CANDEY achieves success in first Judicial Review brought against OFSI for unreasonable sanctions delay

In the first court action against the Office for Financial Sanctions Implementation (OFSI) related to the UK’s sanctions regime on Russia, on 12 July 2022 CANDEY filed a Judicial Review application arguing that OFSI had unreasonably delayed a decision on our client’s license application. 

The client, a German nanotechnology company owned by companies in Asia and Russia, made advance payments to its UK supplier for patented components it required to manufacture its products. Following the outbreak of war in Ukraine, the supplier withheld supply pending a licence decision from OFSI because of concerns regarding the identity of persons and companies connected with the client. While CANDEY’s position was that a license was not required, the client nevertheless sought a license from OFSI in April 2022 in order to maintain its critical supply. Despite lengthy correspondence and numerous requests for further information, OFSI delayed making a decision to the point at which it threatened the survival of the company. 

The CANDEY team, led by partners Josh Ray and Richard Singleton, issued a claim for Judicial Review on 12 July 2022 together with an application for the claim to be given urgent consideration at an expedited trial. At a hearing before the Hon Mr Justice Swift in the Administrative Court on 15 July 2022, the Judge agreed that the client had passed the threshold test for a speedy trial, gave directions for the exchange of evidence and legal arguments within 7 days, and ordered a trial to determine the substantive Judicial Review claim to take place during the week commencing 25 July 2022. 

The following working day, on 18 July 2022, OFSI made its licensing decision. It determined that the client did not in fact require a licence because the company was not owned or controlled by a “Designated Person” (as defined in the Regulations) and was not therefore subject to sanctions, a fact the client and CANDEY had repeatedly asserted in its licence application and in correspondence. OFSI’s decision enables the client to continue trading, and the parties have now agreed terms for the disposal of the proceedings.

CANDEY Partner, Joshua Ray, commented: “While we of course appreciate the extraordinary demands the new Russian sanctions have placed on OFSI staff, the delay in this case was unreasonable given our detailed factual submissions. Because our client was facing insolvency without OFSI action, we were compelled to seek Judicial Review. Fortunately, Mr Justice Swift’s Order motivated OFSI to promptly issue the decision we had long been asking for.”