2010 International Law Update, Volume 16, Number 1 (January)

2010 International Law Update, Volume 16, Number 1 (January)

Legal Analyses published by Mike Meier, Attorney at Law. Copyright 2017 Mike Meier. www.internationallawinfo.com. 

CHILD CUSTODY (INTERNATIONAL)

In multi‑national child custody dispute, Third Circuit applies Younger abstention to dismiss appeal from registration and enforcement of French court’s custody orders by Delaware Family Court

The parents of the child (VL) are disputing each other’s rights to custody. The father, Emmanuel Lazaridis (EL), filed a pro se complaint in Delaware federal court, alleging constitutional and statutory violations. The child’s mother is Lavina Tina Wehmer (LW).

In 2004, a French court had granted the parents joint custody, but ordered that VL’s primary residence was to be with LW. LW sought to register the French custody order in Delaware Family Court (DFC) pursuant to the Delaware version of the Uniform Child Custody Jurisdiction and Enforcement Act (UCCJEA), 13 Del. C. Ann. § 1934(a). EL challenged the registration. At a DFC hearing, EL argued that Delaware lacked jurisdiction either to register or to enforce the French custody order. The DFC later granted the registration.

A French court issued another custody order during August 2005 that awarded LW exclusive parental authority over VL. Two months later, LW asked the DFC to register the French court order. EL unsuccessfully objected.

About a year later, EL filed the present pro se complaint which alleged constitutional and statutory violations. Meanwhile, custody proceedings were ongoing. In January 2007, a Greek court issued a custody order in January 2007. It granted EL temporary custody of VL; this led the DFC to vacate its registration of the 2005 French order.

In August 2007, EL moved to vacate the registration of the 2004 French order, but the DFC denied it on res judicata grounds. Later on, the federal court dismissed EL’s complaint sua sponte, and he filed this appeal. The U.S. Court of Appeals for the Third Circuit affirms.

Part of EL’s appeal challenges the registration and enforcement of the 2004 and 2005 French custody orders. The Court now concludes that the abstention rationale of Younger v. Harris, 401 U.S. 37 (1971) requires dismissal of these challenges.

The Court explains. “In certain circumstances, district courts must abstain from exercising jurisdiction over a particular claim where resolution of that claim in federal court would offend principles of comity by interfering with an ongoing state proceeding. ... Such abstention is appropriate, however, only when the following three requirements are satisfied: (1) there are ongoing state judicial proceedings; (2) the state proceedings implicate important state interests; and (3) the state proceedings afford an adequate opportunity to raise the federal claims. ... EL’s first claim satisfies each of these requirements.”

“The state court actions regarding the registration of the French orders were pending when EL filed his federal court complaint on December 27, 2006, satisfying the test’s first prong. ... The second prong of the test asks whether the state proceedings implicate important state interests. ...[W]hen the other elements of the Younger test are met, neither injunctive nor declaratory relief will be available ‘in cases in which the federal relief would render the state court’s orders or judgments nugatory.’ ...”

“‘This is a particularly appropriate admonition in the field of domestic relations, over which federal courts have no general jurisdiction ... and in which the state courts have a special expertise and experience.’ ... EL requests [1] a declaration that the UCCJEA and the Uniform Interstate Family and Support Act [UIFSA] are unconstitutional, [2] an injunction preventing Delaware from registering or enforcing current or future custody orders registered pursuant to Delaware law, and [3] an injunction precluding private parties from registering or enforcing the French custody orders. Such relief would nullify the Delaware court’s judgments regarding the appropriateness of registering the French custody orders. ...”

“EL essentially wants wholesale federal intervention into a state dispute. He seeks the vacation of existing orders and a federal injunction directing future litigation. ... This is precisely the type of case suited to Younger abstention, as the state proceeding implicates the important state interest of preserving the state’s judicial system.” [670‑671]

Citation: Lazaridis v. Wehmer, 591 F.3d 666 (3rd Cir. 2010).

FOREIGN POLICY

Second Circuit affirms dismissal of WWII claims against insurance company based on Garamendi case because foreign policy of U.S. that favors resolution of such claims within International Commission on Holocaust Era Insurance Claims (ICHEIC) pre‑empts conflicting state‑law claims

In this consolidated appeal, Dr. Thomas Weiss, Erna Birnbaum Gottesman, Martha Birnbaum Younger, and Edward David (Plaintiffs) are the beneficiary descendants of insurance policies that their ancestors bought in the years before the Holocaust. The insurer was Assicurazioni Generali, S.p.A. (AG), an Italian insurance company founded by Jewish merchants. Plaintiffs charge that AG unlawfully refused to pay insurance benefits to Plaintiffs.

The District Court for the Southern District of New York dismissed Plaintiffs’ claims based on the authority of American Insurance Association v. Garamendi, 539 U.S. 396 (2003) (California’s Holocaust Victim Insurance Relief Act (HVIRA), see 20003 International Law Update 93) interferes with President’s ability to conduct nation’s foreign policy and is therefore preempted). In this type of case, that policy specifically approves the resolution of such claims only by ICHEIC. This is an international claims resolution organization set up by private European insurance companies. [See www.icheic.org.]

On Plaintiffs’ appeal, the U.S. Court of Appeals for the Second Circuit agrees that Garamendi controls and affirms. The Court sets forth its reasoning. “In Garamendi, the Supreme Court explained that state law ‘must give way’ to the foreign policy of the U.S., as set by the President, where there is ‘evidence of clear conflict between the policies adopted by the two.’ Id ... at 420‑21.”

“Based on the amicus brief of the U.S. [government] and statements made during negotiations among the U.S., Germany, Austria, and France regarding Holocaust‑era insurance claims, the Court concluded that the ‘consistent Presidential foreign policy has been to encourage European governments and companies to volunteer settlement funds in preference to litigation or coercive sanctions,’ and, in the insurance context specifically, ‘to encourage European insurers to work with the ICHEIC to develop acceptable claim procedures.’ Id. at 421.”

