Bank Mellat v Her Majesty’s Treasury (No. 2) [2013] UKSC 39

Court: Supreme Court

Facts: The Treasury (T) imposed financial restrictions on Bank Mellat (BM), alleging that it was financing the development of nuclear weapons in Iran. BM sought judicial review, claiming that the restrictions interfered with its rights under Article 1 of the ECHR, which protects the right to property, including the peaceful enjoyment of business assets.

Issue: Was the Treasury’s interference with Bank Mellat’s financial dealings a proportionate and rational response to the statutory purpose of hindering Iran’s nuclear development?

Held: The Supreme Court allowed the appeal, ruling that the Treasury's order was disproportionate and unlawful.

Key Judicial Statement: Lord Sumption articulated the four-limb test for establishing proportionality: 1) Whether the objective was sufficiently important to justify limiting a fundamental right. 2) Whether the measure was rationally connected to the objective. 3) Whether a less intrusive measure could have been used. 4) Whether a fair balance has been struck between the claimant’s rights and community interests.

💡Leveluplaw: the importance of proportionality in assessing governmental restrictions on rights. The differing interpretations of the third limb of the proportionality test by Lord Sumption and Lord Reed indicate a nuanced approach to evaluating whether measures are reasonable and justifiable. Lord Sumption’s stricter interpretation emphasizes the necessity for courts to consider less drastic alternatives, while Lord Reed's view aligns more closely with the traditional Wednesbury standard of rationality.