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You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Sarkandi & Ors, R (On the Application Of) v Secretary of State for Foreign And Commonwealth Affairs [2015] EWCA Civ 687 (14 July 2015) URL: https://www.bailii.org/ew/cases/EWCA/Civ/2015/687.html Cite as: [2015] EWCA Civ 687 |
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ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT
Mr Justice Bean
Strand, London, WC2A 2LL |
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B e f o r e :
LORD JUSTICE SULLIVAN
and
LORD JUSTICE McFARLANE
____________________
The Queen on the application of (1) Ahmad Sarkandi (2) Ghasem Nabipour (3) Mohammad Fard (4) Alireza Ghezelayagh (5) Ahmad Tafazoly |
Appellants |
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- and - |
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Secretary of State for Foreign and Commonwealth Affairs |
Respondent |
____________________
Jonathan Swift QC, Robert Palmer and Caroline Stone (instructed by Government Legal Department) for the Respondent
Angus McCullough QC and Ben Watson (instructed by the Special Advocates' Support Office) appeared as Special Advocates
Hearing dates : 9-10 June 2015
____________________
Crown Copyright ©
Lord Justice Richards :
The EU legislative background
"persons and entities not covered by Annex I that are engaged in, directly associated with, or providing support for, Iran's proliferation-sensitive nuclear activities or for the development of nuclear weapon delivery systems, including through the involvement in procurement of the prohibited items, goods, equipment, materials and technology, or persons or entities owned or controlled by them, including through illicit means, or persons and entities that have assisted designated persons or entities in evading or violating the provisions of UNSCR 1737 (2006), UNSCR 1747 (2007), UNSCR 1803 (2008) and UNSCR 1929 (2010) or this Decision as well as other senior members and entities of IRGC and IRISL and entities owned or controlled by them or acting on their behalf, as listed in Annex II."
"Reasons for listing and notification of the listing
4. Proposals for autonomous listings or additional listings to UN sanctions should include individual and specific reasons for each listing, where the intended sanctions include an asset freeze. It is the responsibility of those submitting the proposal to provide such reasons. Inputs from the Heads of Missions located in the country(ies) concerned will be requested where appropriate.
5. Those reasons should, in principle, be set out as concisely as possible in a separate column in the Annex to the legal act containing the list of the persons, groups and entities to be listed. As this act will be published in the Official Journal, these reasons should be capable of being made public. Notification is effected through publication in the Official Journal.
6. In exceptional cases, where it is considered that the reasons for the listing are not suitable for publication, because of considerations of privacy and security, the reasons will need to be notified (e.g. by letter) to the person, group or entity concerned. Where this is not possible (because no address is available) a notice should be published in the C-series of the Official Journal on the same day as the publication of the legal act in question informing them that the Council will transmit the reasons for their listing to them on request.
Additional information
7. Additional information in support of new proposals, with the appropriate level of classification, may be submitted to the Presidency for distribution by the Council Secretariat. The information provided should meet the criteria set out in the basic legal act (Common Position).
8. A copy of the material circulated will be stored in a centralised archive, to be set up for this specific purpose." (Emphasis in the original.)
"32. In July 2011 HMG began to identify potential entities and individuals for designation in preparation for a further round of EU sanctions. There was also a concern that effective sanctions were time critical due to the risk of Iran reaching a point in its nuclear capability where its progress would be irreversible. Four of the five shipping individuals (the exception being Mr Nabipour) were identified as potentially suitable for proposal to the EU Council on 28 July 2011.
33. Further research and collation of evidence in support of these designations continued through to early September 2011. Mr Nabipour was added to the list of proposed designees on 26 August 2011 following a routine cross-Whitehall meeting to review Iranian shipping developments.
34. On 8 September 2011, the proposal to list the Claimants was given initial consideration by the FCO. Further cross-Whitehall meetings were held on 6 and 12 October 2011 to discuss draft text of the justification for the designation proposals for each of the individuals on the full list.
35. A version of the list amended to reflect the approved unclassified text was sent to the FCO Iran team on 25 October 2011.
36. On 26 October FCO undertook a final review of the unclassified text and examined the list to ensure they were content that the descriptors provided sufficient information to propose the designation. Once consensus was reached, the list was despatched … along with the descriptions/justifications on 31 October 2011 ….
37. In the event, four of the five Claimants (all bar Mr Ghezelayagh) were also proposed for listing to the Council by another Member State."
"44. Mohammad Moghaddami FARD
Identifier: Date of Birth: 19 July 1956, Passport: N10623175 (Iran) issued 27 March 2007; expires 26 March 2012.
Managing Director of Pacific Shipping, and Great Ocean Shipping Services. Set up Crystal Shipping FZE in 2010 as part of efforts to circumvent EU designation of IRISL.
