On 16 December 2014 the Grand Chamber Panel of the European Court of Human Rights refused the Russian Government’s request for a reference of the Yukos award of just satisfaction to the Grand Chamber. As a result the Eur Ct HR’s Yukos v Russia judgment of 31 July 2014 became final.

That judgment awards €1.87 Bn in compensation for the violation of Yukos Oil Company’s property rights. Yukos was dissolved as a result of the Russian authorities’ enforcement measures, which the Eur Ct HR held violated Article 1 Protocol No 1. As a result the judgment orders that the compensation should be payable to the former shareholders in Yukos at the time of its dissolution in 2007. The judgment also requires the Russian Government within six months to agree a scheme of distribution with the Committee of Ministers of the Council of Europe for the prompt payment of the compensation. There are more than 56,000 former shareholders in Yukos, from Russia and a variety of European and other countries.

The judgment specifies that compensation is payable in rubles, converted at the exchange rate prevailing at the date of payment. The ruble value of the award, which is by far the largest ever made by the Eur Ct HR, has increased by approximately 79% since the judgment was given on 31 July 2014.

Piers Gardner of Monckton Chambers represented Yukos Oil Company throughout the proceedings before the European Court of Human Rights.

The judgment has received the following press coverage:

• http://www.themoscowtimes.com/business/article/european-top-human-rights-court-rejects-russia-s-appeal-over-yukos/513469.html
• http://sputniknews.com/business/20141217/1015923249.html
• http://rapsinews.com/judicial_news/20141216/272791589.html

 

 

 

In a judgment released this morning (R (European Federation for Cosmetic Ingredients v Secretary of State for Business, Innovation and Skills and the Attorney General [2014] EWHC 4222 (Admin)), Mr Justice Lewis has asked the European Court of Justice to rule on the interpretation of the EU ban on animal testing of cosmetics products and ingredients used in cosmetics. That ban is contained in Article 18 of Regulation 1223/2009/EU on cosmetics products. The ban prohibits the marketing in the EEA of cosmetics products tested on animals or containing ingredients tested on animals, where such testing was done in order to meet the requirements of the Regulation.

The questions referred concern the extent to which the ban applies to cosmetics products or ingredients tested on animals for the purposes of regulatory requirements imposed by non-EEA countries.

The European Court of Justice is likely to take around 18 months to give its ruling on this issue.

George Peretz represented BIS and the Attorney General; Alan Bates represented the British Union for the Abolition of Vivisection and the European Coalition to end Animal Experiments, which intervened in the proceedings.

In a judgment handed down on 8 December 2014, the High Court rejected a claim that the Housing Act 1985 was incompatible with the ECHR. The Claimant had argued that the scheme was contrary to Article 14 because it discriminated between married and unmarried partners in the provision it made for a partner to take over a secure tenancy upon the death of the tenant. Finding for the Secretary of State, Mr Justice Knowles held that any difference in treatment was objectively and reasonably justified. This is the first case in which the courts have considered the compatibility of this aspect of the Housing Act 1985 with the ECHR. It underlines the margin of discretion afforded to Parliament in relation to matters of social and economic policy such as the allocation of social housing.

Ben Lask appeared for the Secretary of State for Communities and Local Government.

Please click to view the full judgment in Turley v Wandsworth

 

Two opinions on existing and proposed legislation in Azerbaijan and the Russian Federation have been prepared by Jeremy McBride for the Expert Council on NGO Law of the Council of Europe’s Conference on International Non-governmental Organisations.

The opinion on the Azeri legislation is concerned with changes made in 2009 and 2013 to the Law on Non-Governmental Organisations and several related laws. The opinion found that these had reversed in a number of significant respects previous efforts to develop a legal framework for the establishment and operation of NGOs that meets the requirements of European and international standards. This was especially so as regards the restrictions on ‘political’ and ‘governmental’ activities, the choice of names, the ability to be founders and office-holders, the capital requirements for foundations and the basis on which foreign NGOs will be allowed to operate, as well as the requirements governing the receipt and use of funding, the excessive formalisation of the role of volunteers, the threat of disclosure of details relating to members, the considerable enhancement of regulatory requirements and supervisory powers and the introduction of new and extended penalties. The generally retrograde nature of the changes has been exacerbated by factors such as the continuing problem of delay in registration of NGO and of grants received by them, the freezing of their bank accounts and the criminal proceedings brought against leaders of NGOs promoting human rights and peace on seemingly improbable charges.