“[At issue in Garamendi,] was California’s Holocaust Victim Insurance Relief Act of 1999 (HVIRA)], ‘by making exclusion from a large sector of the American insurance market the automatic sanction for noncompliance with the State’s own policies on disclosure,’ which required broader disclosure than the ICHEIC, ‘[HVIRA] undercut[] the President’s diplomatic discretion and the choice he... made in exercising it.’ Id. at 423‑24.”

“Because enforcement of the California law would mean that the President could not wield the full ‘`coercive power of the national economy’ as a tool of diplomacy in negotiating a process for settling claims, the Court concluded that the HVIRA ‘compromise[d] the very capacity of the President to speak for the Nation with one voice in dealing with other governments to resolve claims against European companies arising out of World War II.’ Id. at 424 ...”

“Garamendi [of course] involved only disclosure requirements. The HVIRA’s disclosure requirement, although not directly in conflict with the government’s policy to encourage use of the ICHEIC to resolve Holocaust‑era insurance claims, nonetheless undermined the Government’s objective by ‘thwarting the Government’s policy of repose for companies that pay through the ICHEIC’ and by undercutting privacy protections of European allies. Id. at 425. The Court therefore found it sufficiently disruptive to justify preemption.”

“The cases before us, in contrast, essentially seek enforcement of the Plaintiffs’ claimed contract rights against AG under state law. Unlike the HVIRA’s disclosure requirement, whose effect on foreign policy is only oblique, such law suits are directly in conflict with the Government’s policy that claims should be resolved exclusively through the ICHEIC. If, as the Supreme Court held in Garamendi, a state disclosure requirement conflicts sufficiently to be preempted by the national foreign policy of channeling Holocaust‑era insurance claims through the ICHEIC, then, a fortiori, a state law suit to enforce a Holocaust‑era insurance claim is preempted by that policy, as well.”

“... [W]e solicited the advice of the Secretary of State (in two administrations) on the [relevant] foreign policy of the United States. The Government has twice made perfectly clear that ‘[i]t has been, and continues to be, the foreign policy of the U.S. that the [ICHEIC] should be regarded as the exclusive forum and remedy for claims within its purview,’ and that this policy applies to claims against AG. ...”

“Plaintiffs next argue that strong state interests underlie the laws that form the basis for their suit, and therefore, unlike in Garamendi, the balance between state and federal policy tips in their favor. ... [The Court disagrees]. In this case, the conflict between the federal policy that the ICHEIC should be the exclusive forum for resolving Holocaust‑era insurance claims and Plaintiffs’ attempt to adjudicate their Holocaust‑era insurance claims under state law is even more clear than the conflict in Garamendi, which involved only a disclosure requirement, and not a state law suit to enforce the insurance claim. The state law must yield to the federal policy, regardless of the importance of the interests behind the state law.”

“Finally, Plaintiffs point out that the ICHEIC’s ... deadline for accepting claims has passed, so that dismissal of their claims will deny them the opportunity to pursue those claims in any forum. This argument is premised on a misunderstanding of the Government’s policy. As the Government made clear in its letters to the court, ‘[i]t was never the foreign policy of the U.S. that claims should merely be held in abeyance pending conclusion of the ICHEIC process.’ See Swingle Letter, at 8. The policy is rather that the ICHEIC ‘should be regarded as the exclusive forum and remedy for claims within its purview.’ ... If the ICHEIC door has closed on Plaintiffs, it is because they chose to allow it to close.” [Slip op. 8‑12]

Citation: In re Assicurazioni Generali, S.p.A., Weiss v. Assicurazioni Generali, S.p.A., 05‑5612‑cv (2d Cir. January 15, 2010).

FORUM NON CONVENIENS

In dismissal of defamation lawsuit for alleged acts that took place in Iraq, Fourth Circuit [1] remands holding that Defendant’s motion to dismiss was premature since Plaintiff was about to amend his complaint and [2] provides guidance as to forum non conveniens issues that will arise again

Richard Galustian (Plaintiff) is a British citizen residing in the United Arab Emirates (UAE). He owns ISI International, Ltd. (ISI), a commercial security business in the UAE and in Dubai. Lawrence Peter (Defendant) is a U.S. citizen residing in Virginia Beach, Virginia. He directs the Private Security Company Association of Iraq (PSCAI). It is supposed to keep member companies informed about industry developments and to set standards for similar companies doing business in Iraq.

Plaintiff sued Defendant for defamation in a Virginia federal court. His complaint alleges that Defendant defamed him by sending an e‑mail to PSCAI members, attaching an Iraqi warrant for Plaintiff’s arrest. The warrant failed to specify the name of the offense or to include any citation to an applicable article of Iraqi law. Plaintiff further alleged that someone had forged the signature of the official issuing the warrant. Defendant responded that he had forwarded the warrant to PSCAI members to let them know that an Iraqi court was asserting jurisdiction over a private U.S. contractor.

Defendant moved to dismiss (1) on forum non conveniens (FNC) grounds and (2) for failure to state a claim under either Virginia or Iraqi law. Attached to the motion was an affidavit by former Iraqi lawyer George Hermes Hanna; it alleged that Articles 204 and 205 of the Iraqi Civil Code provides for a defamation claim.

The District Court dismissed the lawsuit conditionally based on FNC doctrine. The conditions were that Defendant (1) waive all immunity he might have by virtue of Coalition Provisional Authority Order 17 (providing immunity to international consultants and contractors) and (2) waive any applicable statute of limitations defense. The District Court found that, under those conditions, Iraq was an available and adequate forum.

On Plaintiff’s appeal, the Fourth Circuit reverses in part and remands for further proceedings. The Court points out that the dismissal of the case was premature in that Plaintiff was about to amend his complaint to add another Defendant. Nevertheless, the Court seems to favor the applicability of FNC.

