CL-2022-000456 - [2025] EWHC 1938 (Comm)

Following the UK’s departure from the EU, issues regarding the meaning and effect of any EU instrument remain questions of law to be determined without expert evidence: European Union (Withdrawal) Act 2018, Section 15(2) and Schedule 5, paragraph 3.

It has long been recognised that, when interpretating any EU instrument, the court must be less concerned with textual analysis, and must place more emphasis on the underlying purpose, than it would when interpreting an English statute: Customs and Excise Commissioners v ApS Samex [1983] 1 All ER 1042, at p.1056a (Bingham J); see further Re Olympus UK Ltd[2014] EWHC 1350 (Ch), at [47]-[49] (Hildyard J).

Of particular relevance in this regard is the decision of the House of Lords in Shanning International Ltd v Lloyds TSB Bank Plc[2001] UKHL 31, because it was also a sanctions case. Lord Bingham, Lord Steyn and Lord Hope all gave reasoned speeches; they all emphasized the need for a purposive approach, so as to give effect to the obvious intent of the Regulation in question: per Lord Bingham at [18]; per Lord Steyn at [23]-[24]; per Lord Hope at [33].

In the context of sanctions, it therefore must be borne in mind that they are a foreign policy tool intended to coerce a change in behaviour. As set out in the ‘Policy Background’ section of the Explanatory Notes to the UK Sanctions and Anti-Money Laundering Act 2018:

“Sanctions are an important foreign policy and national security tool. They are restrictive measures, which are designed to be temporary and can be used to coerce a change in behaviour, to constrain behaviour, or to communicate a clear political message to other countries or persons … The UK and its international partners have also imposed and implemented sanctions in situations where the UN has chosen not to act … Often this has involved close cooperation between the EU …”

It is unfortunate that this trial took place before the European Court of Justice has yet provided the preliminary rulings sought by the three requests from Italy, noted in Section XXVIII above. When given, those preliminary rulings are bound to shed great light on the issues that I have to decide. However, all the parties agreed that it is not practical for this court to wait for the European Court of Justice to complete its processes, because there is no certainty about when that might be.

Mr Handyside KC suggested that, in this situation, I should proceed in accordance with the approach to foreign law indicated in Suppipat v Narongdej [2023] EWHC 1988 (Comm), at [908], where Calver J considered the position in cases where the foreign law is proved by expert evidence:

“[908] The proper approach to expert evidence of foreign law has been helpfully summarised recently in see Deutsche Bank AG London v Comune di Busto Arsizio [2021] EWHC 2706 (Comm) at [104]-[108] (Cockerill J) and Banca Intesa Sanpaolo SpA v Comune di Venezia [2022] EWHC 2586 (Comm) at [120]-[127] (Foxton J). Extracting some of the key principles derived from those authorities, I bear in mind and apply throughout this judgment the following principles in particular:

a.

The Court is not entitled to construe a foreign code itself; it is the function of the expert witness to interpret its legal effect.

b.

The task for the English court is to evaluate the expert evidence of foreign law and to predict the likely decision of the highest court in the relevant foreign system of law, rather than imposing his/her personal views as to what the foreign law should be, or allowing the expert to press upon the English judge his personal views of what the foreign law might be.

c.

This Court may decide what conclusion a foreign court would reach on a developing area of law but it is not, however, seeking to make findings which go beyond the present state of foreign law and to anticipate a rational development of it.

d.

The more senior the court which gives the relevant court decision, or the greater the number of foreign court decisions to a particular effect, the more difficult it will be for the English court to conclude that, nonetheless, those decisions do not reflect the law of the relevant jurisdiction.

e.

If there is a clear decision of the highest foreign court on the issue of foreign law, other evidence will carry little weight against it. That is generally so even if the decisions are unworkable in commercial practice or their reasoning illogical or inconsistent. When it falls to an English court to ascertain the content of foreign law, that means the law with whatever imperfections, policy-orientated determinations and impracticalities it manifests.”

My task cannot be quite the same, because (as already noted) I interpret Regulation 269 as a question of law, not fact, and without expert evidence. However, Mr Handyside KC submitted that it nevertheless remains the case that I should seek to predict what the highest court in any relevant foreign jurisdiction would decide. Mr Fenwick KC did not challenge this, and I understood Mr Kitchener KC and Mr Maclean KC to agree with Mr Handyside KC.

I am assisted in this task by the supplementary EU materials identified in Section XXVII above. Such materials are published with the intention that they should be referred to and used. They all have some significance, but there is a distinction between materials such as the Best Practices document and materials such as the 2020 and 2021 Opinions (which responded to requests from NCAs on specific legal issues). This is especially clear from the 2020 Opinion, because one of the questions posed to the EU Commission by NCAs concerned the application of an earlier EU Best Practices document. As the 2020 Opinion explained in an introductory paragraph (under “Preliminary observations”):

“EU Best Practices are non-binding recommendations reflecting the common understanding by the Member States and the Commission of certain provisions of EU restrictive measures, which aim to promote uniform implementation. The Commission’s interpretative role is limited to provisions of EU law. Consequently, the Commission’s assessment will not concern the interpretation of the EU Best Practices, but the relevant provisions of the Regulation only.”

There can be no doubt that it is right to take account of an EU Commission opinion, and the Court of Appeal did so in Mints v PJSC National Bank Trust[2023] EWCA Civ 1132. However, even guidance documents must be considered:

There is one further point that I should emphasise, before I embark on the process of analysing Regulation 269. Article 2(1) relates to funds and economic resources that are “belonging to, owned, held or controlled” by a designated person. Furthermore, as I explain in Section XXXI below, the same concept is also highly relevant to Article 2(2). In submissions, the parties before me generally compressed this to “owned or controlled”. They did so, very sensibly, for brevity. I note that the EU Commission and the European Court of Justice have also sometimes used this phrase. So do I, in this judgment.

This is a familiar phrase to English lawyers which has been discussed in many English cases. It is vital, however, to remember two things: