The world is glued to daily developments in the Edward Snowden affair - arguably, the dramatic battle of wits between one individual and a very powerful nation presents a fascinating reality show. Underlined a few years ago by WikiLeaks, the conflict between transparency in governance and government secrecy has never been more intense and more widespread in contemporary history.
In India too, the exercise of rights under the Right to Information Act, which enables disclosures to citizens about how our governments govern us, routinely evokes reactions as if the Official Secrets Act were sought to be violated. This column is about how governments have to be accountable for their decisions even when they throw the strongest (and indeed, these are the easiest to throw) arguments that numb even the worst critics into silence - examples: "national security", "integrity of the economic system", "safety and integrity of the market".
A very germane development in this context occurred last month. The Supreme Court of the United Kingdom rendered illegal, an order passed by the UK Treasury freezing the operations of Bank Mellat, an Iranian bank with substantial assets in the UK. The UK was acting ostensibly to protect UK against Iran's alleged designs to make nuclear weapons. The power to conduct a "closed material procedure" (CMP) - an extraordinary inroad into diluting the standards of fairness in dispensing justice - was adopted.
A CMP involves producing material to a court not only in a closed and private hearing, but also by excluding the presence of a party to the proceedings. Even worse, the procedure involves giving a partly-closed judgement i.e. a part of the judgement would not even be seen by the excluded party. In short, it is an extraordinary measure - not only blocks public visibility but also is also conducted behind the back of the very party affected by it. Of course, in true British form, a check and balance exists in the form of "special advocates" who would look after the interests of justice by giving the court a point of view different from that of the non-excluded parties.
To cut a long story short, in 2009, the UK Treasury directed "all persons operating in the financial sector" not to "enter into, or ... continue to participate in, any transaction or business relationship" with Bank Mellat on the ground that doing so would fund Iran's alleged nuclear weapons programme. The UK Parliament endorsed the order. In an appeal from the bank, a CMP was resorted to by the UK Treasury.
The order began as a "targeted measure" on the premise that there was a particular problem with Bank Mellat. It was found that the Treasury indeed knew that the bank indeed was not lax, and in fact, whenever entities who were already the bank's customers were newly added to the list of entities against whom there were international sanctions, the bank wound down and terminated relationships with them. The Treasury's arguments then shifted to the ground that Bank Mellat might be the "unwitting and unwilling" channel by which entities directly involved in Iranian weapons programme financed their imports. The high court judge gave two orders - one open, and the other, closed. The court of appeals did not give any closed judgement, although it looked at the closed material. The bank lost both appeals - the judges had played safe to rather let the restraint on the bank continue on a seemingly justifiable ground (risk of being an unwitting contributor) rather than lift the restraint.
The UK Supreme Court was not impressed. Bank Mellat won this epic battle (by a varying a 5:4 majority) with the court ruling that there was nothing specially wrong about Bank Mellat for it to be singled out for adverse action. The risk of it being an unwitting conduit was not applied to the generality of Iranian banks or indeed to any bank with operations in Iran.
The court found that the justifications for the Treasury's action kept shifting and were inconsistent, and therefore, the action was arbitrary, irrational and disproportionate.
The court also found (a variant 6:3 majority) that in any case the bank should have been given prior notice before taking action. It would have been able to address any concerns that the Treasury may have had, and it was not right for its reputation and commercial interests to be smashed without notice.
The court ruled that a fair appeal would not cure an unfair trial, and that checks and balances in the statute did not justify unfair treatment.
On the CMP, the court concluded (a 6:3 majority), that it if necessary for justice, the Supreme Court too may need to conduct a CMP. However, if a court strongly suspects that the closed material is not likely to affect the outcome of the appeal (as was the case with Bank Mellat) it should not resort to a CMP. The court has in very strong terms cautioned against resorting to a CMP lightly since it violates fundamental rights and notions of justice and fairness. In the words of the UK Supreme Court, "every party has a right to know the full case against him, and the right to test and challenge that case fully. A closed hearing is therefore even more offensive to fundamental principle than a private hearing".
In India, routinely, "ex parte" orders are resorted to, without any requirement to follow up and complete investigations. Once such an order is passed, regulators (they are but human) naturally bend over backwards to justify the initial action - often, with newer reasons. Routinely, closed envelopes are handed over to the judges in open court ostensibly to "satisfy the conscience of the court" - indeed, even judges call for files with an assurance that the other side would not see the contents. One can be commercially grounded in just the same way in which the United States could ground a person by putting him on a no-fly list without publicly stated reasons. Replies given to courts are similar to how the US Director of National Intelligence James Clapper said he was being "the least untruthful" when denying that the US collects data on hundreds of millions of Americans.
Amidst the drama over Snowden's whereabouts that diverts public debate at a tangent, the Justices of the UK Supreme Court have given a wake-up call to the international community reminding them on what it takes to remain a civil society. It is now time to respond.