“We ... express no opinion as to the substance of the [FNC] issue, but do offer some guidance to the district court upon remand. We review the decision of the district court on [FNC grounds] for abuse of discretion. Piper Aircraft Co. v. Reyno, 454 U.S. 235, 257 ... (1981) ...”

“When moving to dismiss an action on FNC grounds, the defendant has the burden of proof to show the existence of an alternate, adequate, and available forum. ... ‘Ordinarily, [the availability] requirement will be satisfied when the defendant is ‘amenable to process’ in the [foreign] jurisdiction.’ ... However, in certain cases, the alternate forum is unavailable ‘where the remedy offered by the other forum is clearly unsatisfactory’ or when the other forum does not provide for a cause of action for the plaintiff’s alleged injury. ...”

“As to the second factor, a forum is considered adequate when ‘(1) all parties can come within that forum’s jurisdiction, and (2) the parties will not be deprived of all remedies or treated unfairly, even though they may not enjoy all the same benefits as they might receive in an American court.’ ...”

“To show that Iraq was an available alternative forum, Defendant introduced an affidavit from [Mr.] Hanna, an reputed expert on Iraqi law. While this Court does not require an exhaustive comparative law analysis from the parties or the [lower] court, Mr. Hanna’s affidavits fell short of showing the availability of a defamation remedy, especially in the case where serious questions arise as to whether a British citizen [like Plaintiff] can bring suit in an Iraqi court. In this Court’s review of the articles of the Iraqi Civil Code cited by Mr. Hanna, it does not appear certain that defamation as such is contemplated by the Civil Code as a cause of action. Rather, the sections cited by Mr. Hanna appear to provide for damages for reputational harms occurring as part of another injury.”

“This Court does not question Mr. Hanna’s credentials as an expert on the law of Iraq, but the showing in his affidavit is not sufficiently clear to carry the Defendant’s burden to show that the alternative forum offers a remedy for the Plaintiff’s claim. It is certainly possible, however, for Defendant to submit a supplemented affidavit should the issue of FNC arise again.”

“Beyond the question of availability of the forum, the district court’s consideration of the public and private factors enumerated in Gulf Oil Corp. v. Gilbert, [330 U.S. 501, 511‑12 (1947) (criteria for transfer from one federal district to another within U.S.)] should have given closer scrutiny to the location of the Defendant’s residence. ... It is true that, in cases where the plaintiff has not chosen to bring the case in his home country, the court need give little deference to the plaintiff’s choice of forum. ...”

“This lack of deference is muted, however, when the defendant is a resident and citizen of the forum he seeks to have declared inconvenient for litigation, as Defendant is here. While we do not suggest that Defendant’s place of residence is dispositive, the district court should have examined this fact more closely in its FNC analysis when ‘the central focus of the FNC inquiry is convenience. See Piper Aircraft, supra at 249 ...” [731‑2].

Citation: Galustian v. Peter, No. 09‑1069 (4th Cir. January 15, 2010).

JURISDICTION (PERSONAL)

Eleventh Circuit declines to enforce default judgment by Georgia federal court against Kuwaiti company where Defendant company lacks minimum contacts with Georgia

The parents of Lieutenant Colonel Dominic Baragona, who died in Iraq in a traffic collision with a truck are the Plaintiffs here. Operating the truck was Kuwait & Gulf Link Transport Company (KGL). It is incorporated and has its principal place of business in Kuwait.

Plaintiffs filed a tort action in a Georgia federal court. Both Kuwait and the U.S. are parties to the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters. [20 U.S.T. 361; T.I.A.S. 6638; 658 U.S.T.S. 163; in force Feb. 10, 1969] Pursuant to this Convention, Plaintiffs served KGL through the Kuwaiti Ministry of Justice, but KGL refused to accept delivery of the complaint and summons. Nevertheless, KGL did hire U.S. counsel to monitor the U.S. proceedings.

Plaintiffs eventually obtained a default judgment for $4.9 million. At that point, KGL did appear and moved to set aside the judgment under Fed. R. Civ. P. 60(b)(4). After a hearing, the district court ruled that KGL lacked those minimum contacts with Georgia enough to support personal jurisdiction over it. The district court vacated the default judgment against the Defendants. Plaintiffs appealed, but the Eleventh Circuit affirms.

“The Plaintiffs first argue that KGL waived its personal jurisdiction defense through its ‘lawyerly gamesmanship’ in ignoring valid service, retaining counsel in the U.S., monitoring court proceedings, and then filing a motion to vacate the judgment after a default judgment was rendered against it. A defendant normally only waives a personal jurisdiction defense if he or she has entered an appearance or was involved in overt wrongdoing to deceive the court and avoid service of process. ...”

“In this case, however, none of these circumstances are present and ‘[a] defendant is always free to ignore the judicial proceedings, risk a default judgment, and then challenge that judgment on jurisdictional grounds in a collateral proceeding.’ ... This is particularly true in this case where the court must determine whether the constitutional requirements of minimum contacts are satisfied. See Foster v. Arletty 3 Sarl, 278 F.3d 409, 413 (4th Cir. 2002) (holding that the defendant, a French company, did not waive its personal jurisdiction defense merely because it was served with process and had notice of district court proceedings).”

“The Plaintiffs point to cases they characterize as holding that a defendant’s willful ignorance of district court proceedings waives a later challenge to personal jurisdiction. ¼ These cases, however, all involve the improper service of process.”

“As we explained in Prewitt Enterprises, Inc. v. Organization of Petroleum Exporting Countries, 353 F.3d 916, 925 n.15 (11th Cir. 2003): ‘The concept of personal jurisdiction comprises two distinct components: amenability to jurisdiction and service of process. Amenability to jurisdiction means that a defendant is within the substantive reach of a forum’s jurisdiction under applicable law. Service of process is simply the physical means by which that jurisdiction is asserted.’.”

