Moves to make it a crime in the UK to breach international sanctions against Russia from this weekend have been given the go-ahead by the High Court.
One of Russia’s leading oil companies asked two judges, Lord Justice Beatson and Mr Justice Simon, to impose a stay on new legislation taking effect until it has had a chance to seek a judicial review.
The Government’s aim is to give the backing of the criminal law to Europe-wide sanctions introduced following Russian intervention in the Ukraine.
The OJSC Rosneft Oil Company argued that the proposed new laws were “riddled with uncertainty” and should not be allowed to bite in Britain until their legality can be challenged.
Lord Justice Beatson ruled: “I have concluded that in the circumstances of this case a stay should not be granted.”
He said the provisions of the new law “could have been more precise and clearer”, but the lack of clarity did not cross the threshold for granting a stay under either the common law or EU law.
The judges rejected arguments put forward by Pushpinder Saini QC, appearing for Rosneft at London’s High Court, that a stay should be granted because there was “a strong argument that the principle of legal certainty has been violated, or will be violated” by the UK measures.
The sanctions under attack in court prevent companies such as Exxon and Shell from providing services – including drilling, well testing and supplying specialised floating vessels – to Russian oil producers and pipeline operators including Rosneft.
The EU-wide prohibition covers deep water oil exploration and production, Arctic oil exploration and production, and shale gas projects in Russia. The ban came into effect on September 12.
Rosneft argues that any criminal offence must be “clearly described by the law”.
A sanction-breaching offence will be punishable by a maximum two years in prison or fines.
Rosneft says there is uncertainty over the meaning of the phrase “deep water”, and whether the word “Arctic” is meant to encompass all oil exploration within the Arctic Circle or simply offshore exploration.
Similarly, the phrase “shale oil project” is unclear on the specific type of operations that it covers, and whether it means all unconventional oil or gas projects that may involve drilling through shale rock.
HM Treasury and the Government successfully argued there was no substance in the Rosneft challenge and it should be rejected as it would prejudice the UK’s ability to meet its obligations under EU law.
It would also “undermine the co-ordinated international effort to make an effective response to Russia’s actions in the Ukraine”.