High Court Upholds Property Freezing Order in National Crime Agency Case: Key Legal Principles and Outcomes Explained

Citation: [2024] EWHC 501 (Admin)
Judgment on

Introduction

The High Court of Justice in the case of National Crime Agency v Javanshir Feyziyev & Ors has deliberated on several pivotal legal principles centering around the granting and continuation of a Property Freezing Order (PFO). The court’s scrutiny was directed towards the adequacy of the evidence for the alleged recoverable property, the assessment of the risk of dissipation of assets, and the obligations associated with a without notice application, chiefly the duty of full and frank disclosure and fair presentation.

Key Facts

In the underlying case, the National Crime Agency (NCA) accused the Respondents of obtaining a property portfolio via funds acquired through unlawful conduct, namely the “Azerbaijani Laundromat” operation. The NCA secured a PFO against the Respondents’ property estimated at £50 million, and the Respondents challenged this PFO. The First Respondent is a member of Azerbaijan’s National Assembly, and both respondents asserted their wealth accumulation was legitimate. The proceedings revolved around whether the PFO granted without notice should be discharged based on the arguments of lack of risk of dissipation and alleged procedural failures by the NCA.

The court’s analysis hinged upon the interpretation and application of Part 5 of the Proceeds of Crime Act 2002 (POCA) concerning the civil recovery of proceeds of unlawful conduct. The judgment elucidates upon:

  1. Property Freezing Order (POCA 2002s245A): The court considered the statutory conditions under which a PFO can be made, focusing on whether there is a ‘good arguable case’ that the property in question is or includes ‘recoverable property’ obtained through unlawful conduct.

  2. Risk of Dissipation: The court referred to established case law, including Nuttall v NCA and Lakatamia Shipping Co Ltd v Morimoto, determining that the risk of unjustified dissipation of assets, specifically the possibility of the Respondents putting the property out of reach of the NCA, justified the granting of a PFO. The court considered the risk as ‘real’, and established by ‘solid evidence’.

  3. Full and Frank Disclosure and Fair Presentation (Brink’s Mat Ltd v Elcombe): The judgment revisited principles pertaining to without notice applications, emphasizing the applicant’s duty to disclose material facts and present the case fairly.

  4. Legal Framework Applicability: References to external cases like SOCA v Namli clarified the methodology for relying on inferences and the pattern of handling money to establish a case of money laundering.

  5. Discharge Application (PD-CRP and NCA v Simkus): Addressing the guidelines for discharge, the court underscored that the discharge application’s hearing is not a review or an appeal of the original PFO decision.

Outcomes

Mr. Justice Poole concluded that the NCA had successfully established a ‘good arguable case’ that the properties in question were or included recoverable property. The alleged risk of dissipation was considered significant enough to warrant a PFO, based on the evidence of potential money laundering. The assertions and evidence presented by the Respondents did not suffice to overturn the established risk or the good arguable case of ill-gotten wealth.

Furthermore, Poole J dismissed the counts of procedural failings alleged by the Respondents against the NCA’s without notice application conduct. The court held that there was no substantial non-disclosure or unfair representation by the NCA that impacted the outcome of the without notice hearing, and thus, the original PFO was found to be appropriately granted and was ordered to continue.

Conclusion

The High Court upheld the principles pertaining to POCA, the granting of a PFO, and the standard required for both granting and continuing a PFO in such cases. The decision affirms the threshold for establishing a ‘good arguable case’ of recoverable property and the need for a ‘real risk’ of dissipation of assets to justify a PFO. Additionally, the decision underscores the obligations inherent in without notice applications, particularly the duty of full and frank disclosure by the applicant. This case reaffirms the discretion vested in the High Court to analyze the factual matrix meticulously before endorsing coercive orders like a PFO, balancing the rights of the subjects of the order against the public interest of preventing crime.