“These cases, therefore, state that a defendant that ignores faulty service of process might be found to have waived one component of personal jurisdiction: the defense of improper service of process. They do not, however, hold that a defendant waives the personal jurisdiction defense when it receives notice but does not meet the constitutional test of minimum contacts making it amenable to jurisdiction.” [Slip op. 3‑5]

Citation: Baragona v. Kuwait Gulf Link Transport Co., No 09‑127700 (11th Cir. January 21, 2010).

TORTURE

English Court of Appeal dismisses appeal by Foreign Secretary to keep secret certain limited intelligence information about alleged torture of British resident by United States agents

The issue in the following case is whether the UK Court should disclose certain information in a judgment that the U.S. Government has made available to the UK Government relating to a terrorism detainee. At issue is the alleged complicity of the British Security Service MI‑5 which is responsible for protecting the UK against threats to national security, [see https://www.mi5.gov.uk]) in the torture of Binyam Mohamed, a British resident.

Mohamed is an Ethiopian citizen living in the UK where he secured refugee status in 1994. In April 2002, persons unknown arrested him in Pakistan for suspected terrorist activities and held him at secret locations until May 2004. While in Pakistan, an unidentified MI‑5 officer allegedly questioned him. From May to September 2004, the U.S. had custody over him in Afghanistan and at Guantanamo Bay. During that detention, U.S. officers (and others acting on their behalf) interrogated him.

He allegedly confessed that he was involved with Al Qaida and was planning terrorist acts. Mohamed now claims that U.S. agents subjected him to torture and other inhuman and degrading treatment, such as mutilation of his genitals and prolonged sleep deprivation, which then forced him to make a phony confession. British agencies were allegedly aware of these events. Mohamed argues that some of the questions about his life in London must have come from British intelligence sources.

In August 2009, the High Court of Justice, Queen’s Bench Division held that (I) the Security Service had facilitated the Mohamed interrogations on behalf of the U.S.; (ii) Mohamed’s lawyers require certain confidential and secret documents for the case to be considered fairly; (iii) such information would not be made available by U.S. authorities in a timely manner; and (iv) under the principles of Norwich Pharmacal Co, The Customs and Excise Comrs [1974] AC 133, Mohamed was entitled to a number of confidential and secret documents, subject to the court’s discretion and government claims to immunity from production in the public interest.

In its judgment of February 2009, the Court ruled that the record should include seven short subparagraphs (“the redacted paragraphs”) in the public version of the judgment over objections by the Foreign Secretary that such publication would likely cause serious harm to the national security of the UK.

The Foreign Secretary appealed the decision, contending that it would impair the sharing of vital intelligence information between the U.S. and the UK. The Court of Appeal (Civil Division) dismisses the appeal. Though the government has redacted the following 7 paragraphs, their presence in the public record are at issue in this appeal:

“It was reported" (iv) “that a new series of interviews was conducted by the United States authorities prior to 17 May 2001 as part of a new strategy designed by an expert interviewer;”

(v) “that at some stage during that further interview process by the U.S. authorities, BM had been intentionally subjected to continuous sleep deprivation._The effects of the sleep deprivation were carefully observed;_

(vi) “that, combined with the sleep deprivation, threats and inducements were made to him._His fears of being removed from U.S. custody and ‘disappearing’ were played upon;”

(vii) “that the stress brought about by these deliberate tactics was increased by him being shackled in his interviews;_

(viii) “It was clear not only from the reports of the content of the interviews but also from the report that he was being kept under self‑harm observation, that the interviews were having a marked effect upon him and causing him significant mental stress and suffering;”

(ix) “We regret to have to conclude that the reports provided to the SyS [Security Service] made clear to anyone reading them that BM was being subjected to the treatment that we have described and the effect upon him of that intentional treatment;”

(x) “The treatment reported, if had been administered on behalf of the UK, would clearly have been in breach of the undertakings given by the UK in 1972._Although it is not necessary for us to categorise the treatment reported, it could readily be contended to be at the very least cruel, inhuman and degrading treatment by the U.S. authorities;”

The Court notes that these redacted paragraphs do not involve a breach of security, or disclose confidential information. Further, it is no secret that there is close intelligence cooperation between the UK and the U.S. The Foreign Secretary’s argument for redacting the paragraphs is that the “control principle” [here to mean: understanding on which intelligence is shared confidentially between the U.S. and the UK] must prevail. Otherwise the intelligence sharing arrangements between the USA and the UK will be reviewed, and the cooperation may become less “productive.” Thus, at the core of this controversy is the control principle itself, and its application in troubled times.

The Court then emphasizes the importance of the principle of “open justice”: “There is ... a distinct aspect of the principle which goes beyond proper scrutiny of the processes of the courts and the judiciary. The principle has a wider resonance, which reflects the distinctive contribution made by the open administration of justice to what President Roosevelt described in 1941 as the ‘¼ first freedom, freedom of speech and expression’. In litigation, particularly litigation between the executive and any of its manifestations and the citizen, the principle of open justice represents an element of democratic accountability, and the vigorous manifestation of the principle of freedom of expression. Ultimately it supports the Rule of Law itself. Where the court is satisfied that the executive has misconducted itself, or acted so as to facilitate misconduct by others, all these strands, democratic accountability, freedom of expression, and the rule of law are closely engaged.”

“... [T]he principle of open justice encompasses the entitlement of the media to impart and the public to receive information in accordance with Article 10 of the European Convention on Human Rights and Fundamental Principles (sic). Each element of the media must be free to decide for itself what to report. One element would report those matters which reflect its distinctive social or political stance, and a different section of the media will report on different matters, reflecting a different, distinctive position.”