45. Captain Alireza GHEZELAYAGH
Chief Executive Officer of EU-designated Lead Maritime which acts on behalf of HDSL in Singapore. Additionally CEO of EU-designated Asia Marine Network, which is IRISL's regional office in Singapore.
46. Ghasem NABIPOUR, aka M T Khabbazi NABIPOUR
CEO of EU-designated Soroush Saramin Asatir Ship Management Company (SSA SMC) that manages IRISL's vessels. NABIPOUR is IRISL's ship management director.
47. Ahmad SARKANDI
IRISL's financial director as of 2011.
48. Ahmad TAFAZOLY
Identifier: DOB: 27 Mary 1956, POB: Bojnord, Iran, Passport: R10748186 (Iran) issued 22 January 2007; expires 22 January 2012
Managing Director of EU-designated Santexlines."
The pleaded cases in the present judicial review proceedings
"36. In proposing the Claimants for inclusion in the Restrictive Measures, the Secretary of State made manifest and demonstrable errors of fact, acted irrationally and erred in law, for the following reasons.
37. First, there was no lawful or rational basis on which the listing of the Claimants could have been proposed, since none of them falls (or could rationally have been thought to fall) within any of the categories set out in the July 2010 Decision or the October 2010 Regulation which are the essential preconditions for designating individuals ….
…
39. The fact that an individual holds a job in a company is not a permissible reason for his inclusion in the Restrictive Measures. It is not one of the criteria for designation ….
…
42. Second, the Secretary of State proposed their designation on the basis of the following material errors of fact:
(a) Captain Alizera Ghezelayagh is included on the basis that he is CEO of Asia Marine Network and Leading Maritime Pte Ltd. But he resigned from Asia Marine Network in April 2010 and Leading Maritime Pte Ltd ceased operations in September 2011 (before his designation).
(b) Ahmad Sarkandi is said to be the 'Financial Director of IRISL since 2011' but he retired in September 2011, before his designation. He was never a financial director, but was until his retirement a finance senior manager.
(c) Mr Nabipour is said to be the shipping manager for IRISL, but he is not and never has been. He has never been employed in any capacity by IRISL.
(d) Mr Fard has been fully retired since April 2012; there is no conceivable continuing basis for his designation. Oasis Freight Agency ceased its operations in 2008 and was liquidated in November 2011 (before his designation).
(e) Mr Tafazoly has never held a position with companies called IRISL China, Rice Shipping or Santexlines.
43. The Secretary of State was under a duty, prior to deciding to propose the inclusion of a person in the Restrictive Measures, to take reasonable steps and to make proper inquiries in order to acquaint himself with relevant material …."
"34. The Secretary of State is (and was at the time of the decision to propose the Claimants) in possession of evidence on which he was entitled rationally to conclude as follows:
(1) IRISL was engaged in, directly associated with, or provided support for Iran's proliferation-sensitive nuclear activities or for the development of nuclear weapon delivery systems, including through the procurement of the prohibited items, goods, equipment, materials and/or technology.
(2) Each of the listed entities named above as being associated with IRISL was acting on IRISL's behalf, and each of their activities included activities directed towards evading or violating the 2010 Council Decision, the 2010 Council Regulation and/or the UNSCRs.
(3) Each of the Claimants held the positions in IRISL itself and/or within the associated listed entities, as stated in the Council's reasons.
(4) By virtue of their position in the highest echelons of IRISL's wider corporate structure (including those associated companies), they were acting on behalf of IRISL and/or at IRISL's direction.
(5) The Claimants were accordingly 'senior members of IRSIL' within the meaning of Article 20(1)(b) of the 2010 Council Decision.
35. The Secretary of State's proposal to the EU Council was accordingly based on the fact that each of the Claimants were senior members of IRISL, in the sense described above."
The provisions of the 2013 Act relating to a closed material procedure
"6. Declaration permitting closed material applications in proceedings
(1) The court seised of relevant proceedings may make a declaration that the proceedings are proceedings in which a closed material application may be made to the court.
(2) The court may make such a declaration –
(a) on the application of (i) the Secretary of State … or (ii) any party to the proceedings, or
(b) of its own motion.
(3) The court may make such a declaration if it considers that the following conditions are met.
(4) The first condition is that –
(a) a party to the proceedings would be required to disclose sensitive material in the course of the proceedings to another person (whether or not another party to the proceedings), or
(b) a party to the proceedings would be required to make such a disclosure were it not for one or more of the following –
(i) the possibility of a claim for public interest immunity in relation to the material ….
(5) The second condition is that it is in the interests of the fair and effective administration of justice in the proceedings to make a declaration.
