On 27 January 2023, the Commercial Court (Cockerill J) in PJSC National Bank Trust & anor v Mints & ors <\/em><\/strong>[2023] EWHC 118 (Comm) ruled on a number of important issues relating to the effect of sanctions on the ability of a sanctioned person to pursue litigation before the English courts.<\/p>\n The litigation arises out of claims by the Claimant Banks for US$850m on the basis that certain of the Defendants conspired with representatives of the Claimant banks to enter into uncommercial transactions with companies connected to the relevant Defendants, whereby loans were replaced with worthless or near worthless bonds. In 2019, The Claimants had also obtained undertakings from some of the Defendants equivalent to freezing orders.<\/p>\n Shortly after Russia\u2019s invasion of Ukraine, the Second Claimant, Bank Otkritie, was put on the sanctioned list by the UK Government and thus became a \u2018designated person\u2019. The sanctions regime arises out of the Sanctions and Money Laundering Act 2018 and regulations made under it (with respect to Russia, these are the Russia (Sanctions) (EU Exit) Regulations 2019 (the \u2018Regulations\u2019)).<\/p>\n The sanctions regime operates in two main ways: (1) all funds or economic resources of a designated person are frozen, such that a person may not deal with them and (2) no person may make funds or economic resources available to or for the benefit of any designated person. Doing so is a criminal offence. The regime also applies to entities which are \u2018owned or controlled<\/em>\u2019 directly or indirectly by a designated person. HM Treasury, acting through the Office for Sanctions Implementation (\u2018OFSI\u2019) has a discretion to license certain specified activities which would otherwise contravene the Regulations.<\/p>\n The First to Fourth Defendants (\u2018D1-D4\u2019) brought applications seeking a stay of the proceedings and a release from the undertakings they gave to the Court on the basis that the effect of the Regulations was that:<\/p>\n D1-D4 also argued that although the First Claimant had not been listed as a designated person, it was in fact \u2018owned or controlled\u2019 <\/em>by at least two designated persons, Mr Vladimir Putin, the President of the Russian Federation and Ms Elvira Nabiullina, the Governor of the Russian Central Bank, such that the sanctions regime applied to both Claimants.<\/p>\n The Court dismissed the applications and held that:<\/p>\n In light of the important issues raised, the Commercial Court granted permission to appeal. The judgment is available here<\/a>.<\/p>\n Nathan Pillow KC<\/a>, David Davies KC<\/a> and Bibek Mukherjee<\/a> appeared on behalf of the Claimants, instructed by Neil Dooley of Steptoe & Johnson LLP.<\/p>\n<\/p><\/div>\n\n
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