No civil recovery of foreign held assets
In Perry v sOCA 2012 UKsC 35 a nine member panel of the supreme Court convened to decide whether Part 5 civil recovery orders could extend to property located outside the UK. In fact, the actual subject matter of what were conjoined appeals was the granting of a Property Freezing Order over property located outside the jurisdiction and disclosure orders against persons located outside the jurisdiction. Perry had been convicted in Israel of a fraud and sentenced to imprisonment. sOCA sought and obtained disclosure orders against a number of individuals, all of whom were located outside the UK. Disclosure orders compel their subject to provide information and failure to comply is a criminal offence. sOCA also sought and obtained a Property Freezing Order against eight respondents freezing assets held worldwide. Perry appealed against both decisions. The case came before a Court of Appeal presided over by the now retired Hooper LJ in 2011. At paragraph 14 in his judgment in the Court of Appeal Hooper LJ said: "Parliament has conferred authority on the enforcement authorities to bring proceedings to vest in a trustee for civil recovery property situated abroad which derives entirely from unlawful conduct abroad where neither the holder of the property, nor any intermediate holders of the property, or property from which the holder's property is derived, have ever been domiciled, resident or present within the jurisdiction; in other words, where there is no connection with the jurisdiction whatsoever." The Court of Appeal refused the appeal. Perry appealed to the supreme Court. Lord Philips found the above proposition to be "startling". The supreme Court noted the distinction between part 3 confiscation in personam proceedings and Part 5 civil recovery in rem proceedings. In simple terms, a confiscation order created an obligation to pay an amount of money in lieu of offending determined by the realisable assets held whether inside or outside the jurisdiction. Part 5 proceedings are against property only and the obligation to make a civil recovery order against that property arises where it has been obtained through unlawful conduct. It matters not who is responsible for the unlawful conduct. The supreme Court rejected the assertion that Parliament could have possibly intended that sOCA be given power over property situated outside the jurisdiction as this "would involve the assertion of an exorbitant jurisdiction in personam without any basis in international law". Both appeals were allowed. To decide otherwise would have created the extraordinary outcome that sOCA had power to freeze property anywhere in the world provided it had a good arguable case that such property was obtained through unlawful conduct wheresoever committed, regardless of where that property was located, and whether the perpetrator of such conduct was a UK citizen or not. Extraordinary indeed.
Articles are intended as an introduction to the topic and do not constitute legal advice.