Russian Investors Lose First-Ever Appeal Against NSIA Order

Ross Evans’ commentary was included in a Global Competition Review article discussing a decision by UK courts to reject a challenge by Russian oligarch-backed investment company LetterOne to an order to unwind its £1 billion acquisition of Upp, signaling that UK courts will grant wide deference to the government on national security reviews.

Courts have historically given the government “a wide margin of discretion” when dealing with matters of national security, Ross noted. The rejection of LetterOne’s appeal indicates that the secretary of state did not consider improper factors when weighing whether the transaction would give rise to a national security risk, he said.

Ross added that the judgment suggests that the potential influence of indirect beneficial owners – and the possibility of foreign states coercing them – can be a legitimate consideration when examining the ownership of a communications network and service provider. But the judgment is likely to be highly case-specific by nature and the appropriateness of factors considered in this deal are unlikely to be the same in another transaction, he continued.

Ross also noted that another significant aspect of these proceedings was LetterOne’s partial success in an application to get greater access to documents and correspondence related to the government’s decision, and to challenge the basis of certain redactions. This case therefore outlined important principles for access to information in NSIA reviews and “will be of wider interest to parties considering a challenge to a decision imposing a final order,” he said.