In India too, the exercise of rights under the Right to Information Act, which enables disclosures to citizens about how our governments govern us, routinely evokes reactions as if the Official Secrets Act were sought to be violated. This column is about how governments have to be accountable for their decisions even when they throw the strongest (and indeed, these are the easiest to throw) arguments that numb even the worst critics into silence - examples: "national security", "integrity of the economic system", "safety and integrity of the market".
A very germane development in this context occurred last month. The Supreme Court of the United Kingdom rendered illegal, an order passed by the UK Treasury freezing the operations of Bank Mellat, an Iranian bank with substantial assets in the UK. The UK was acting ostensibly to protect UK against Iran's alleged designs to make nuclear weapons. The power to conduct a "closed material procedure" (CMP) - an extraordinary inroad into diluting the standards of fairness in dispensing justice - was adopted.
A CMP involves producing material to a court not only in a closed and private hearing, but also by excluding the presence of a party to the proceedings. Even worse, the procedure involves giving a partly-closed judgement i.e. a part of the judgement would not even be seen by the excluded party. In short, it is an extraordinary measure - not only blocks public visibility but also is also conducted behind the back of the very party affected by it. Of course, in true British form, a check and balance exists in the form of "special advocates" who would look after the interests of justice by giving the court a point of view different from that of the non-excluded parties.
To cut a long story short, in 2009, the UK Treasury directed "all persons operating in the financial sector" not to "enter into, or ... continue to participate in, any transaction or business relationship" with Bank Mellat on the ground that doing so would fund Iran's alleged nuclear weapons programme. The UK Parliament endorsed the order. In an appeal from the bank, a CMP was resorted to by the UK Treasury.
The order began as a "targeted measure" on the premise that there was a particular problem with Bank Mellat. It was found that the Treasury indeed knew that the bank indeed was not lax, and in fact, whenever entities who were already the bank's customers were newly added to the list of entities against whom there were international sanctions, the bank wound down and terminated relationships with them. The Treasury's arguments then shifted to the ground that Bank Mellat might be the "unwitting and unwilling" channel by which entities directly involved in Iranian weapons programme financed their imports. The high court judge gave two orders - one open, and the other, closed. The court of appeals did not give any closed judgement, although it looked at the closed material. The bank lost both appeals - the judges had played safe to rather let the restraint on the bank continue on a seemingly justifiable ground (risk of being an unwitting contributor) rather than lift the restraint.
The UK Supreme Court was not impressed. Bank Mellat won this epic battle (by a varying a 5:4 majority) with the court ruling that there was nothing specially wrong about Bank Mellat for it to be singled out for adverse action. The risk of it being an unwitting conduit was not applied to the generality of Iranian banks or indeed to any bank with operations in Iran.
The court found that the justifications for the Treasury's action kept shifting and were inconsistent, and therefore, the action was arbitrary, irrational and disproportionate.
The court also found (a variant 6:3 majority) that in any case the bank should have been given prior notice before taking action. It would have been able to address any concerns that the Treasury may have had, and it was not right for its reputation and commercial interests to be smashed without notice.
The court ruled that a fair appeal would not cure an unfair trial, and that checks and balances in the statute did not justify unfair treatment.
On the CMP, the court concluded (a 6:3 majority), that it if necessary for justice, the Supreme Court too may need to conduct a CMP. However, if a court strongly suspects that the closed material is not likely to affect the outcome of the appeal (as was the case with Bank Mellat) it should not resort to a CMP. The court has in very strong terms cautioned against resorting to a CMP lightly since it violates fundamental rights and notions of justice and fairness. In the words of the UK Supreme Court, "every party has a right to know the full case against him, and the right to test and challenge that case fully. A closed hearing is therefore even more offensive to fundamental principle than a private hearing".
In India, routinely, "ex parte" orders are resorted to, without any requirement to follow up and complete investigations. Once such an order is passed, regulators (they are but human) naturally bend over backwards to justify the initial action - often, with newer reasons. Routinely, closed envelopes are handed over to the judges in open court ostensibly to "satisfy the conscience of the court" - indeed, even judges call for files with an assurance that the other side would not see the contents. One can be commercially grounded in just the same way in which the United States could ground a person by putting him on a no-fly list without publicly stated reasons. Replies given to courts are similar to how the US Director of National Intelligence James Clapper said he was being "the least untruthful" when denying that the US collects data on hundreds of millions of Americans.
Amidst the drama over Snowden's whereabouts that diverts public debate at a tangent, the Justices of the UK Supreme Court have given a wake-up call to the international community reminding them on what it takes to remain a civil society. It is now time to respond.
(The author is a partner of JSA, Advocates & Solicitors. The views expressed herein are his own) somasekhar@jsalaw.com