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Dana Astra Iooo v Secretary of State for Foreign, Commonwealth And Development Affairs
Factual and Procedural Background
The Appellant is a company registered in The State. It was designated under the domestic sanctions regime and challenged that designation under section 38 of the Sanctions and Anti‑Money Laundering Act 2018. The designation (first made on 31 December 2020) froze any assets the Appellant might have in the United Kingdom and was varied following an administrative review in March–August 2022–2023. The Appellant’s challenge in the Administrative Court was dismissed by Judge Saini. The Appellant appealed to the Court of Appeal with permission and advanced three grounds: (1) that the designation brought the Appellant within the United Kingdom’s jurisdiction for the purposes of Article 1 ECHR (including an argument about protection of “goodwill”); (2) that the designation was disproportionate under Article 1 Protocol 1 and domestic proportionality principles; and (3) that the decision to maintain designation was irrational on conventional public law grounds. The Appellant had earlier entered a multi‑year sponsorship agreement with Organization A which it terminated in January 2021; it is also a major developer of a large project in The City. Officials conducted an extensive administrative review of voluminous material before the Respondent decided to maintain/ vary the designation. The Court of Appeal dismissed the appeal.
Legal Issues Presented
- Whether the Appellant was "within the jurisdiction" of the United Kingdom for Article 1 ECHR purposes (including whether claimed "goodwill" in the UK counts as a possession under A1P1).
- Whether the designation was proportionate under the four‑part Bank Mellat proportionality test (including rational connection, less intrusive alternatives and fair balance).
- Whether the Respondent's decision to designate and to maintain designation was irrational/unreasonable on conventional public law grounds.
Arguments of the Parties
Appellant's Arguments
- The designation engaged Article 1 ECHR because targeted sanctions that affect a foreign company’s ability to do business (including its alleged future or potential goodwill in the UK) bring it within UK jurisdiction.
- The Appellant’s claimed goodwill (a marketable bundle of business interests) and inability to pay UK legal advisers without a licence engaged A1P1 rights and made the measure disproportionate.
- The Swiss cases (Nada; Al Dulimi) support treating implementation of sanctions as an exercise of jurisdiction or otherwise support the Appellant’s ECHR claim.
- The administrative decision to maintain designation was irrational/unreasonable because the Appellant had sought to distance itself from Organization A, was subject to severe measures in The State, and the Respondent failed to give sufficient weight to those facts.
Appellee's Arguments
- The Appellant is not within the United Kingdom’s jurisdiction for Article 1 ECHR purposes: jurisdiction is primarily territorial and the authorities cited do not establish an extra‑territorial exception for sanctions affecting persons abroad who have no assets or business presence in the UK.
- The Swiss cases concern attribution to the implementing state of UN measures and do not establish extra‑territorial jurisdiction for sanctions; they do not assist the Appellant on jurisdiction.
- The designation met the Bank Mellat proportionality test: legitimate aims were identified, there was a rational connection (including signalling effects), less intrusive alternatives had been considered, and the impact did not outweigh the public interest.
- The administrative process was rigorous; the threshold for designation is "reasonable grounds to suspect" and the Respondent properly exercised the discretion and provided a brief statement of reasons as required by the statutory scheme.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| MN v Belgium (GC) App No 3599/18, 5 May 2020 ('MN') | Territorial primacy of Article 1 ECHR jurisdiction; exceptional extra‑territorial jurisdiction requires special justification; focus on control over person/area. | Used to confirm that jurisdiction is primarily territorial and that decisions within the state that affect persons abroad do not, without exceptional circumstances, bring them within jurisdiction. |
| Bancovic v United Kingdom (GC) App No 52207/99 ('Bancovic') | Need for special justification for exceptional extra‑territorial jurisdiction. | Cited as authority that exceptional exercises of jurisdiction require special justification; supported rejection of an extra‑territorial expansion. |
| Al‑Skeini v United Kingdom (GC) App No 55721/07, 7 July 2011 ('Al‑Skeini') | Categories of exceptional jurisdiction and emphasis on effective authority or control over persons/area. | Relied on to identify established categories of extra‑territorial jurisdiction and to reject creation of a new exception for sanctions. |
| Agostinho v Portugal App No 39371/20, (April 2024) ('Agostinho') | Grand Chamber declined to expand extra‑territorial jurisdiction; Article 1 requires control over the person rather than the person's interests. | Applied to reject the Appellant's submission that effects on interests (goodwill) suffice to establish jurisdiction. |
| Nada v Switzerland Ap No 10594/08, 13 September 2012 ('Nada') | Issues of attribution of UN‑derived measures to implementing states; measures implemented nationally can be attributable to the state. | Accepted as authority about attribution (not as authority for extra‑territorial jurisdiction); court held Nada does not establish a general extra‑territorial jurisdiction rule for sanctions. |
| Al Dulimi v Switzerland (App No 5809/08, 21 June 2016) ('Al Dulimi') | Followed Nada on attribution; concerned seizure of property within state territory. | Noted that Al Dulimi takes attribution points no further for Appellant's case and is distinguishable because it concerned property within the state's territory. |
