Dispute Resolution

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New legislation introduces further sanctions powers and aims to tackle financial crime by revealing identities of overseas beneficial owners of UK property.

By Stuart Alford QC, Robert Price, Thomas Lane, and Harriet Slater

Following the UK government’s successive sanctions packages, which are the subject of recent Latham & Watkins Client Alerts,[1] the response to Russia’s invasion of Ukraine has been extended to cover wider financial crime measures.

The Economic Crime (Transparency and Enforcement) Act 2022 (Act) received royal assent on 15 March 2022, introducing a new register of overseas entities (Register) holding UK property assets, alongside changes to the unexplained wealth order (UWO) and sanctions regimes. Reforms to the role of Companies House are expected to follow in subsequent legislation.

The decision exposes media outlets in the UK to liability if they identify suspects prior to charge, but carries lesser implications elsewhere.

By Stuart Alford QC, James Lloyd, Harriet Slater, and Georgie Blears

On 16 February 2022, the UK Supreme Court held that a suspect under criminal investigation has, prior to being charged, a reasonable expectation of privacy in respect of information relating to that investigation.

The decision has important implications on the extent to which the UK media can report on criminal investigations into individuals prior to the point of charge. Nevertheless, the often international nature of criminal investigations means that the practical impact of this decision may be more limited in situations in which information may still be published in other jurisdictions.

The Court of Appeal ruled that losing proprietary rights under foreign law could invalidate personal claims against third party recipients of trust assets.

By Daniel Smith and Anna James

On 27 January 2022, the UK Court of Appeal unanimously dismissed an appeal brought by Saad Investments Company Limited (SICL) and its liquidators[1]. The court refused to overturn a lower court’s decision in January 2021 to dismiss SICL’s long-running claim that Saudi National Bank (SNB, formerly, Samba Financial Group) was liable in “knowing receipt” of trust property in September 2009, namely shares in five Saudi Arabian banks. By the time of the judgment the shares had a market value in excess of £320 million.

In dismissing the appeal, the court clarified important issues relating to the relevance of equitable proprietary interests in trust assets, how those interests depend on a careful analysis of the law where the assets are located (in this case, Saudi Arabian law), and how the appellate courts should treat a trial judge’s assessment of expert evidence on foreign law.

The decision is of significant interest to anyone dealing with assets subject to English law trusts, where those assets are located outside the UK, particularly in countries with markedly different legal systems and/or where title is determined by registration.

The decision clarifies the role of the English courts and the UK executive branch in the recognition of foreign heads of state and the ability of English courts to adjudicate the lawfulness of executive and legislative acts of foreign states.

By Charles Claypoole, Isuru Devendra and Michelle Taylor

The UK Supreme Court (UKSC) recently issued its judgment in “Maduro Board” of the Central Bank of Venezuela v “Guaidó Board” of the Central Bank of Venezuela.[1] The case concerns who controls Venezuela’s gold reserves of approximately US$1.95 billion held by the Bank of England, and proceeds of a gold swap contract of approximately US$120 million held by court-appointed receivers in England: the board of the Central Bank of Venezuela (the BCV) appointed by Nicolás Maduro, who claims to be the President of Venezuela (the Maduro Board); or the BCV board appointed by Juan Guaidó, who claims to be the interim President of Venezuela following his appointment by the National Assembly of Venezuela (the Guaidó Board)?

The judgment clarifies the Court’s approach to proposed transfers under Part VII of FSMA, as well as the scope and application of s. 110(1)(b). 

On 24 November 2021, the High Court of England and Wales (the Court) sanctioned a £10.1 billion annuity book transfer from The Prudential Assurance Company Limited (PAC) to Rothesay Life Plc (Rothesay) under Part VII of the Financial Services and Markets Act 2000 (FSMA).

The Court previously declined to sanction the transfer following an initial sanction hearing in July 2019. The Court of Appeal then overturned that decision in December 2020 after an appeal by PAC and Rothesay, and the transfer was remitted to the Court for a further sanction hearing between 8-10 November 2021 before the honourable Mr Justice Trower (the Remitted Sanction Hearing). The Court’s judgment following the Remitted Sanction Hearing was handed down on 24 November 2021 (the Judgment), and provides useful guidance on certain aspects of the Part VII process.

