Dalston Projects Limited & Ors v Secretary of State for Transport
[2024] EWCA Civ 172
Dalston Projects Limited & Ors v The Secretary of State for Transport
21 July 2023
[2023] EWHC 1885 (Admin)
High Court
The government seized a rich Russian's fancy boat because of the war in Ukraine. Even though the boat owner wasn't directly involved in the war, the court said it was okay because it was part of a bigger plan to put pressure on Russia.
Key Facts
- •The case concerns the lawfulness of the Secretary of State's decision to detain the MY Phi, a luxury yacht beneficially owned by Sergei Naumenko, a Russian businessman.
- •The detention was ordered under the Russia (Sanctions) (EU Exit) Regulations 2019.
- •Claimants argued improper purpose and disproportionate interference with property rights under the European Convention on Human Rights.
- •Naumenko was not designated under Part 2 of the Regulations but was considered 'connected with Russia'.
- •The Secretary of State's decisions to detain and continue detaining the yacht were challenged.
- •The Secretary of State’s rationale included disrupting Russian economic interests and sending a signal of condemnation.
- •The court considered the proportionality of the detention in light of Naumenko's wealth and the UK's foreign policy objectives.
Legal Principles
Judicial review principles apply to decisions under the Sanctions and Anti-Money Laundering Act 2018.
Sanctions and Anti-Money Laundering Act 2018, section 38(4)
Improper purpose test (Padfield principle).
Padfield v Minister of Agriculture, Fisheries and Food [1968] AC 99
Proportionality test under Article 1 of the First Protocol of the European Convention on Human Rights (A1P1).
Article 1 of the First Protocol of the European Convention on Human Rights
Rationality and the Tameside duty to seek relevant information.
Secretary of State for Education and Science v Tameside Metropolitan Borough Council [1977] AC 1014
Margin of appreciation afforded to the executive in foreign policy matters.
R (Al Rawi) v Secretary of State for Foreign and Commonwealth Affairs [2006] EWCA Civ 1279; R (Lord Carlile of Berriew) v Secretary of State for the Home Department [2014] UKSC 60
Conversion requires assumption of ownership or dominion.
Club Cruise Entertainment & Travelling Services Europe BV v Department for Transport (The Van Gogh) [2008] EWHC 2794 (Comm)
Outcomes
Claim dismissed.
The court found that the Secretary of State did not act for an improper purpose and that the detention was proportionate. The Secretary of State's actions were within the broad margin of discretion afforded to the executive in foreign policy matters. The court found a rational connection between the detention and the aim of pressuring the Russian regime, even though the impact on the specific case was uncertain.
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