Supreme Court quashes asset-freezing orders

27 January 2010

The Supreme Court has quashed asset-freezing orders imposed by the Treasury on five suspected terrorists.

The orders were made by Gordon Brown as chancellor in 2006, following UN Security Council resolutions which required member states to freeze the assets of those involved in international terrorism, including Bin-Laden and the Taleban.

The Terrorism Order (United Nations Measures) Order 2006 (the TO) allowed for asset-freezing based on a “reasonable suspicion”.

The Al Quaeda and Taleban (United Nations Measures) Order 2006 (the AQO) provided for the automatic freezing of the UK assets of anyone on the UN list, with no right to challenge the listing.

Giving the leading judgment in HM Treasury v Ahmed and others, HM Treasury v al-Ghabra and R (on the application of Youssef) v HM Treasury [2010] UKSC 2, Lord Hope said the systems created by the order lay “wholly outside the scope of parliamentary scrutiny”.

He went on: “This raises fundamental questions about the relationship between Parliament and the executive and about judicial control over the power of the executive.”

Lord Hope said that “even in the face of the threat of international terrorism, the safety of the people is not the supreme law. We must be just as careful to guard against unrestrained encroachments on personal liberty.”

He quashed the TO on the grounds that it was ultra vires and allowed the appeal against the AQO on the grounds that part of it was ultra vires.

Lord Walker and Lady Hale agreed with Lord Hope. Lord Rodger, Lord Phillips and Lord Mance also agreed, for different reasons. Lord Brown dissented.

In a separate judgment, handed down at the same time, the Supreme Court lifted anonymity orders covering the five men.

Eric Metcalfe, director of human rights policy at JUSTICE, welcomed the judgment as an important victory for the rule of law.

“For several years, the government has been using the cover of UN Security Council resolutions to grant itself the power to freeze assets on the basis of suspicion and secret evidence,” he said.

“It is right that the government takes action to prevent the financing of terrorism. But it was wrong for the Treasury to do so by side-stepping Parliament and violating basic rights.”