“This may very well happen with this judgment, reflecting the diversity of the media, and symbolising its independence. In short, the public interest may support continuing redaction, or it may not. If it does not, each element of the media will decide for itself what, if anything, to publish. In the context of two further features of the evidence, I should add that the investigative role of the media exists independently of the principle of open justice, and that the right of the media to enlist the assistance of legislation like the Freedom of Information Act to acquire access to information is similarly distinct. Neither diminishes the principle of open justice.” [¶¶ 39‑40]

“ ... [P]ublication of the redacted paragraphs would not reveal information which would be of interest to a terrorist or criminal or provide any potential material of value to a terrorist or a criminal. The redacted paragraphs do not, for example, identify methods of surveillance currently unknown to potential terrorists, or reveal the methods employed by the security and intelligence services to penetrate terrorist groups. Indeed it seems right to emphasis that the publication of the redacted paragraphs would not and could not, of itself, do the slightest damage to the public interest.”

“Equally, ... it is public knowledge, and clear from the open judgments and the submissions made on behalf of the Foreign Secretary, that there is, and for many years has been, an intelligence sharing relationship between the UK and the USA. No one can doubt it. Certainly, no one can conceal it. Moreover, a close analysis of the redacted paragraphs in the context of all the open judgments would demonstrate that, in reality, they do not contain anything which cannot be read or inferred from the existing open judgments. For example, ¶ 87(iv) of the first open judgment is itself revealing about the detention of Mr. Mohamed and the involvement of our intelligence services with him. It records that the ‘details of the reports’ are set out in the redacted paragraphs. It is also clear from the open judgments that these reports were received by the intelligence services while Mr. Mohamed was detained in Pakistan, when he was being interviewed by US authorities.”

“Without going into this material in detail, it increasingly appears that the issue is the control principle rather than the confidentiality of any information within the redacted paragraphs themselves. In other words the appeal concerns an application for PII [‘public interest immunity,’ common law principle allowing a litigant not to disclose certain evidence to the other litigant ‑ The Editor], not for the purposes of protecting secret material, but to ensure that the control principle is upheld.”

“If it is not, the inevitable review would presumably reflect that the Foreign Secretary had done everything he lawfully could in the UK to prevent publication, as well as the considerations which led the court, exercising its independent jurisdiction, in large measure to uphold the confidentiality principle in the context of huge quantities of ‘secret’ evidence in the closed judgment, and only after the most remarkably patient analysis of all the relevant considerations, to reject his PII applications. Presumably, too, the review would take into account the potential disadvantages to the battle against terrorism and the security of both countries if the intelligence sharing arrangements were reduced, and address the relationships between allies in a common cause, and with a common understanding of the possibility that it remained open to a court, whether in the UK or the USA, to refuse the PII application.”

“There is no secret about the treatment to which Mr. Mohamed was subjected while in the control of the US authorities. We are no longer dealing with the allegations of torture and ill‑treatment: they have been established in the judgment of the court, publicly revealed by the judicial processes within the USA itself. And this serves to highlight that the redacted paragraphs represent part of the Divisional Court’s reasoning, directed not to wrongdoing by the USA authorities but involvement in that wrongdoing by our own intelligence services, and the successful argument by Mr. Mohamed that he was entitled to the relief he had sought against the Foreign Secretary.”

“In the context of intelligence sharing arrangements, the decision to disclose evidence critical of the USA authorities by a court in the USA does not reflect identical considerations to its possible disclosure by a court in the UK. Nevertheless, there is at least one common theme. The former represents the proper working of the judicial processes in the USA, and although the latter would constitute a breach of the confidentiality arrangements, the breach would be consequent on the proper working of the judicial processes in this country [...].”

“In my view, the arguments in favour of publication of the redacted paragraphs are compelling. Inevitably, if they contained genuinely secret material, the disclosure of which would of itself damage the national interest, my conclusion might be different. However dealing with this appeal as a matter of practical reality rather than abstract legal theory, unless the control principle is to be treated as if it were absolute, it is hard to conceive of a clearer case for its disapplication than a judgment in which its application would partially conceal the full reasons why the court concluded that those for whom the executive in this country is ultimately responsible were involved in, or facilitated, wrongdoing in the context of the abhorrent practice of torture. Such a case engages concepts of democratic accountability and, ultimately, the rule of law itself.” [¶¶ 52‑58]

Citation: The Queen on the application of Binyam Mohamed v. The Secretary of State for Foreign and Commonwealth Affairs [2010] EWCA Civ 65. The Press Release of the Foreign and Commonwealth Office of 10 February 2010 with Foreign Secretary David Miliband’s statements is at www.fco.gov.uk.

UN SECURITY COUNCIL RESOLUTIONS (DOMESTIC ENFORCEMENT OF)

Where four appellants suspected of links to terrorism had challenged Orders in Council under which UK Treasury had frozen their assets, United Kingdom Supreme Court unanimously quashed them as ultra vires but pursuant to three distinct lines of reasoning: (1) that relevant UN Security Council Resolutions against terrorism fell outside terms of 1946 United Nations Act; or (2) that said Orders violated individual rights protected by European Convention on Human Rights; or (3) that terms of freezing orders themselves exceeded powers granted by 1946 Act

Article 25 of the 1946 United Nations Charter (UNC) requires the United Kingdom, as a member of the UN to carry out resolutions of the Security Council (UNSC) in accordance with the Charter. It provides in part that: “The members of the United Nations agree to accept and carry out the decisions of the Security Council in accordance with the present Charter.” As a result, the UK promptly passed the United Nations Act of 1946 (UNA). Section 1 of the UNA authorized the issuance of Orders in Council (OIC) to make such provision as seemed “necessary or expedient” to enable the UK government to issue internal orders that would effectively carry out UNSC Resolutions.

In 2006, the UK Council – under the powers conferred by Section 1 of the 1946 UNA – issued the following OICs titled Terrorism (U. N. Measures) Order 2006 ¼ (TO) and the Al‑Qaida and Taliban (U. N. Measures) Order 2006 (AQTO) ¼ to give effect to SCRs, including R. 1373 (2001). The SCRs aimed to suppress and prevent the financing and preparation of terrorist acts. They broadly provided for the freezing of the financial assets and economic resources – save for basic expenses – of designated persons under the Orders.