(6) The two conditions are met if the court considers that they are met in relation to any material that would be required to be disclosed in the course of the proceedings (and an application under subsection (2)(a) need not be based on all the material that might meet the conditions or on material that the applicant would be required to disclose).
(7) The court must not consider an application by the Secretary of State under subsection (2)(a) unless it is satisfied that the Secretary of State has, before making the application, considered whether to make, or advise another person to make, a claim for public interest immunity in relation to the material on which the application is based.
(8) A declaration under this section must identify the party or parties to the proceedings who would be required to disclose the sensitive material ('a relevant person').
…
(11) In this section –
'closed material application' means an application of the kind mentioned in section 8(1)(a);
'relevant civil proceedings' means any proceedings (other than proceedings in a criminal cause or matter) before (a) the High Court, (b) the Court of Appeal ….
'sensitive material' means material the disclosure of which would be damaging to the interests of national security."
"8. Determination by court of applications in section 6 proceedings
(1) Rules of court relating to any relevant civil proceedings in relation to which there is a declaration under section 6 ('section 6 proceedings') must secure –
(a) that a relevant person has the opportunity to make an application to the court for permission not to disclose material otherwise than to (i) the court, (ii) any person appointed as a special advocate, and (iii) where the Secretary of State is not the relevant person but is a party to the proceedings, the Secretary of State,
(b) that such an application is always considered in the absence of every other party to the proceedings (and every other party's legal representative),
(c) that the court is required to give permission for material not to be disclosed if it considers that the disclosure of the material would be damaging to the interests of national security
(d) that, if permission is given by the court not to disclose material, it must consider requiring the relevant person to provide a summary of the material to every other party to the proceedings (and every other party's legal representative),
(e) that the court is required to ensure that such a summary does not contain material the disclosure of which would be damaging to the interests of national security.
(2) Rules of court relating to section 6 proceedings must secure that provision to the effect mentioned in subsection (3) applies in cases where a relevant person –
(a) does not receive the permission of the court to withhold material, but elects not to disclose it, or
(b) is required to provide another party to the proceedings with a summary of material that is withheld, but elects not to provide the summary.
(3) The court must be authorised –
(a) if it considers that the material or anything that is required to be summarised might adversely affect the relevant person's case or support the case of another party to the proceedings, to direct that the relevant person –
(i) is not to rely on such points in that person's case, or
(ii) is to make such concessions or take such other steps as the court may specify; or
(b) in any other case, to ensure that the relevant person does not rely on the material or (as the case may be) on that which is required to be summarised."
The application under section 6 of the 2013 Act.
The judgment below
"Those are points which he can no doubt develop at the substantive hearing for judicial review, where they will have to be evaluated in the light of all the evidence then before the court. But they do not arise at this interlocutory stage. Section 6 does not require me as a prerequisite to making a CMP declaration to conclude, for example, that the Secretary of State is more likely than not to succeed in defeating the substantive claim. I consider that I need to be satisfied that the Secretary of State has an arguable defence and that the sensitive material appears prima facie to be relevant and to support that defence."
"36. … It cannot, therefore be in the interests of the fair and efficient administration of justice to make a declaration allowing a CMP [closed material procedure] unless it is necessary to do so, and it will not be necessary to do so if there are satisfactory alternatives."
He rejected the submission of the special advocates that an application for PII combined with the provision of a gist of the sensitive material would be a practicable alternative:
"37. … The present claim challenges the rationality of the Secretary of State's decision. The detail of the material available to the decision-maker is essential to an evaluation of the substantive case. An application for PII would exclude it from consideration.
38. As to gisting: the overall gist of the sensitive material is set out at paragraph 34(ii) to (iv) of the Detailed Grounds of Defence. I do not consider that any useful further particulars of the evidence could be provided as open material without the risk of damaging national security. As to a confidentiality ring, a possibility which was only faintly hinted at, I regard it as wholly impracticable in a case of this kind: as Lord Mance said in Somerville v Scottish Ministers [2007] 1 WLR 2734 at [203], it would put counsel for the claimants in 'an invidious and unsustainable position'."
He then cited observations of Irwin J in CF v Security Service; Mohamed v Foreign and Commonwealth Office [2013] EWHC 3402 (QB) at paragraphs 45 and 52, to which I will return. He expressed agreement with Irwin J's observations and concluded that there was no practicable alternative to a closed material procedure if the present case was to be fairly tried, and that the second condition was satisfied.
