The principles governing appellate court reviews were articulated, notably in the context of the latest authoritative statement by Lord Reed in Abortion Services (Safe Access Zones: Northern Ireland) Bill, Re [2022] UKSC 32.
- The appellate court cannot interfere with the first-instance court's proportionality assessment, which is a factual question, except where the lower court has misdirected itself in law or reached an unreasonable conclusion based on the evidence (Ziegler and Edwards (Inspector of Taxes) v Bairstow [1956] A.C. 14 followed).
- Three categories of cases were identified, with the current appeals falling into the third category where the appellate court considers whether the first-instance court's proportionality assessment was "wrong." This term encompasses a range of interpretations, but appellate courts cannot impose their own assessment of proportionality.
Findings
- First Appeal:</br></br>
- The court assessed whether the decisions regarding the detention of the yacht were lawful and proportionate, particularly concerning the appellants' right to peaceful enjoyment of their possessions under ECHR Protocol 1, Article 1. The judge correctly concluded that the decisions were made for a legitimate purpose, referencing Padfield v Minister of Agriculture, Fisheries and Food [1968] A.C. 997, and did not misdirect himself regarding the proportionality assessment.
- Second Appeal:</br></br>
- The appellant challenged his designation on the grounds of disproportionate interference with his rights under Article 8 and Protocol 1, Article 1. The court found that the judge had erred by creating an inappropriate dichotomy between the Secretary of State and the reviewing court. The judge had confused the requirement of deference to the Secretary of State's views with the court’s role in forming its own judgment. However, the current court was well-positioned to reassess the proportionality rather than remitting the matter. The judge's conclusions regarding the appellant's association with the businessman and the rational connection of the designation to the regulatory objectives were upheld, indicating a fair balance between the appellant's rights and the community's interests.
Conclusion
The court's analysis in this case clarifies the legal framework governing sanctions under UK law, particularly regarding the roles of first-instance and appellate courts. The emphasis on substantive assessments of proportionality highlights the importance of judicial review in the context of national security and international relations while respecting the broad discretion afforded to the executive. The dismissal of both appeals reinforces the validity of Government decisions made under the sanctions regime, aligning them with established human rights standards.