The opinion concerning the Russian Federation relates to a draft law which would, amongst other changes to existing legislation, authorise the activities of a foreign or international organisation to be recognised as ‘undesirable’ on the basis solely of information provided by internal affairs, security and other federal executive agencies that alleges they present a threat to defence capacity, national security, public order, public health, public morals and the rights and legitimate interests of other persons. The effect of such recognition would mean that the organisation  concerned could not establish or continue to operate any structural subdivisions in Russia, would be entered into the roster regarding involvement in extremist activities or terrorism and could not disseminate, produce or store their informational materials.  Any participation in the activities of a designated entity would be an offence that could lead to imprisonment and disqualification from engaging in certain activities. The opinion indicates that such a power of designation for reasons that lack real specificity and on the basis solely of information that is untested by a court fails to satisfy the quality of law requirement for a restriction on the right to freedom of association. Furthermore, the consequential restrictions are likely to result in violations of the rights to respect for private life and to freedom of expression

Please click to view Opinion on introducing amendments to legislative acts in Russian Federation

Please click to view Revised Opinion on Azerbaijan NGO Law 2013

 

 

R (on the application of Lord Carlile of Berriew QC and others) v Secretary of State for the Home Department [2014] UKSC 60

A cross-party group of MPs and peers together with Maryam Rajavi, a dissident Iranian politician resident in Paris, challenged a decision by the Secretary of State to maintain Mrs Rajavi’s exclusion from the UK. Mrs Rajavi sought entry to the UK in order to speak, at the invitation of the Parliamentary Appellants, on the subject of democracy and human rights in Iran at the Palace of Westminster. The Secretary of State excluded Mrs Rajavi not because of anything Mrs Rajavi might say or do here but because the Secretary of State thought Mrs Rajavi’s presence here would have a damaging effect on Britain’s relations with Iran and may lead to retaliatory action by Iran against British interests abroad.

Finding for the Secretary of State (Lord Kerr dissenting), each of the five Justices hearing the case provided important judgments on how a court is to judge the proportionality of interferences with fundamental ECHR Rights in the context of decisions raising foreign policy issues.

The full judgment can be read here: http://www.bailii.org/uk/cases/UKSC/2014/60.html

Robert Palmer appeared for the Secretary of State.

In Rio Tinto London v HMRC, a decision released on 27 November, the First-tier Tribunal has clarified the circumstances in which there is a “reduction of consideration” giving rise to a right to VAT repayment under regulation 38 of the VAT Regulations 1995  (which implements Article 90 of the Principal VAT Directive).

The Tribunal dismissed a claim by an employer for a repayment of around £1.5 million VAT that it had accounted for on various services that it had supplied  to the trustees of its defined-benefit employee pension fund.  The basis of the claim was that it had agreed with the fund a retrospective 30% price reduction (dating back to 1973) and had accordingly made a payment of just over £6 million to the fund.  It therefore argued that there had been a reduction in consideration for the purposes of regulation 38 and that it was entitled to a corresponding repayment of VAT. 

The Tribunal rejected that claim.  It noted that the employer had argued that the 30% “price reduction” had been justified by an HMRC Notice on the VAT treatment of supplies to pension funds (700/17), but that that argument had not survived cross-examination, and that in cross-examination the employer had been unable to explain on what basis the figure of 30% had been agreed. 

The Tribunal concluded that the payment had been made in order to present the price adjustment as a decrease in consideration for the purposes of regulation 38 and, possibly, to confer a gratuitous benefit on the fund.  The Tribunal then held that, though a “reduction in consideration” for the purposes of regulation 38 could be agreed after the supply and without there being any contractual provision for it, there had to be “some change in circumstance or the occurrence of an event (other than a mere change in view of the correct VAT treatment of the supply) after the supply has been made which leads or obliges the supplier (or the supplier and customer) to consider that the original invoiced consideration should be altered“.  That had not happened in that case and so HMRC had been right to reject the claim.

George Peretz represented HMRC before the Tribunal

 

Ofcom has rejected a plea by Royal Mail to impose a universal service obligation on rival operator Whistl (formerly TNT Post) in respect of its direct delivery (or ‘end-to-end) letter post services.  Whistl now delivers mail direct to letterboxes in many areas of London and Manchester using its own postmen and women, instead of accessing Royal Mail’s delivery network in those areas, and has plans to expand direct delivery to other areas.

In its Statement on end-to-end competition in the postal sector, published today, the UK communications regulator found that direct delivery competition had an important role to play in promoting efficiency in postal services including at the delivery level.  The evidence did not support Royal Mail’s claim that its universal service was under threat from direct delivery competition.

Ofcom also dismissed Royal Mail’s complaint that Whistl’s incremental roll-out of direct delivery to selected geographical areas represented unfair competition.  Royal Mail’s ability to charge ‘zonal ’ prices for delivery network access enable it to charge Whistl and other customers accessing Royal Mail’s delivery network only in some geographical areas prices that reflect Royal Mail’s costs of delivering to those areas.  Ofcom found that, provided that the zonal prices were properly reflective of Royal Mail’s costs of delivering to each zone, it would be profitable for Whistl to carry out direct delivery itself only if and where that option was more efficient than using Royal Mail’s delivery network access service.

At the same time as publishing the Statement, Ofcom has published proposals for changes to Royal Mail’s delivery network access pricing arrangements to prevent the pricing scheme from being adjusted in ways that might undermine direct delivery competition, and to enable Royal Mail to receive a fair return from the use of its assets.  Separately, Ofcom is continuing its investigation into Whistl’s complaint that Royal Mail’s announcement in January 2014 of changes to its access pricing scheme were an abuse of dominant position.

