Factual and Procedural Background
The Respondent requested the extradition of the Appellant, a dual-national resident in the United Kingdom, to stand trial in a United States federal court for seventeen counts of securities-related fraud. According to the indictment, the Appellant paid intermediaries for confidential “material non-public information” concerning prospective corporate mergers and exploited that information by trading contracts for difference (CFDs) through a broker in the United Kingdom, allegedly generating profits of almost US$2 million.
The United Kingdom Financial Conduct Authority investigated between 2016 and 2018 but found insufficient evidence to prosecute. The United States then issued an arrest warrant and an extradition request. After a hearing before Judge Baraitser, the case was sent to the Secretary of State, who ordered extradition. The High Court (Judge Holroyde and Judge Stacey) dismissed the Appellant’s appeal but certified a point of law. The Supreme Court (Judge Lloyd-Jones delivering the lead judgment, with Judges Leggatt, Reed, Briggs and Stephens agreeing) granted permission and heard the present appeal.
Legal Issues Presented
- Whether the alleged conduct constitutes an “extradition offence” within the meaning of section 137 of the Extradition Act 2003.
- Whether the correct subsection governing double criminality is section 137(3) (conduct occurring in the requesting territory) or section 137(4) (conduct occurring outside it).
- Whether the High Court erred in applying section 137(3)(b) to the facts.
- Whether the obiter dicta in Office of the King’s Prosecutor v Cando Armas concerning the place where “conduct” occurs were correct.
Arguments of the Parties
Appellant's Arguments
- The conduct, virtually all of which took place in the United Kingdom, should be analysed under section 137(4), not section 137(3); the double-criminality test in subsection (4)(b) is therefore not met.
- Extraditing a person for conduct committed in the United Kingdom is contrary to principle and would create an “exorbitant” foreign jurisdiction.
- Subsection (3)(b) cannot be satisfied unless the Court also transposes UK-based acts outside the United Kingdom, mirroring the wording of subsection (4)(b).
- The dicta in Cando Armas that equate intended effects in the requesting state with conduct “in” that state are erroneous and should not govern section 137.
Respondent's Arguments
- The effects of the Appellant’s trades were felt on U.S. markets; accordingly, the conduct occurred “in” the United States for the purposes of section 137(3)(a).
- Under section 137(3)(b) the Court need only ask whether the conduct, which in fact happened in the United Kingdom, would amount to an offence if committed there; it is common ground that it would constitute insider dealing under section 52 of the Criminal Justice Act 1993.
- In the alternative—advanced only at the Supreme Court hearing—if section 137(4) applies, equivalent conduct abroad would still amount to offences such as fraud (Fraud Act 2006) or money laundering (Proceeds of Crime Act 2002).
Table of Precedents Cited
| Precedent |
Rule or Principle Cited For |
Application by the Court |
| Norris v Government of the United States of America [2008] AC 920 |
Adopts the “conduct test” for double criminality under the 2003 Act. |
Relied upon to reaffirm that section 137 is concerned with the conduct alleged, not with matching legal ingredients. |
| Office of the King’s Prosecutor v Cando Armas [2005] UKHL 67 |
Previously suggested that acts abroad with intended effects in the requesting state amount to conduct “in” that state. |
Supreme Court rejects that dicta as mistaken, limiting “conduct” to where acts are physically done. |
| Director of Public Prosecutions v Stonehouse [1978] AC 55 |
Example of domestic courts exercising jurisdiction over acts done abroad with intended domestic effects. |
Cited only as part of the background to Lord Hope’s reasoning in Cando Armas; Court finds analogy misplaced. |
| Clements v HM Advocate 1991 JC 62 |
Same jurisdictional principle as Stonehouse. |
Referenced in discussion of Cando Armas; not determinative of present appeal. |
| HM Advocate v Megrahi 2000 JC 555 |
Further illustration of territorial jurisdiction based on effects. |
Used only to show context of Lord Hope’s dicta; Court declines to follow. |
| Cleveland v Government of the United States of America [2019] EWHC 619 (Admin) |
Explains “transposition” when applying section 137(3)(b). |
Cited as a paradigm example of subsection (3)(b) analysis. |
| R (Al-Fawwaz) v Governor of Brixton Prison [2002] 1 AC 556 |
Purpose of double criminality: protection against exorbitant foreign jurisdiction. |
Supports need for tighter safeguards when extra-territorial jurisdiction is claimed. |
| Hosseini v Head of the Prosecution Department, Paris [2006] EWHC 1333 |
Distinguishes the wording of subsections (3) and (4); rejects dual transposition under (3)(b). |
Approved and followed. |
| Kodos v Prosecutor General of Lithuania [2010] EWHC 897 |
Applies same reasoning as Hosseini. |
Cited with approval. |
| R v Rogers [2014] EWCA Crim 1680 |
Held that Proceeds of Crime Act 2002 has extra-territorial reach. |
Supreme Court declares Rogers wrongly decided and declines to follow it. |
| Subsequent extradition cases relying on Rogers (Sulaiman, Jedinak, Balaz, Rogala) |
Applied the extra-territorial view of Rogers. |
Implicitly disapproved to the extent they followed Rogers. |
Court's Reasoning and Analysis
1. The Court identified that section 137 establishes mutually exclusive routes: subsection (3) for conduct occurring in the requesting territory and subsection (4) for conduct occurring outside it.
2. Reviewing the facts, the Court held that all substantive acts—receiving inside information, trading CFDs, and paying intermediaries—took place in the United Kingdom; the sole U.S. hotel payment was an incidental narrative detail. Consequently the case falls under subsection 137(4), not subsection (3).
3. The Court revisited the obiter dicta in Cando Armas which treated intended foreign effects as “conduct” within a territory. It found those dicta:
- Inconsistent with statutory language;
- Disruptive of the binary structure of subsections (3) and (4);
- Founded on an incorrect assumption that common-law jurisdictional rules govern the allocation exercise.
4. Having allocated the case to subsection (4), the Court applied the double-criminality test in subsection (4)(b). This required a mirror-image transposition: assuming the same acts occurred outside both the United States and the United Kingdom.
5. Under that hypothesis, the conduct would not constitute insider dealing in the United Kingdom because section 62 of the Criminal Justice Act 1993 restricts the offence territorially. Nor would it amount to money-laundering under section 329 of the Proceeds of Crime Act 2002; the Court held that statute has no extra-territorial reach and expressly overruled the contrary decision in R v Rogers.
6. Because equivalent conduct would not be triable in the United Kingdom on an extra-territorial basis, the condition in subsection 137(4)(b) failed. Therefore no “extradition offence” was established.
Holding and Implications
Appeal ALLOWED; extradition order QUASHED; Appellant DISCHARGED.
The decision re-clarifies the territorial allocation in section 137, confines “conduct” to the location of acts, and disapproves reliance on intended market effects. It corrects the interpretation in Cando Armas and overrules R v Rogers, thereby narrowing the extra-territorial application of the Proceeds of Crime Act 2002. Although highly significant for future extradition cases involving cross-border financial activity, the ruling sets no new criminal offence; its immediate effect is to terminate the Respondent’s extradition request.