Court: Court of Appeal (Civil Division)
Judgment Date: 6 October 2023
Where Reported: [2023] EWCA Civ 1132; [2023] 10 WLUK 35
Legal Issues in Mints v PJSC National Bank Trust
The core legal issue in Mints v PJSC National Bank Trust focused on the applicability and interpretation of the UK sanctions regime, specifically the Sanctions and Anti-Money Laundering Act 2018 (SAMLA) and the Russia (Sanctions) (EU Exit) Regulations 2019, in the context of litigation.
The key questions in Mints v PJSC National Bank Trust include whether a judgment can lawfully be entered for a designated person, the extent to which the Office of Financial Sanctions Implementation (OFSI) can license certain financial activities related to legal proceedings involving a designated person, and the interpretation of “control” under the sanctions regulations.
Material Facts in Mints v PJSC National Bank Trust
This case emerged from the Russian invasion of Ukraine in 2022, focusing on the UK’s sanctions regime’s impact on ongoing Commercial Court litigation initiated in 2019.
The claimant banks sought recovery of approximately $850 million, alleging conspiracy by the defendants to engage in uncommercial transactions detrimental to the banks.
The complexity of the litigation increased significantly with the imposition of sanctions following the invasion, particularly given the designation of certain entities and individuals, including implications for the claimant PJSC National Bank Trust due to its close connection to the Russian government.
Judgment in Mints v PJSC National Bank Trust
The Court of Appeal upheld the High Court’s decision, finding in favour of the claimants/respondents.
It concluded that the UK sanctions regime did not prevent the entry of judgment for a designated person if the court established a valid cause of action.
Furthermore, the court determined that OFSI could license the payment of legal costs and other related financial transactions under the sanctions regime, providing a nuanced interpretation of what constitutes “control” under the regulations.
The Reason for the Decision in Mints v PJSC National Bank Trust
In Mints v PJSC National Bank Trust, the court’s detailed reasoning underscores the intricate balance between the strictures imposed by sanctions law and the foundational principles of justice and access to legal recourse.
The judgment meticulously navigates the legislative landscape defined by the Sanctions and Anti-Money Laundering Act 2018 (SAMLA) and the Russia (Sanctions) (EU Exit) Regulations 2019, highlighting the judiciary’s critical role in interpreting laws in a manner that aligns with both national security interests and individual rights.
The court emphasised the necessity of explicit legislative intent to restrict fundamental rights, particularly the right of access to the courts.
This principle is paramount in ensuring that sanctions, while serving their purpose of national and international security, do not unduly impede the fair administration of justice.
The decision thus reflects a nuanced understanding of the law, recognising that the imposition of sanctions, though essential for broader political and economic reasons, must be carefully balanced against the rights of individuals to seek redress and enforce legal claims through the judicial system.
Moreover, the reasoning illustrates the court’s awareness of the practical challenges posed by sanctions on legal proceedings.
It acknowledges the potential complexities for parties involved in litigation, particularly those designated under sanctions regimes, and the implications for their ability to participate in legal processes.
By allowing for the possibility of licensing by the Office of Financial Sanctions Implementation (OFSI) for the payment of legal costs and other related transactions, the court demonstrates a pragmatic approach to ensuring that the legal system remains accessible and functional, even in the face of restrictive sanctions.
This approach also serves to highlight the judiciary’s vital role in interpreting sanctions laws in a way that respects and upholds fundamental legal principles.
The decision is a testament to the judiciary’s commitment to maintaining the delicate balance between enforcing necessary sanctions and safeguarding the core values of justice and access to legal mechanisms.
In doing so, the court sets a precedent for future cases, ensuring that the application of sanctions laws does not unjustly prevent individuals and entities from pursuing legitimate legal claims and defences.
Read case: Whitely v Chappell (1868)
Legal Principles in Mints v PJSC National Bank Trust
Mints v PJSC National Bank Trust reaffirms the principles of statutory interpretation, emphasising the necessity for clear and unambiguous legislative language to restrict fundamental rights.
It illustrates the judiciary’s cautious approach toward interpreting sanctions regulations, ensuring that such interpretations do not inadvertently curtail access to the legal system or undermine the rule of law.
The judgment also contributes to the understanding of “control” within the sanctions framework, expanding the legal discourse on how entities related to designated persons are treated under UK law.
