Mandatory order to stop bribery investigation?

13 October 2016 by David Hart KC

R (o.t.a Soma Oil & Gas) v. Director of the Serious Fraud Office [2016] EWHC 2471 (Admin) 12 October 2016 – read judgment

Soma are investing heavily ($40m spent on seismic work) in looking at oil and gas extraction in Somalia, so it was a bit of a set-back, to say the least, when their “capacity-building” efforts – funding infrastructure in the relevant Ministry – were alleged to fall under the Bribery Act 2010, and this led to a fraud investigation by the UK SFO. The investigations, as investigations do, dragged on, and Soma brought these, somewhat ambitious, proceedings to get an order telling the SFO to stop them.

As you may have guessed, the claim failed, though, as we will see, it may have achieved rather different benefits.

The judgment of the Administrative Court is a concise account of when the private challenger can and cannot seek orders in respect of investigations and prosecutions – whether to stop or start them. Here Soma wanted to stop the investigation. In other circumstances, a victim may want the authorities to start an investigation or prosecution into another party: see, e.g. Chaudhry, decided earlier this week.

The SFO investigation started in June 2015. Soma (who suspect that commercial rivals may have stirred things up) cooperated throughout. The capacity-building money was spent on things like data rooms for the Ministry. Soma started chivvying the SFO for a conclusion to the investigation. However, by May 2016, the SFO was stating that there were “certain other matters” which they needed to investigate – those matters were and remain unidentified – and are referred in the judgment as “the other strands” investigation.

Soma then lost patience, and started these proceedings on 10 August, which came before the court on 17 August. Pretty good response by all concerned, for a season when many lawyers have sand on their feet.

The day before, on 16 August, the SFO wrote a crucial letter, giving an update on its investigation – a step it described as a unique exception (i.e. don’t expect everybody to get one). It acknowledged (a year in) that there was “currently insufficient evidence of criminality” in respect of the capacity-building payments. The “other strands” investigation was however to continue. It was not drawn in the letter, or indeed in court, on what these other strands were. The most that the SFO barrister said was that they involved “serious criminality” of particular sensitivity, and there was “sufficient” in the investigation to warrant continuing it.

At court on 17 August, Soma pressed on for a mandatory order in respect of both capacity-building and “other strands” investigations.

The law

There is rather more law on reviewing the decisions of prosecutors, rather than the antecedent investigation process. R (L) v Director of Public Prosecutions [2013] EWHC 1752 states that the grounds upon which challenge to a prosecutorial decision can be made are very narrow, namely:

(1) because there has been some unlawful policy;

(2) because the Director has failed to act in accordance with his own set policy; or

(3) because the decision was perverse; that is to say it is a decision that no reasonable prosecutor could have reached.

Such applications will succeed only in “very rare” cases,  in “exceptionally rare circumstances”, and this is for

the good and sound constitutional reason that decisions to prosecute are entrusted under our constitution to the prosecuting authorities

hence the very strict self-denying ordinance by the courts.

Unsurprisingly, it may be more difficult to challenge the decisions of investigators. This does not mean that in law one cannot mount such a challenge. But the cards are very much stacked against the challenger. Because such an investigation is essentially factual rather than legal, it may be carried out at different levels of intensity, and may be shelved only to be resuscitated when some new evidence arises. As Underhill J noted in C [2006] EWHC 2352 (Admin) (concerning a police investigation into a banker about child pornography web-sites), investigations

do not therefore necessarily have a defined conclusion. It would be highly undesirable to put the police in a position where they had to issue public declarations of innocence.

Our decision also touched on, but did not decide, the interesting question whether such an investigation engaged Soma’s rights under Art. 8 ECHR. The court assumed, for purposes of the argument, that the investigation engages Soma’s rights under Art. 8. It thus ducked the controversy between Lord Hoffmann’s views in R v G [2008] UKHL 37, at [10], that prosecutorial policy and sentencing do not engage Art. 8 and those of the Court of Appeal in SXH v Crown Prosecution Service [2014] EWCA Civ 90, at [71] and [79], that there will be circumstances when the decision to prosecute will engage Art. 8, even when the offence charged does not itself constitute interference with private life.

Note the latter, apparently strong, case, SXH, where a Somali asylum-seeker with false papers argued two potential interferences under Art.8. The first was that the criminalising section, when applied to an asylum seeker in her position was an interference with her private life. This was because she was fleeing from persecution (involving rape) in Somalia and was seeking asylum by the only practicable means available to her. Without false identification documents the appellant could not exercise her right, internationally recognised, to seek asylum. Accordingly, it was said that the decision to prosecute was an interference with her right to respect for her private life. Similarly, it was said the risk of the consequences of prosecution and conviction engaged Article 8.

Neither point persuaded the Court of Appeal in SXH, so it would appear that one would need extreme facts for Art.8 to be engaged by a prosecutorial decision of this sort.

The court in Soma went on to decide that, even if Art.8 was engaged, it would be very difficult to characterise an investigation as disproportionate under Art.8(2).

One other thing in the judgment; all us lawyers are used to the rather wordy and circular definition in the Wednesbury case of irrationality amounting to unlawfulness. Gross LJ quoted a rather more useful “working” definition from a leading textbook, De Smith’s Judicial Review …7^th ed.), at para. 11-036:

Although the terms irrationality and unreasonableness are these days often used interchangeably, irrationality is only one facet of unreasonableness. A decision is irrational….if it is lacking ostensible logic or comprehensible justification.

The outcome

The court dismissed the capacity-building challenge on the grounds that the SFO’s letter of 16 August had given Soma all the court could possibly have given it.

The “other strands” challenge really turned into a request for an order that the SFO disclose the nature of the inquiries it was pursuing. The court held that there is no basis whatever to go behind the SFO response and

compel further disclosure of a continuing investigation into serious crime, with sensitive international dimensions.

It denied that there was any common law right to compel further disclosure at this stage, potentially damaging to the investigation. The SFO had made the point that it was pursuing the investigation as expeditiously as it could, but that, unsurprisingly, this depended on getting responses from abroad.

The final string to Soma’s bow on the information side of things was the Directive 2012/13 on the rights to information in criminal proceedings. Art. 6.1 provides that Member States shall:

” …ensure that suspects …are provided with information about the criminal act they are suspected ….of having committed. That information shall be provided promptly and in such detail as is necessary to safeguard the fairness of the proceedings and the effective exercise of the rights of the defence.”

The court assumed (without deciding) that the Directive is capable of direct effect without it being transposed by the UK into domestic law. But it pointed out the terms of Recital (28) of the Directive, namely that information is to be provided “…without prejudicing the course of ongoing investigations”.

As Gross LJ put it

To me, that is an end of the matter so far as the Directive is concerned. In any event and even putting to one side the information already provided to Soma, Art. 6.1 says nothing about providing information to a suspect about investigative lines of inquiry; it would be very curious if it did.

Conclusion

So an ambitious claim failed.

But it is not difficult to conclude that Soma may have got something out of it for the costs it had to pay. It cannot be any coincidence that the commencement of proceedings extracted the confirmation (the day before the hearing) that the SFO was not pursuing the capacity-building side of the case. And the court specifically encouraged the SFO to conclude the other strands element as expeditiously as possible. In a case where delay costs money (huge money, because Soma may well be stymied in its Somali operations until it gets (if it gets) the all-clear), this is helpful, if only to keep this file at the top of the SFO’s in-tray.

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