Article 4(1)(2) of the TO empowered the Treasury to decide that an individual was a Treasury designate if it had reasonable grounds for suspecting that the individual “is or may be” a person who committed, tried to commit, took part in, or helped bring about the commission of, terrorist acts. Article 3(1)(b) of the AQTO provided, inter alia, that persons on a list compiled by the UNSC sanctions committee were designates.

Pursuant to Article 4 of the TO, the Treasury made such a direction with respect to each of the three Applicants in the first case [A, K, and M] and the Applicant in the second case [G]. The Treasury also informed G that it had also designated him under Article 3(1)(b) of the AQTO. This Treasury action froze the Applicants’ bank accounts and denied him and his family access to their assets – though they did obtain licences to go on receiving their social security benefits.

 Applicants A, K, M, and G applied to the High Court under Article 5(4) of the TO to set aside these directions while G also sought judicial review of the AQTO. Holding that each Order was ultra vires of Section 1 of the 1946 Act, the judge quashed them and their directions as unlawful. The Treasury appealed.

The Court of Appeal allowed the Treasury’s appeal in part. First, it held that the excision of the words “or may be” from the test of “reasonable suspicion” on which the Treasury had based its directions, preserved the validity of Article 4 of the TO. Secondly, it ruled that the challenged provisions of the AQTO were lawful, but that a person in G’s situation had the right to seek judicial review of his designation.

Following that decision, G claimed a right to judicial review of the basis on which the sanctions committee had listed him and, in the alternative, sought an order quashing the AQTO. The judge declared that the AQTO, as a whole, was ultra vires as it applied to the Claimant. But the judge declined to quash it. Instead, it granted a certificate to enable the Treasury to proceed directly to the UK Supreme Court.

On the several appeals, three separate Supreme Court opinions agreed on quashing the Orders but relied on three distinct lines of reasoning for holding that the instant OICs were ultra vires: (1) that the relevant SCRs do not fall within the scope of the 1946 UN Act; (2) that the freezing orders violated rights protected by the European Convention on Human Rights; or (3) that the terms of the freezing orders fell outside the powers granted by the 1946 Act. Due to the cumulative length of the several fascinating opinions, the Update focuses on the first set to which three law Lords subscribed.

These Lords allowed the appeals of the Applicants(A, K, and M) in the first case. Briefly, they reasoned that, only express language or necessary implication could override fundamental rights. Thus, the general wording of § 1 of the UNA did not empower the executive branch to override the fundamental rights of these individuals. Moreover, UNSCR 1373 itself did not speak in terms of “reasonable suspicion” Thus, by introducing such a test, the TO went beyond what was necessary or expedient to comply with R 1373. Accordingly, these three court members would quash the TO as ultra vires of the powers conferred on the UK Council by Section 1 of the 1946 UN Act .          

In the second case involving G, the Supreme Court allowed the Applicant’s appeal in part and the Treasury’s appeal in part over one dissent. The Court held that the AQTO, in its effort to effectuate the regime mandated by the UN sanctions committee: [1] failed to provide for basic procedural fairness, and [2] deprived those designated under it of the fundamental right of access to review by an effective judicial remedy. Accordingly, the Court quashed Article 3(1)(b) of the AQTO as ultra vires the powers conferred by the 1946 UNA § 1. It set aside, however, the lower court judge’s declaration that the Order as a whole was ultra vires.         

Lord Hope of Craighead, DPSC, with the concurrence of Lord Walker of Gestingthorpe and Baroness Hale of Richmond JJSC articulated the same rationale. What follows is an attempt to convey the gist of their reasoning, in part verbatim.

In order to give effect within the European Community to SCR 1333 (2000) and its successors, the UK Council adopted Regulation (EC) No 881/2002. It ordered the freezing of the funds and other economic resources of the persons and entities whose names appear on a list annexed to that Regulation.

 The 2008 Act introduced a procedure for setting aside financially restrictive decisions taken by the Treasury. The Treasury imposed the restrictions on the Appellants in this case, however, pursuant to Section 1 of the 1946 Act and not under the specific powers which Parliament fashioned for that purpose.

On July 8, 2009, the Council laid before Parliament a further Order under the UNA in this sequence, the Terrorism (United Nations Measures) Order 2009 (SI 2009/1747). It came into force on August 10, 2009. Like the 2001 and 2006 TOs, it was made under Section 1 of the 1946 Act to give effect to SCR 1373 (2001). While it did revoke the 2006 Order, Article 26(4) provided that persons such as A, K, and M and G who had been designated under the 2006 Order were to remain subject to its terms until August 31, 2010 unless the Treasury revoked their designation by that date.

Two weeks after this Court had concluded the hearing of these appeals, Her Majesty’s government informed G that it had revoked his designation under the 2006 Order but that it had redesignated him pursuant to the 2009 Order. On October 30, 2009 the government told A, K and M that it had redesignated them under the 2009 Order and had revoked their designations under the 2006 Order.

Two of the three cases before this court are appeals against orders made by the Court of Appeal on October 30, 2008. The first case involved A, K and M who are brothers in their thirties. They are UK citizens and, at the time of their designation, lived in East London with their respective wives and children. A and K no longer live with their families, however, and their current whereabouts are unknown.

Their solicitor, with whom they have not been in contact for several months, attributes their unknown whereabouts to the damaging effects upon them and their families of the regimes to which the Treasury had subjected them. They placed an extraordinary burden on their wives, created significant mental health difficulties and led ultimately to the breakdown of their marriages. M’s marriage has also collapsed, but he does live at his ex‑wife’s address with his children.

