A high court judge has confirmed that the SFO can compel foreign companies to hand over documents held overseas as long as a “sufficient connection” between the company and the UK exists.
In a ruling on 6 September, Lord Justice Peter Gross and Mr Justice Duncan Ouseley at the High Court of England and Wales dismissed a judicial review claim brought by KBR Inc against the UK Serious Fraud Office (SFO). Writing for the court, Lord Justice Gross said the US engineering company’s claims were “misconceived and totally without merit”.
KBR Inc challenged the serving of the section 2 notice on three grounds. KBR Inc said the SFO went beyond its legal authority by serving the notice for material held outside the UK jurisdiction from a company incorporated in the US. The company also claimed that the SFO’s then director, David Green, had made an error in law by using his section 2 powers under the CJA instead of requesting the documents through an mutual legal assistance (MLAT) request. Lastly, KBR Inc claimed that the notice was not effectively “served” because it was handed to Elisa Akerson, a senior officer of the US company, who was only temporarily in the UK. The judges dismissed all three claims.
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Andrew Smith, at Corker Binning in London, was skeptical of whether the decision would affect the stance of corporate suspects seeking leniency from the SFO, but said: “It [the judgment] will prevent less cooperative companies from advancing overly technical arguments that overseas documents should not be provided.”
Andrew added:
“The decision may well seem surprising to criminal lawyers who were brought up to believe that criminal jurisdiction is strictly territorial and that clear wording is needed to displace the presumption against extraterritoriality.
“The court’s reasoning was grounded in the belief that both technological developments and the public interest in investigating serious fraud and corruption justified an extraterritorial interpretation of the SFO’s document-gathering powers. It is an example of how the common law can interpret old statutes to fit contemporary contexts.
“The decision may also mean that the Government now has less impetus to introduce the Overseas Production Order – which would have compelled overseas companies to produce electronic data – and which is currently making its way through Parliament.”
Read the full article in GIR here, behind a paywall.