No interest here: High Court refuses to extend extraterritorial scope of the European Convention on Human Rights

In Dana Astra IOOO v Secretary of State for Foreign, Commonwealth and Development Affairs [2025] EWHC 289 (Admin), the High Court found that the Secretary of State's decision to "designate" Dana Astra IOOO ("Dana") as an entity subject to sanctions (including an asset freeze) did not engage the protection of the European Convention on Human Rights ("ECHR"), and that the designation was proportionate and rational in any event.

Novel arguments that sought to expand the scope of the ECHR's extraterritorial jurisdiction were uniformly dismissed, as the High Court remained in lockstep with the European Court of Human Rights' ("ECtHR") extensive and strictly defined case law.

Key Points

• State parties to the ECHR making decisions which may affect a person or entity situated abroad, or may affect their "interests" abroad, is not sufficient to bring that person or entity within the scope of Article 1 of the ECHR. The High Court took the view that there is nothing special about the context of sanctions which justifies departing from established ECtHR case law, which defines Article 1 narrowly.
• A business' goodwill may be protected under Article 1 of Protocol 1 ("A1P1") of the ECHR but will be limited to the marketable and presently capitalisable product of a business' past work and reputation, as opposed to expectations of future profits.
• A mere concern for reputation which is untethered to an underlying business interest is not a "possession" protected by A1P1.

Background

The Secretary of State for Foreign, Commonwealth and Development Affairs (the "SoS") designated Dana – a major real estate and construction company operating in Belarus– as an entity subject to sanctions, via Regulations made under the Sanctions and Anti-Money Laundering Act 2018 ("SAMLA"). This designation has the effect of freezing any assets Dana may have had in the UK and restricting the provision of funds within the UK to Dana. As it was, Dana was not domiciled in the UK, nor did it have any property, assets, or commercial interests in the jurisdiction.

Nevertheless, Dana challenged the designation under section 38 of SAMLA, which allows for court review of certain designation decisions using the principles applicable in judicial review. Dana argued its designation was unlawful on two grounds:

1. the designation was an exercise of the UK's jurisdiction under Article 1 ECHR and constituted a disproportionate interference with Dana's A1P1 rights, and
2. it was irrational on conventional public law principles for the SoS to maintain the designation. 

Judgment

The arguments made by Dana in support of Ground 1 are of particular interest, as they represent novel attempts to test the boundaries of the ECtHR's restrictive approach to jurisdiction.

Article 1 ECHR – Jurisdiction and Extraterritoriality

Article 1 of the ECHR requires its state parties to "secure to everyone within their jurisdiction the rights and freedoms" of the Convention (emphasis added). As such, the concept of "jurisdiction" is a "threshold condition" for a state to be held liable for any violation of the ECHR.

According to the case law of the ECtHR, a state's jurisdictional competence is "primarily territorial" and acts of states performed or producing effects outside their territories can constitute an exercise of jurisdiction only in exceptional circumstances. Exceptional circumstances has been interpreted narrowly, historically only covering situations where a state has by its "own positive action asserted control over persons or a whole area outside its territory". Three main exceptions to the extraterritoriality principle have been recognised by the ECtHR:

1. effective control over an area (eg through a State's armed forces)
2. the exercise of public powers such as in respect of the maintenance of security, and
3. various situations characterised by control over the person, where there is state agent authority and control is exercised eg by use of force.  

In the present case, Dana sought to bring its designation within the scope of Article 1 by relying on two decisions by the ECtHR in the sanctions context, effectively arguing that a new exception to the extraterritoriality principle had been created. The court dismissed the reliance on these cases, with one concerning the deprivation of assets within a contracting state's jurisdiction and the other being confined to its specific facts and issues, particularly since extraterritoriality was not argued in the latter case, meaning it would be surprising if it had silently created a new exception to the established law set out above.   