Monckton barrister Alan Bates is advising Whistl.

OJSC Rosneft Oil Company v. HM Treasury; the Secretary of State for Business, Innovation, and Skills; the Financial Conduct Authority

The Divisional Court today rejected an attempt to block the coming into force of UK laws criminalising the breach of EU sanctions against Russia. The Russian oil company, Rosneft, launched a last minute attempt to delay the measures, which come into force on Saturday 29 November 2014, arguing that the offences were insufficiently clear and in breach of the principle of legal certainty under the ECHR and the common law.

From this weekend it will be an imprisonable offence in the UK to breach the prohibition in Article 3a of EU Regulation 833/2014 on providing certain services, such as drilling and the supply of floating vessels, necessary for the exploration and production of oil in deep water and the Russian Arctic. Penalties are similarly imposed for providing services relating to shale oil projects in Russia.

In an urgent application for interim relief Rosneft argued that the UK’s legislation was unlawful because it depended on terms in the EU Regulation that were uncertain in scope. It argued that terms such as ‘deep water’ and ‘arctic’ were so vague that they violated common law and European human rights principles requiring criminal laws to have clarity and precision.

Gerry Facenna, representing the Government, defended the laws, arguing that there was no serious doubt about their legality and that delaying implementation would “undermine the co-ordinated international effort to make an effective response to Russia’s actions in Ukraine”.

Lord Justice Beatson and Mr Justice Simon accepted the Government’s arguments, holding that Rosneft did not come near the threshold for demonstrating that the relevant provisions were invalid, since the laws would have clear application in some cases. They reasoned that, whilst there may be doubt about whether a depth of 500 feet would constitute deep water, it was clear that 1000 metres would. They found that there was no risk to Rosneft of serious irreparable harm and took into account that a delay in implementation would inevitably undermine the effectiveness of the sanctions.

Having failed to obtain interim relief, Rosneft intends to continue its substantive challenge to the EU’s Russian sanctions and is seeking a reference to the CJEU. The Divisional Court ordered that there should be a rolled-up hearing early in the New Year.

Gerry Facenna is acting with Julianne Kerr Morrison for the Treasury and the Secretary of State for Business, Innovation and Skills.

Please click to view the full judgment in OJSC Rosneft Oil Company v. HM Treasury; the Secretary of State for Business, Innovation, and Skills; the Financial Conduct Authority

 

On 14 November 2014, President Spielmann received a delegation from the Council of Bars and Law Societies of Europe (CCBE) led by his President, Aldo Bulgarelli, for a working meeting. During the visit the delegation also met Guido Raimondi, Vice-President and judge elected in respect of Italy, Işıl Karakaş, judge elected in respect of Turkey, Julia Laffranque, judge elected in respect of Estonia, Aleš Pejchal, judge elected in respect of Czech Republic and members of the Registry.

Piers Gardner of Monckton Chambers is the UK member of the CCBE Permanent Delegation to the European Court and participated in the meeting.

The Technology and Construction Court handed down an important judgment last week, on 12 November 2014, which provides a clear statement on the scope of a contracting authorities duties under the Utilities Contracts Regulations 2006 (and the Public Contracts Regulations 2006) in relation to abnormally low bids in the field of procurement and also serves as a cautionary tale in terms of the promptness required in pleading amendments in procurement litigation.

The context was an application on the part of GAL to strike out parts of NATS’ pleading in its claim brought in connection with the recent award by GAL of an air navigation services contract to DFS. One of the bases of NATS’ claim was that DFS’s bid was abnormally low and should have been rejected on that basis. The issue being whether that plea was good in law, a review of the case law concerning successive procurement Directives of, inter alia, the European Court of Justice led Mr Justice Akenhead to find that neither the Directives nor the implementing Regulations require a contracting authority or utility to determine whether a bid is abnormally low, nor is there any obligation on them to reject an abnormally low bid. Rather, the limit of the duty upon contracting authority or utility is that, where it does consider a bid to be abnormally low, it must afford the bidder an opportunity to explain itself before its bid can be rejected on those grounds. On that basis NATS’s claim that DFS’ bid should have been rejected as an abnormally low bid was struck out. The judge further struck out late amendments to the claim which threatened GAL’s ability to prepare properly for trial. Although not a novel situation in strike out applications, the judge considered as highly relevant to his discretion the particular features of procurement litigation in which time is of the essence.

Please click to view the full NATS (Services) Limited v Gatwick Airport Limited judgment.

Michael Bowsher QC, Rob Williams and Daisy Mackersie (instructed by Freshfield Bruckhaus Deringer) for the Defendant

Philip Moser QC (instructed by Simmons & Simmons LLP) for an Interested Party (DFS Deutsche Flugsicherung GMBH)

Anneli Howard acted for the CAA in their intervention pursuant to the Competition Law Practice Direction on disclosure and confidentiality issues.