The first condition: requirement to disclose sensitive material
The case for the claimants
Discussion of the first condition
"In order to advance a submission that a control order was valid when made but only succumbed to legal difficulty at a later date, the Secretary of State would have to establish that, in relation to the point for which he is asserting legality, he can satisfy the court as to the reasonable grounds for his suspicion of terrorism-related activity and the need for public protection. However, he could only do that by relying on the material that he is unwilling to disclose or gist. In other words, he would need to resort now to closed material in a manner not countenanced by AF (No.3). Whilst I accept Mitting J's suggestion that, in court, the Secretary of State does not have to rely on all the material that led him to his view about terrorism-related activity and public protection, he does have to rely (with consequential disclosure obligations) on sufficient of it to satisfy the court that his decision to make a control order was and is not flawed. In these cases, he has chosen not to do so. I shall assume that he has reasonable grounds for exercising that choice. However, its consequence is that he has disabled himself from satisfying this appellate court that, throughout, he has been able to satisfy section 2(1). In essence, we are being invited to assume that, but without access to the relevant material. We are being asked to find that he acted reasonably when, in truth, that is something that we cannot test against the material relied upon by the Secretary of State." (Emphasis in the original.)
"29. I do not accept that this reasoning is applicable to the present case. Under the system of non-derogating control orders the Home Secretary himself made the order. The court could not assess the lawfulness of the order, and the controlee could not challenge it in court, without knowing at least the gist of the evidence on which it had been based. This is in contrast with the present case, where the designation of the claimants was a decision of the EU Council, not of the Foreign Secretary. In English law a prosecutor, and in some circumstances (for example when applying for an injunction without notice) a claimant in civil proceedings, is under a duty to disclose to both the court and the defendant material which weakens his case. But he is not under the same duty to disclose material (such as a tip-off to police) which does not weaken his case and which influenced him to begin the proceedings."
The second condition: the interests of the fair and effective administration of justice
The case for the claimants
Discussion of the second condition
"2. The idea of a court hearing evidence or argument in private is contrary to the principle of open justice, which is fundamental to the dispensation of justice in a modern, democratic society. However, it has long been accepted that, in rare cases, a court has inherent power to receive evidence and argument in a hearing from which the public and the press are excluded, and that it can even give a judgment which is only available to the parties. Such a course may only be taken (i) if it is strictly necessary to have a private hearing in order to achieve justice between the parties, and, (ii) if the degree of privacy is kept to an absolute minimum ….
3. Even more fundamental to any justice system in a modern, democratic society is the principle of natural justice, whose most important aspect is that every party has a right to know the full case against him, and the right to test and challenge that case fully. A closed hearing is therefore even more offensive to fundamental principle than a private hearing. At least a private hearing cannot be said, of itself, to give rise to inequality or even unfairness as between the parties. But that cannot be said of an arrangement where the court can look at evidence or hear arguments on behalf of one party without the other party ('the excluded party') knowing, or being able to test, the contents of that evidence and those arguments ('the closed material'), or even being able to see all the reasons why the court reached its conclusions.
4. In Al Rawi v Security Service [2012] 1 AC 531, Lord Dyson JSC made it clear that, although 'the open justice principle may be abrogated if justice cannot otherwise be achieved' (para 27), the common law would in no circumstances permit a closed material procedure ….
…
8. In a number of statutes, Parliament has stipulated that, in certain limited and specified circumstances, a closed material procedure may, indeed must, be adopted by the courts. Of course, it is open to any party affected by such legislation to contend that, in one respect or another, its provisions, or the ways in which they are being applied, infringe article 6. However, subject to that, and save maybe in an extreme case, the courts are obliged to apply the law in this area, as in any other area, as laid down in statute by Parliament."
"45. I have also considered carefully the various submissions for alternative mechanisms intended to deal with the problem of sensitive material. What of gisting and summary? Much of the material here could not be summarised or gisted without either being summarised so generally as to be excessively bland, or causing the damage to national security which is feared. That conclusion proceeds from the nature of the material. I do not consider that gists or summaries provide the means to dispense with a closed material procedure and yet mount an effective trial. It is a rather different question as to whether, if a closed material procedure takes place, summaries and gists may play a role in permitting the Claimants and their representatives to give evidence focussed on the issues, and ensure their accounts cover the points which need to be addressed. That will need careful and detailed consideration.
…
52. Difficult though closed material procedures can be, they do carry the benefit that the Claimants have both a team of lawyers who can communicate freely with them, and special advocates who cannot communicate directly with them, but who will be aware of all the evidence, and can test it thoroughly, with the Claimants' instructions and evidence in mind. The court will be alive to the need to open as much evidence as possible, and to ensure that the Claimants address in evidence all that needs to be covered. Experience of conducting closed material procedures does suggest that given care about the practicalities, given an emphasis on ensuring the issues are properly addressed, combined with caution and clear thinking as to the inferences that can fairly be drawn, a just result can be achieved. The problem that cannot be overcome is that justice cannot be seen to have been done. Certainly, the risks attendant on a confidentiality ring are high, in my view, and would be so here."
Conclusion
Lord Justice Sullivan :
Lord Justice McFarlane :