HM Treasury v Ahmed & Ors

Factual and Procedural Background

The Supreme Court delivered judgment on 27 January 2010 declaring that two executive instruments—the Terrorism (United Nations Measures) Order 2006 and article 3(1)(b) of the Al-Qaida and Taliban (United Nations Measures) Order 2006—were ultra vires and therefore void from inception. The instruments had nevertheless been acted upon by third parties, most notably banks, resulting in the continued freezing of funds belonging to several designated persons (collectively, “the Appellants”). After judgment was handed down, the Respondent (Company A) asked the Court to delay, or “suspend,” the formal quashing of the impugned provisions so that replacement measures could be enacted. The present opinion resolves whether such a suspension should be granted.

Legal Issues Presented

1. Does the Supreme Court possess the power to suspend the operation of its quashing orders after declaring the impugned measures ultra vires?
2. If such power exists, should the Court exercise it in order to maintain the practical effect of the invalid measures until replacement legislation is in place?

Arguments of the Parties

Respondent’s Arguments (Company A)

• The Court has jurisdiction under its procedural rules to postpone the operative date of its orders.
• A short suspension (eight weeks for the Terrorism Order and six weeks for the Al-Qaida Order) would prevent the immediate release of frozen assets by third-party financial institutions, thereby safeguarding national security and ensuring continued compliance with international obligations.
• Suspension would not confer temporary legality on the void provisions; it would merely delay the date on which the quashing takes effect, with full retroactive effect preserved.

Appellants’ Position

• They conceded that the Court had power to suspend but opposed its exercise, contending that suspension would mislead third parties into believing the invalid provisions remained lawful.

Intervenor Position (Neutral)

• One appellant, through Attorney Husain, adopted a neutral stance and indicated no objection to a limited suspension affecting his own designation.

Table of Precedents Cited

Court's Reasoning and Analysis

Majority (per Judge Phillips, joined by Judges Rodger, Walker, Hale, Brown and Mance)

• The Court undeniably has the procedural power to suspend its orders, but exercising that power here would “obfuscate” the legal reality that the impugned Orders are void ab initio.
• A suspension would likely mislead third parties into assuming the invalid provisions retained legal force, the very outcome the Respondent sought.
• Because suspension would not—and could not—bestow temporary validity, its only practical effect would be to encourage mistaken reliance on measures already declared unlawful. The Court should not participate in such confusion.
• Therefore, no part of the Court’s order should be suspended.

Dissent (Judge Hope)

• Agreed that the Court had power to suspend and argued it should do so to protect national security and fulfil international obligations while replacement measures are enacted.
• Emphasised the practical reality that banks would continue freezing assets if the order were suspended, thereby avoiding potentially “serious and irreversible” damage, analogous to the approach in Kadi.
• Proposed suspensions of eight weeks for the Terrorism Order and six weeks for the Al-Qaida Order, asserting that such short delays would not prejudice legal remedies but would maintain essential safeguards.

Holding and Implications

HOLDING: The Court refused to suspend any portion of its order; the Terrorism (United Nations Measures) Order 2006 is declared ultra vires and quashed, and article 3(1)(b) of the Al-Qaida and Taliban (United Nations Measures) Order 2006 is likewise declared ultra vires and quashed, with immediate effect.

Implications: The decision immediately removes all legal basis for the restrictions previously imposed under the impugned Orders. Financial institutions and other third parties can no longer rely on those measures to restrict access to funds. The ruling sets no new precedent on prospective overruling but clarifies that the Court will not employ its suspension power merely to preserve the practical effect of an unlawful instrument.