Boris Mints & Ors v PJSC National Bank Trust & Anor
[2023] EWCA Civ 1132
PJSC National Bank Trust & Anor v Boris Mints & Ors
27 January 2023
[2023] EWHC 118 (Comm)
High Court
Imagine a lawsuit where one side is under sanctions. The other side argued the sanctions made the case impossible, wanting it stopped. The judge ruled the sanctions didn't *clearly* stop the case, so it can continue. The judge also clarified that the government agency handling sanctions can allow for payments related to legal costs and other expenses, so the case can proceed fairly.
Key Facts
- •The Claimants, PJSC National Bank Trust (NBT) and PJSC Bank Otkritie Financial Corporation, sued the Defendants for approximately US$850 million, alleging conspiracy to enter into uncommercial transactions.
- •Following the Russian invasion of Ukraine, the UK government imposed sanctions on Bank Otkritie and NBT.
- •The Defendants sought a stay of proceedings, arguing that the sanctions rendered the litigation unworkable due to the Claimants' inability to comply with adverse costs orders, security for costs, and damages on cross-undertakings.
- •The central issue was whether the UK sanctions regime prohibited the court from entering judgment in favour of a sanctioned claimant.
Legal Principles
Principle of Legality
Common Law
Statutory Interpretation
Common Law
Article 6 ECHR (Right to a Fair Trial)
European Convention on Human Rights
Presumption against Doubtful Penalisation
Common Law
Article 7 ECHR (No Punishment Without Law)
European Convention on Human Rights
Outcomes
Defendants' applications dismissed.
The court concluded that the UK sanctions regime did not clearly prohibit entering judgment in favour of a sanctioned claimant. The judge found insufficient clarity in the legislation to override the fundamental right of access to the courts. While the wording of the regulations is broad, it did not unequivocally bar the entry of judgment. The court also found that the Office of Financial Sanctions Implementation (OFSI) had the power to license the payment of adverse costs, security for costs, and damages on cross-undertakings.
Judgment can lawfully be entered for the sanctioned claimant.
The court interpreted the Sanctions and Anti-Money Laundering Act 2018 and related regulations, considering their history and purpose. It found no clear intent to prevent judgments against sanctioned persons. The court emphasized that any restriction on access to justice must be explicitly stated or necessarily implied.
OFSI can license the payment of adverse costs orders.
The court interpreted Schedule 5, paragraph 3, broadly to encompass the payment of adverse costs, concluding that it is licensable. The court rejected the argument that the provision only applies to payments to a designated person's own lawyers.
OFSI can license the provision of security for costs.
The court reasoned that licensing the payment of security for costs logically follows from the ability to license adverse costs orders.
OFSI can license payments under a cross-undertaking for damages.
Although not directly related to legal services, the court considered the payment of damages under a cross-undertaking to be an 'extraordinary expense' under Schedule 5, paragraph 5.
NBT is not controlled by Mr. Putin or Ms. Nabiullina.
The court considered the meaning of 'control' under Regulation 7(4), concluding that it did not extend to control solely through official position. This decision relied on statutory interpretation principles and a presumption against doubtful penalisation.