Saini J considered the fact that the ECtHR has recently rejected arguments to tailor the exterritoriality principle to reflect the "special features" of climate change (Agostinho v Portugal and others [GC], App No. 39371/20, 9 April 2024), in keeping with its position in immigration cases (MN and Others v Belgium [GC], Application No. 3599/18, 5 May 2020), significant. These cases confirm that Article 1 “requires control over the person himself or herself rather than the person’s interests as such", and having a significant impact on a person or entity's situation is not a sufficient basis for establishing a state's exercise of jurisdiction. There was said to be nothing unique about sanctions that would justify creating a new exception.

Therefore, Saini J dismissed Dana's challenge on the basis that jurisdiction under Article 1 ECHR cannot be established solely by a state taking a decision capable of affecting a person situated abroad, or because that decision affected that person's interests abroad, emphasising that "to decide the contrary would amount to an unprincipled mass extension of the scope of the ECHR".

Article 1 of Protocol 1 ECHR – Meaning of Possessions

Dana conceded that it had no property or assets within the UK, which are usually the "possessions" protected by A1P1. Nevertheless, it submitted that A1P1 was still engaged because the designation interfered with Dana's peaceful enjoyment of its goodwill in the UK and deprived it of "the ability to conduct business in the UK now and in the future". Dana defined goodwill for these purposes as the "benefit and advantage of the good name, reputation, and connection of a business", seeking to rely on Breyer Group plc v Department of Energy and Climate Change [2015] 1 WLR 4559 ("Breyer"), which recognised that the marketable and presently capitalisable value of a business' past work and reputation could constitute a possession under A1P1.

The High Court resoundingly rejected this submission, which it described as "creative". By establishing that it is settled law that A1P1 rights apply only to a person's existing possessions, and not to "future income" unless it has been earned or is definitely payable, Saini J distinguished the present case from Breyer. Dana could not succeed as it did not carry on any business in the UK and lacked any concrete reputation and/or corresponding commercial relationships sufficient to constitute goodwill as recognised by Breyer; the substance of the complaint was described as a "pure reputational concern" as a corporate entity, which the ECHR does not recognise. Saini J took the view that the A1P1 argument had "plainly" been constructed to overcome the obstacle of the established law on the jurisdictional scope of the ECHR.

Proportionality review of sanctions decisions

In spite of the finding that the ECHR does not apply in this case, Saini J acquiesced to the parties' invitation to consider the proportionality of the designation and concluded that the sanctions were proportionate.

In doing so, the court addressed an argument alleging arbitrary difference in treatment (eg that Dana is in a worse position than other companies that have not been designated in the UK). The court accepted that evidence of arbitrary difference in treatment may render a sanctions decision disproportionate, but considered that the evidential material necessary to make that claim good was missing in the present case. In any event, Saini J did not consider himself in a position to judge evidence on other companies so as to assess whether they were in a sufficiently similar position to make the difference in treatment arbitrary – this being a matter of executive judgement.

Further, in considering allegations of retrospectivity (ie that the designation was based on historic activities that were not targeted by the sanctions regime at the time they were carried out), Saini J reflected that "sanctions must look to past actions because such actions provide a sound evidential basis for deciding who should be sanctioned"; this aspect had been "hard wired" into the sanctions regime by primary and secondary legislation and as such the complaint had no merit.

Finally, the court dispensed with Dana's second ground of challenge that the designation was irrational on normal public law principles, commenting that it was hard to see how a decision the court has found to be proportionate could be irrational, as proportionality is a more exacting standard.

Comment

This decision reflects the long-established stance of the ECtHR on the meaning and scope of "jurisdiction" under Article 1 of the ECHR. Given the concept came of age during the development of the law on the "use of force" in international law in the early 2000s, it is interesting to see how the ECtHR's approach to jurisdiction is being tested by the transboundary challenges of the modern era, notably complex sanctions regimes, climate change, and cross-continent migration. Here we see the High Court tread carefully in this regard, keeping well within established ECtHR case law, despite the "creative" arguments deployed by Dana.

The case provides a useful point of reference for commercial organisations that, while courts should take a practical and effective approach to convention rights, A1P1 rights must be grounded in real assets, fall within established categories of "possession", and/or reflect material economic value to the entity (see relatedly our discussion of A1P1 rights in the Court of Appeal in Elliott Associates v the London Metal Exchange [2024] EWCA Civ 1168 here).