The second claimant was the beneficial owner of a superyacht which had been moored in London since the end of 2021. The first and third claimants were part of the corporate structure through which the yacht was owned. Following the Russian invasion of Ukraine in February 2022, the National Crime Agency and Border Force Maritime Intelligence Bureau investigated vessels with connections to Russia. On 28 March 2022, the Secretary of State exercised powers conferred by regulations 57C(1) and 57D(1)(a) of the Russia (Sanctions) (EU Exit) Regulations 2019 to detain the superyacht, on the ground that it was owned, controlled or operated by a person connected with Russia. The claimants issued proceedings under section 38(2) of the Sanctions and Anti-Money Laundering Act 2018, seeking an order setting aside the decision to detain, plus damages (i) under section 8 of the Human Rights Act 1998 for breach of the their rights under article 1 of the First Protocol to the Convention for the Protection of Human Rights and Fundamental Freedoms and (ii) in the tort of conversion. Such proceedings were governed by Section II of CPR Pt 79 meaning that, by rule 79.5, applications to set aside sanctions decisions were to be made under the Part 8 procedure, as modified by Part 79. By virtue of section 38(5) of the 2018 Act, if the court set aside the impugned decision it was empowered to make any order or give any relief that, in the absence of the section, could have been made or given in proceedings for judicial review. An issue question arose whether, at the directions hearing to be held pursuant to CPR r 79.7, the court ought to deal with whether the claimants were entitled in principle to damages (i) under the 1998 Act and (ii) in conversion, with the Secretary of State agreeing to the former but not the latter.
On the issue—
Held, the language of section 38(5) was clear that, if the court decided that a decision ought to be set aside, it might “make any such order, or give any such relief, as could in the absence of this section be made or given in proceedings for judicial review of the decision”. The orders which the court could make on judicial review included, by section 31(4) of the Senior Courts Act 1981, awards of damages “arising from any matter to which the application relates”, which could include damages for conversion in an appropriate case. It followed that, in a claim under section 38(2) of the Sanctions and Anti-Money Laundering Act 2018, the court might in principle award damages for conversion and there was no need to bring the conversion claim by a separate Part 7 claim. While the modified CPR Pt 8 procedure applicable under CPR Pt 79 was unlikely to be apt for determining substantial disputes of fact, that need not give rise to difficulty, as the same was true of the procedure for judicial review proceedings under CPR Part 54 in which, in all but the most straightforward cases, the general practice of the court was to decide the legality of the challenged decision first and then give directions for resolution of the ancillary damages or financial remedy claim. The same could be done in claims governed by Part 79, in respect of which rule 8.1(4) empowered the court at any stage to “order the claim to continue as if the claimant had not used the Part 8 procedure” and then to give any directions it considered appropriate and CPR Pt 30, which applied to claims under Part 79 just as it did to judicial review claims, enabled the claim to be transferred the County Court or another division of the High Court for the determination of the ancillary issues. Accordingly, at the directions hearing the court was to determine any pure issues of law relating to the claimants’ entitlement to damages both under the 1998 Act and in the tort of conversion. In so far as the claimants’ entitlement to damages under either of those heads depended on the resolution of issues of fact, the court would give such directions as were required thereafter (paras 5, 10–16).
Nigel Giffin KC and John Bethell (instructed by Jaffa & Co) for the claimants.
Jason Pobjoy and Emmeline Plews (instructed by Treasury Solicitor) for the Secretary of State.