UK companies should be aware of the increasing focus on corporate culture by regulators on both sides of the Atlantic.

By Nathan H. Seltzer, David Berman, Stuart Alford QC, Christopher M. Ting, and Nell Perks

In a recent speech that has garnered significant attention, US Deputy Attorney General Lisa Monaco highlighted several important changes in how the US Department of Justice (DOJ) will pursue corporate crime during the Biden Administration. (Read Latham’s in-depth Client Alert analysing the speech and its potential impact, and Latham’s blog post highlighting matters of particular relevance to UK PLCs.)

This post highlights the DOJ’s particular emphasis on the importance of “corporate culture”.

The priorities will impact non-US companies who may face a US DOJ with a renewed emphasis on combating corporate crime.

By Stuart Alford QC, Nathan H. Seltzer, and Christopher M. Ting

In a recent speech that has garnered significant attention, the Deputy Attorney General of the United States, Lisa Monaco, highlighted several important changes regarding how the US Department of Justice (DOJ) will pursue corporate crime during the Biden Administration. Latham’s in-depth analysis of the speech and its potential impact can be found here.

In addition to reinforcing prior statements that the Biden Administration will prioritise the prosecution of corporate and white collar crime, the speech touched on several areas that may be of particular relevance to UK and other non-US companies. This blog post highlights some of those areas.

Recent developments at the CJEU give some shape to the practical implications of Article 17 of the Copyright Directive.

By Jean-Luc Juhan, Susan Kempe-Mueller, Deborah Kirk, Elva Cullen, Alex Park, Pia Sophie Sösemann, Victoria Wan, and Amy Smyth

7 June 2021 was the implementation deadline for the Copyright in the Digital Single Market Directive (EU) 2019/790 (the Copyright Directive), yet just four EU Member States (including Germany and the Netherlands) have fully transposed the Copyright Directive, whilst four others (including France and Denmark) have transposed only parts of the Copyright Directive. The delay in implementation is perhaps unsurprising given the controversial nature of certain of the Copyright Directive’s provisions, in particular Article 17.

Recent developments have started to add colour to how Article 17 may work in practice, and how it might align with the broader regulation of platform liability for infringing content. This blog post will discuss these developments and analyse the implications for platforms and rights holders.

By Tom Evans, David Walker, Daniel Smith, Aisling Billington, and Catherine Campbell

The location of the data is not sufficient to avoid a disclosure order.

When it comes to personal devices, people increasingly communicate across multiple platforms, often in an informal and unguarded manner. However, high levels of litigation driven by the COVID-19 pandemic (including insolvency and restructuring litigation), the recent M&A boom (including shareholder disputes and other transactional litigation), and the rise of remote/hybrid work mean that PE firms must remain alert to the risk of personal device communications being disclosed in litigation.

As seen in recent cases, the English courts place value in contemporaneous written evidence, and take a pragmatic and targeted approach to disclosure. While English courts are mindful of the privacy rights of individuals, they recognise that employees conduct work on personal devices and non-proprietary third-party apps.

However, the location of the data is not sufficient to avoid a disclosure order, and PE firms should consider how to best protect themselves.

Importantly for commercial parties, the decision indicates that parties are assumed to be aware of this approach.

By Daniel Smith and Rebecca Angelini

Liquidated damages clauses provide pre-agreed remedies for contracting parties in the event of particular breaches of contract. This allows the innocent party to avoid the time and effort of quantifying its loss, and provides the parties with commercial certainty in respect of the remedies available for a particular breach. On 16 July 2021, in Triple Point Technology, Inc v. PTT Public Company Ltd,[1] the UK Supreme Court overturned a Court of Appeal decision and affirmed several important principles in relation to liquidated damages:

  • Liquidated damages cease to accrue upon termination of a contract, but rights accrued as at the date of termination survive.
  • Following termination of a contract containing a liquidated damages clause, the contracting parties must seek damages for breach of contract under the general principles of English law.
  • Contracting parties do not have to include provisions concerning the effect of termination on the accrual of liquidated damages. Instead, they can reason that such consequences are assumed.