Mints sanctions judgment puts ‘control’ under spotlight

On 6 October 2023, in the case of Mints -v- PJSC National Bank Trust & Anr, the UK’s Court of Appeal handed down a significant judgment about the meaning and effect of the UK’s Russia sanctions, with far-reaching commercial and legal implications.

Alistair Jones, Of Counsel at the law firm Peters & Peters, observed, ‘Sir Julian Flaux C’s most controversial, but perhaps unsurprising, findings came in the form of obiter remarks about how “control” is to be construed under the Russia Regulations.

‘The Court of Appeal concluded that control can be established under Regulation 7 by whatever means, including political and corporate office. If the consequence of giving Regulation 7 its correct meaning was “that every company in Russia was ‘controlled’ by Mr Putin and hence subject to sanctions… then the remedy is not for the judge to put a gloss on the language to avoid that consequence, but for the executive and Parliament to amend the wording of the Regulations to avoid such a consequence,’ said Jones.

He added that Flaux went on to say, ‘The absurd consequences arise not from giving the Regulation its clear and wide meaning but from the subsequent designation by the Government of Mr Putin, without having thought through the consequences that … Mr Putin is at the apex of a command economy.’

Jones commented: ‘In a country where Mr Putin “calls the shots”, this has left sanctions lawyers wondering about the permissibility of any continued dealings with Russian entities, especially state-owned entities.’  

He noted that the Court of Appeal also upheld the High Court’s conclusion that UK sanctions do not curtail the right of designated persons to access the courts and obtain a money judgment.

Jones said it made ‘telling findings about the UK licencing regime, concluding that steps such as paying adverse costs, the satisfaction of an order for security for costs, the payment of damages pursuant to a cross-undertaking are all in principle licensable by the Office of Financial sanctions Implementation,’ or OFSI.

https://www.judiciary.uk/wp-content/uploads/2023/10/Mints-v-PJSC-judgment-061023.pdf