The government has never charged or arrested either A, K or M for terrorism‑related offenses. Letters dated August 2, 2007 told them that the government had made directions as to each of them under Article 4 of the TO. The letters stated that the Treasury had made the direction because it had reasonable grounds for suspecting that “you are, or may be, a person who facilitates the commission of acts of terrorism.” They added that, due to the sensitivity of the underlying information, the government could not provide them with further details.

After their solicitors had asked for further information, in a letter dated September 12, 2007, the Treasury did disclose that an Al‑Qaida linked operative had identified A and M as East London based Al‑Qaida facilitators and that M and his brother K had traveled to Pakistan intending not only to deliver money to contacts there but also to undergo terrorist training.

A few days later, G got a letter from the Foreign and Commonwealth Office saying that the 1267 Committee of the UNSC had added G’s name to its consolidated list. This meant that he was subject to a freezing of his funds, assets and economic resources. It also pointed out that these measures bound all UN member states and that UK law had merely implemented it. The letter also told G that he could petition the 1267 committee to seek de‑listing. On October 30, 2008, the Court of Appeal allowed the appeal in part.

In the UK Supreme Court, Lord Hope’s opinion, after summarizing the underlying facts, then continues. “The effect of the regimes that the TO and the AQTO impose is that every transaction, however small, which involves the making of any payments or the passing of funds or economic resources whatever, directly or indirectly for the benefit of a designated person, is criminalised. This affects all aspects of his life, including his ability to move around at will by any means of private or public transport. To enable payments to be made for basic living expenses a system of licensing has been created. It is regulated by the Treasury, whose interpretation of the sanctions regime and of the system of licensing and the conditions that it gives rise to is extremely rigorous.”

“The overall result is very burdensome on all the members of the designated person’s family. The impact on normal family life is remorseless and it can be devastating, as the cases of A and K illustrate. As already mentioned, the effects on third parties have been ameliorated to some extent in the case of designations made under the 2009 Order. Some transactions are affected only if they are ‘significant’. But, taken overall, the regime that is imposed under it remains to a high degree restrictive and, so far as the designated person himself is concerned, just as paralysing.” [¶ 38].

 “As [counsel] for A, K and M said at the outset of his submissions, the fundamental issue in this case is whether the Treasury was empowered by Section 1 of the 1946 Act to introduce an asset‑freezing regime by means of an Order in Council (OIC). He submitted that the TO was ultra vires on three grounds: (1) [violation of the EU principle of legality] because it was passed without Parliamentary approval, (2) lack of legal certainty and proportionality and (3) the absence of procedures that enabled designated persons to challenge their designation.” [¶ 40]

 “The question is what limits, if any, there are on the power conferred by this [UNA] subsection. According to its own terms, it extends to ‘any’ measures mandated by the Security Council. The word ‘any’ gives full weight to the obligation to accept and carry out the decisions of the Security Council that Article 25 of the UN Charter lays down. But the provisions that may be imposed by this means in domestic law must be either ‘necessary’ or ‘expedient’ to enable those measures to be ‘applied’ effectively.”

“The exclusion of Section 1(1) of the Rules Publication Act 1893 by Section 1(4) and the direction that the Order is to be ‘forthwith’ after it is laid before Parliament are important pointers to the kind of measure that was envisaged when this provision [of the 1946 UNA] was enacted. They indicate that it was anticipated that the measures that the Security Council was likely to call for would require urgent action rendering Parliamentary scrutiny impracticable. As [was] said in the course of the debate at second reading, the procedure possessed ‘the necessary combination of speed and authority to enable instant effect to be given to the international obligations to which we are pledged’ [Cite].”

“The crucial question is whether the Section confers power on the executive, without any Parliamentary scrutiny, to give effect in this country to decisions of the Security Council which are targeted against individuals.”

“The closer those measures come to affecting what, in [Cite] Lord Hoffmann [once] described as the ‘basic rights of the individual,’ the more exacting this scrutiny must become. If the rule of law is to mean anything, decisions as to what is necessary or expedient in this context cannot be left to the uncontrolled judgment of the executive. [Cite]. ... The undoubted fact that Section 1 of the 1946 Act was designed to enable the United Kingdom to fulfill its obligations under the Charter to implement Security Council resolutions does not diminish this essential principle. ...”

“But these [UNSC] resolutions are the product of a body of which the executive is a member as the United Kingdom’s representative. Conferring an unlimited discretion on the executive as to how those resolutions, which it has a hand in making, are to be implemented seems to me to be wholly unacceptable. It conflicts with the basic rules that lie at the heart of our democracy.” [¶ 45].

 “I would approach the language of Section 1 of the 1946 Act, therefore, on the basis that Parliament did not surrender its legislative powers to the executive any more than must necessarily follow from the words used by it. The words ‘necessary’ and ‘expedient’ both call for the exercise of judgment. But this does not mean that its exercise is unlimited. The wording of the Order must be tested precisely against the words used by the Security Council’s resolution and in the light of the obligation to give effect to it that UNC Article 25 lays down.”

“A provision in the Order which affects the basic rights of the individual but was unavoidable – if effect was to be given to the Resolution according to its terms – may be taken to have been authorised because it was ‘necessary’. A provision may be included which is ‘expedient’ but not ‘necessary’. This enables provisions to be included in the Order which differ from those used by the resolution or are unavoidably required by it. But it does not permit interference with the basic rights of the individual any more than is necessary and unavoidable to give effect to the SCR and is consistent with the [EU law] principle of legality.” [¶ 47].

“Detailed provision is made in Schedule 3 for the content of freezing orders, including a system for the granting of licences authorising funds to be made available. Orders made under the Act are subject to the affirmative resolution procedure (Section 10), and they cease to have effect after two years (Section 8). To a large degree, the power to make freezing orders under this Act enables the Treasury to do what paragraphs 1(d) and 2(d) of SCR 1373 (2001) require. But it is more precisely worded, and it contains various safeguards. Although the test in Section 4(2)(b) is that action which is a threat to the life or property of one or more nationals or residents of the United Kingdom has been or is likely to be taken, it is by no means obvious that the power that it confers was not available for use in the appellants’ cases.”

