Just a week ago, the UK Supreme Court delivered a judgment that will have a far-reaching impact on proportionality and judicial deference - Shvidler v. Secretary of State, (2025).

The UK enacted the Sanctions and Anti Money Laundering Act, 2018 (SAMLA), which confers extensive powers on ministers to make regulations that allow imposing of stringent restrictions on individuals and business. It is not necessary that these persons should have actually committed a criminal offence or were engaged in wrongdoing either in the UK or overseas. The Regulations empower the ministers to designate a person on whom sanctions can be imposed, if that person is involved in activities that destabilise or threaten the integrity and independence of Ukraine, or support the Government of Russia.

Without going into details of these Regulations, they apply not only to a person who is directly involved in these activities, but also to persons who are acting on behalf of the involved persons or are associated with the persons who were so involved.

In pursuance of these provisions, a luxury yacht belonging to Dalston Projects was detained in London on the ground that the ultimate owner of the company was a Russian billionaire who was reported to have close connections with the Russian government. His wealth indicated that he was involved in significant economic activities in Russia which could be beneficial to the regime. Ultimately, this detention was upheld right up to the Supreme Court.

The second person on whom sanction was imposed was Shvidler, who left Russia as a refugee in 1998 and went to the US. In Russia, he had a Master’s degree in applied mathematics and later obtained further postgraduate qualifications in the US. From 2010, he has been a British citizen and had five children. The facts showed that he had earned substantial income in the UK and held properties in London and other countries. The allegations against Shvidler was that he was a friend and business associate of the Russian billionaire Roman Abramovich and was the head of one of his companies. After Abramovich was designated as an “involved person” and subject to sanctions, Shvidler was also designated and all his assets were frozen. As a result of these sanctions, his bank accounts were frozen, his children were excluded from schools with immediate effect in the middle of the year and were then compelled to continue their education in the US, where Shvidler is now living.

The sanctions against Shvidler were upheld by the single judge, the Court of Appeal and by the UK Supreme Court (4:1). The majority judgment has discussed in detail the law relating to proportionality and judicial deference. It also discussed the standard of judicial review before the court of first instance and before the appellate courts. The majority held that the freezing of all the assets of Shvidler was a proportionate measure by the Foreign Secretary and was lawfully issued. 

The importance of this judgment lies in the powerful dissent of Lord George Leggatt. While agreeing with the detention of the yacht of Dalston Projects, he disagreed with the majority as regards the sanctions against Shvidler. 

Several of his observations are extremely important. He pointed out that imposing these sanctions on an individual who had done nothing unlawful and by mere association, was a serious invasion of liberty and violation of fundamental rights.

First, he based his decision on the principles of separation of powers and pointed out that courts should scrutinise such action and not merely accept the decision of the executive on the ground that there was a public policy or larger public interest involved. He pointed out that courts would fail in their duty if they simply rubber stamp assertions made by the executive without subjecting them to critical scrutiny. He pointed out that Shvidler did not live in Russia and that there was no evidence to show that he had either economic or political connections in that country. The fact that he was associated with Abramovich did not justify such drastic sanction.

Lord Leggatt also reiterated the four principles of proportionality which include:

(i) Sufficiently important objective to justify limiting fundamental rights;

(ii) Rational connection to the objective;

(iii) Whether a less intrusive measure was possible; and

(iv) Whether a fair balance had been struck between the rights of the individual and the interests of the community. 

The first three criteria were designed to screen out measures which did not meet the minimum standard of rational justification. According to Lord Leggatt, the fourth criterion was extremely important. He criticised the view that public interest outweighed the rights of the individual. He pointed out that it is not proper to treat “fair balance” with a set of scales, which weighed expected benefit to the community against the wrong done to an individual. Most importantly, he pointed out that it was wrong to hold that the greater the public benefit, the greater the wrong that may be justifiably done to individual rights.

Emphasising the importance of judicial review, he held that it was the duty of the courts to decide, in individual cases, whether community interest should prevail over fundamental rights or the freedom of an individual and then set out four reasons for doing so which merit careful consideration.

Finally, he held that the sanctions had a devastating effect on Shvidler and his family and deprived him, indefinitely, of access to his own funds and other resources on a world-wide basis, except to such minimal extent as the government may allow. His association with Abramovich had been lawful and did not violate any statutory provision. The courts should be slow to punish an innocent individual on the ground that it is a legitimate aim to pursue public policy. A drastic curtailment of his liberty could not be justified on the facts; the restrictions were unjustified and disproportionate and were liable to be declared as unlawful.

Sadly, Lord Leggatt's is the dissenting opinion in the judgment, but it underscored the fatal mistake of accepting public interest as a ground to trample over fundamental rights. Far too often, anti-terrorist laws and other provisions are treated as a justifiable basis for indefinite incarceration and denial of personal liberty. It is hoped that the judgment of Lord Leggatt receives serious consideration by our High Courts and the Supreme Court.

Arvind P Datar is a Senior Advocate.

The author thanks Advocate M Jannani for their assistance.