| Breyer v Department of Energy and Climate Change [2015] EWCA Civ 408; [2015] 1 WLR 4559 ('Breyer') | Goodwill can be a "possession" for A1P1 but is limited to existing, marketable goodwill (past work/reputation), not mere future expectations. | Used to show that the Appellant had not established existing, capitalisable goodwill within the UK and so A1P1 protection did not apply on that basis. |
| Anheuser‑Busch Inc v Portugal App 73049/01, 11 January 2007 | A1P1 applies only to existing possessions; future income is not protected unless already earned or definitely payable. | Applied to reject Appellant's claim that future business prospects or potential future goodwill were possessions protected by A1P1. |
| Bank Mellat v HM Treasury [2013] UKSC 39; [2014] AC 700 ('Bank Mellat') | Four‑stage proportionality test for interference with rights. | The court applied the Bank Mellat test (importance of aim; rational connection; less intrusive alternatives; balancing effects) and upheld the Judge's application of that test. |
| Dalston Projects Limited v Secretary of State for Transport; Shvidler v Secretary of State for Foreign, Commonwealth and Development Affairs [2024] EWCA Civ 172 ('Shvidler') | Recent authority on proportionality in sanctions context; subject to later Supreme Court consideration. | The Judge followed the approach in Shvidler; the Court of Appeal relied on Shvidler and the subsequent Supreme Court decision in assessing proportionality and deference. |
| R (Al Rawi) v Secretary of State for Foreign and Commonwealth Affairs [2006] EWCA Civ 1279; [2008] QB 289 | Courts should give an especially broad margin of discretion to the executive in foreign policy matters. | Cited to justify deference to executive foreign‑policy judgements in the proportionality and rationality assessment. |
| R (Lord Carlile) v Secretary of State for the Home Department [2014] UKSC 60; [2015] AC 945 | Executive assessments or predictions in foreign policy may be difficult to test empirically; courts review rationality, not correctness. | Used to support the view that predictive foreign‑policy judgments warrant deference in assessing rational connection and proportionality. |
| Bosphorus Hava Yollari Turizm ve Ticaret Anonim Sirketi v Ireland (App No 45036/98) (2006) 42 EHRR 1 ('Bosphorus') | Where domestic implementation of supranational obligations provides equivalent rights protection, a presumption of Convention compliance may arise. | Explained as a reason why Strasbourg has rarely decided sanctions cases; distinguished as not applying where the implementing state is not within the relevant supranational scheme. |
| R (AB) v Secretary of State for Justice [2022] AC 487 | Courts should not extend domestic doctrine beyond what the Grand Chamber of the ECtHR has established. | Cited to support restraint: this court should not create a new extra‑territorial jurisdiction exception beyond Grand Chamber authority. |
Court's Reasoning and Analysis
The Court proceeded in logical order: jurisdiction (Article 1 ECHR), proportionality (Bank Mellat), and common‑law irrationality.
Jurisdiction: the Court accepted the settled Grand Chamber approach that jurisdiction is primarily territorial and that extra‑territorial jurisdiction arises only in limited, clearly articulated exceptional categories requiring special justification. The Court held that the Appellant, a company with no presence, business or assets in the United Kingdom, was not within UK jurisdiction for Article 1 purposes. The Court treated the Swiss decisions (Nada; Al Dulimi) as authority about attribution of UN‑derived measures to implementing states, not as authority for a broad extra‑territorial jurisdiction rule; they did not assist the Appellant. The Court rejected the argument that effects on a company's interests or prospective goodwill suffice to establish jurisdiction, relying on MN and Agostinho (control over the person, not over interests, is required).
Goodwill: the Court applied Breyer and Anheuser‑Busch to hold that A1P1 protects existing, marketable goodwill (the capitalisable product of past reputation), not mere future business prospects; the Appellant had no such existing goodwill in the UK and the goodwill argument therefore failed.
Proportionality: the Court applied the four‑stage Bank Mellat test, accepting that the designation pursued legitimate aims. The Court found a rational connection between designation and those aims (including signalling and deterrence), considered less intrusive measures and accepted the executive’s margin of appreciation in foreign policy matters. The Court concluded the interference did not outweigh the public interest and that the Judge’s proportionality assessment was correct and within the available evaluative judgment.
Rationality (common law): the Court analysed the scope of the Secretary of State’s discretion under the statutory scheme (low threshold: "reasonable grounds to suspect") and noted the nature of available material and the constrained form of the duty to give brief reasons. It held that the Appellant's public‑law irrationality challenge was largely parasitic on the proportionality complaint, was presented narrowly in the proceedings below, and in any event failed: the threshold for an irrationality (Wednesbury) challenge was not met, and the decision to designate/maintain designation was supported by rational reasons and adequate process.
Holding and Implications
DISMISSED
Holding: The Court dismissed the appeal and upheld the Administrative Court judgment dismissing the Appellant's challenge to its designation.
Implications: The direct consequence is that the Appellant's designation under the sanctions regime remains lawful and maintained. The Court reaffirmed the established territorial approach to Article 1 ECHR jurisdiction and declined to create a new extra‑territorial jurisdictional exception for sanctions affecting persons without UK presence or assets. No novel precedent expanding extra‑territorial jurisdiction was created; the Judge’s conclusions on jurisdiction, proportionality and rationality were upheld.
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