“In their [explanatory] letter dated 12 September 2007 to A, K and M’s solicitors, the Treasury referred to various contacts between those Appellants and persons in Pakistan who were engaged in terrorist activities. The persons with whom they are said to have been in contact would appear to satisfy the conditions in subSection (2)(b) of Section 4, and they would appear to be persons of the kind referred to in Section 5(3)(b). Yet the Treasury have, it seems, chosen not to make use of the powers given to them by this Act, preferring to use the general power under Section 1 of the 1946 Act. [Counsel argued] that this was a matter for political control. By this I think he meant it was no business of the court to interfere. For the reasons already given, I disagree. In my opinion, the Rule of Law requires that the actions of the Treasury in this context be subjected to judicial scrutiny.” [¶ 53].

“The TO, which was made in 2006 and replaced the 2001 Order, introduced the system, to which objection is taken in this case, for persons to be designated if they are identified in a direction given by the Treasury. The power to designate is set out in Article 4... It provides in paragraph (2)(a) that the Treasury may give a direction if they have reasonable grounds for suspecting that the person is or may be a person who commits, attempts to commit, participates in or facilitates the commission of acts of terrorism.”

“The question is whether, by introducing the words ‘have reasonable grounds for suspecting that the person is or may be’, the Treasury exceeded their powers under Section 1 of the 1946 Act. The Court of Appeal held that the introduction of the ‘reasonable grounds for suspecting’ test was within the ambit of that Section, provided that the person’s right to challenge the direction was preserved: but that there was no warrant in the SCR for the addition of the words ‘or may be’ and that, as the directions under the TO were made by reference to those words, they should be quashed... There is no appeal against its decision as to the inclusion of ‘or may be’, and the Treasury have made fresh directions against A, K, M and G which do not include these words. The validity of the ‘reasonable grounds for suspecting’ test remains in issue.”

“SCR 1373 (2001) is not phrased in terms of reasonable suspicion. It refers instead to persons ‘who commit, or attempt to commit, terrorist acts’. The Preamble refers to ‘acts of terrorism’. The standard of proof is not addressed. The question how persons falling within the ambit of the decision are to be identified is left to the member states. Transposition of the direction into domestic law under Section 1 of the 1946 Act raises questions of judgment as to what is ‘necessary’ on the one hand and what is ‘expedient’ on the other. It was not ‘necessary’ to introduce the reasonable suspicion test in order to reproduce what the SCR requires. It may well have been ‘expedient’ to do so, to ease the process of identifying those who should be restricted in their access to funds or economic resources.”

“But widening the scope of the Order in this way was not just a drafting exercise. It was bound to have a very real impact on the people that were exposed to the restrictions as a result of it. The facts of these cases show how devastating their imposition can be on the restricted persons and their families. This raises fundamental questions, such as [1] the standard of proof that should be required, [2] whether the directions should be capable of being challenged by an effective form of judicial review and [3] whether they should last indefinitely or be time limited. The validity of the introduction of the reasonable grounds test must be assessed in the light of the entire system that the TO provides for. Is it acceptable that the exercise of judgment in matters of this kind should be left exclusively, without any form of Parliamentary scrutiny, to the executive?” [¶¶ 56‑58].

“I do not think that these arguments are sufficient to meet the basic objection to the use of the powers of Section 1 of the 1946 Act to impose the restrictions provided for by the TO on the grounds of a reasonable suspicion only. I can leave aside the use of unsupervised delegated powers to block access to the courts – which Sedley LJ in the Court of Appeal, I think rightly, regarded as a fatal flaw in the Order. [Cite]. It was common ground that, given the intensity of judicial review that would be appropriate under Part 6 of the 2008 Act, this objection has been met by the fact that decisions of the Treasury under the UN Terrorism Orders are subject to its provisions: see Section 63(1)(a) of the 2008 Act. There remains, however, the objection that the restrictions strike at the very heart of the individual’s basic right to live his own life as he chooses. ... It is no exaggeration to say, [Cite] that designated persons are effectively prisoners of the state. I repeat: their freedom of movement is severely restricted without access to funds or other economic resources, and the effect on both them and their families can be devastating.”

 “I would hold that, by introducing the reasonable suspicion test as a means of giving effect to SCR 1373 (2001), the Treasury exceeded their powers under Section 1(1) of the 1946 Act. This is a clear example of an attempt to adversely affect the basic rights of the citizen without the clear authority of Parliament [Cite] As Lord Hoffmann said in Regina v. Secretary of State for the Home Department, Ex p Simms [2000] 2 AC 115, 131, fundamental rights cannot be overridden by general or ambiguous words.”

“The absence of any indication that Parliament had the imposition of restrictions on the freedom of individuals in mind when the provisions of the 1946 Act were being debated makes it impossible to say that it squarely confronted those effects and was willing to accept the political cost when that measure was enacted. In my opinion, the TO is ultra vires Section 1(1) of the 1946 Act and, subject to what I say about the date when these orders should take effect, it, together with the directions that have been made under it, in the cases of A, K, M and G must be quashed.” [ ¶¶ 60‑61].

With the concurrence of his two noble and learned friends, Lord Hope concludes: “I would allow the appeals by A, K, M and G. I would declare that the TO is ultra vires and I would quash that Order. I would allow G’s appeal as regards the AQTO to the extent of declaring that Article 3(1)(b) of that Order is ultra vires and setting aside G’s designation for the purposes of that Order. Had the Terrorism (United Nations Measures) Order 2009 under which A, K, M and G have now been re‑designated been before us, I would have quashed that Order too as it is open to objection on the same grounds.” [¶ 83].

Citation: Ahmed et al. v. Her Majesty’s Treasury, [2010] UKSC 5; [2010] 2 W.L.R. 378; 2010 WL 308594.