R (on the application of KBR Inc) v Director of the Serious Fraud Office

Queen's Bench Division (Administrative Court), [2018] EWHC 2368 (Admin), Lord Justice Gross, and Mr Justice Ouseley, 17 April; 6 September 2018

Judicial review - Serious Fraud Office - Powers of the Director - Criminal Justice Act 1987 - Section 2 notices - Material held outside the jurisdiction - Power to compel provision - Mutual legal assistance.

K Inc was a global company operating through a number of subsidiaries including K Ltd, a UK company. K Inc had no presence or business activity in the UK. A corruption inquiry was launched by the SFO into alleged activities of K Ltd with respect to an agent retained to provide services from 1996 onwards with respect to the extractive industries in the Caspian region. Payments totalling over US$23 million were made by K Inc's UK subsidiaries, including K Ltd. From at least 2005 onwards those payments were processed by K Inc's central treasury function located in the United States. For some of the relevant period K Inc's then President, Oil and Gas was based in the group's office in Leatherhead. The SFO alleged that from 2010 onwards the payments required the approval of K Inc's compliance function, located primarily in the United States. Investigations were being conducted into allegations against K Inc in the United States by the Department of Justice and the Securities and Exchange Commission. K Ltd provided documents pursuant to a notice issued under section 2 Criminal Justice Act 1987 and K Inc provided documents on a voluntary basis. The SFO was not satisfied with the extent of the voluntary disclosure being made by K Inc. At a meeting between the SFO and representatives of K Ltd and K Inc held in London, the SFO handed a section 2 notice to K Inc's General Counsel directing her to produce 21 categories of documents to the SFO on K Inc's behalf. K Inc sought judicial review of the section 2 notice addressed to its general counsel on three grounds: (i) the notice was ultra vires the CJA 1987 as it requested material held outside the jurisdiction by a US company; (ii) The SFO was wrong in law to exercise its powers under section 2 CJA rather than seek Mutual Legal Assistance from the authorities in the United States; and (iii) the notice was not effectively "served" on K Inc by being handed to its General Counsel while she was temporarily present in the jurisdiction. The SFO contended that all three grounds of challenge were wrong as a matter of law.