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The Constitutionality of the FIU’s Power to Freeze Bank Accounts without a Court Order under the Anti-Money Laundering Act
By Divino Sabino
Chapter 1: Introduction
With a view to better combat money laundering and with the assistance of the International Monetary Fund (“IMF”), the Seychelles passed the Anti-Money Laundering Act, 2006 (“AMLA”). AMLA repealed and replaced the Anti-Money Laundering Act, 1996, which had seen little application in practice and was considered as outdated by the Government.
Under section 10(4) of AMLA, the Seychelles’ financial intelligence and asset recovery unit, coined as the “FIU” under section 16 of AMLA, has the power to direct a banking institution “not to carry out a specified service or transaction during the period specified in the direction, not exceeding 180 days,…”. Essentially, section 10(4) allows the FIU to instruct a bank to freeze the funds in a bank account for up to 180 days without the need for the FIU to obtain a court order. Under section 10(4) of AMLA, the FIU may issue such a directive if it (i) has received a suspicious transaction report relating to the matter within the preceding 30 days; or (ii) the FIU has obtained or received information relating to the matter and such a direction is necessary in order for the FIU to investigate whether the property stems from criminal conduct.
Section 10(9) of AMLA allows an aggrieved party, to go to court and apply for the FIU direction under section 10(4) of AMLA to be revoked, but such a challenge is subject to that party conforming with section 10(8)(a) of AMLA, which states that:
“[t]he FIU may, to expedite its investigations while a direction is in force require from a person reasonably appearing to have relevant knowledge, information, documents or materials in his or her possession or control to furnish such information, materials or documents in the manner and within the required time.”
This requirement for information from a person reasonably appearing to have relevant knowledge is often made by the FIU in the form of a letter directed towards the bank account holder, which they have coined the “statutory letter”. However, by law (note the use of the word “may” in section 10(8)(a), as cited immediately above) the FIU is not obliged to issue this statutory letter and is also not obliged to issue the statutory letter to the bank account holder. Although in practice the author’s experience is that the FIU does appear to always issue a statutory letter to the bank account holder, the fact remains that AMLA allows the FIU to deprive a party from the use and enjoyment of its property for 180 days without the requirement for a court order on the mere ground that the FIU are investigating the matter. And as noted above, the law allows the FIU to deprive a party from applying to court to revoke the section 10(4) direction by merely not issuing a request for information as per section 10(8)(a) of AMLA.
Freezing Bank Accounts without a Court Order: Other Countries
Seychelles is not unique in that it allows its FIU to freeze bank accounts without the need of a court order, other countries provide for this as well. For example, countries such as the Bahamas, Switzerland and South Africa allows their FIU equivalent to direct a bank to freeze an account for up to 5 days without a court order. And in fact, the original provisions of AMLA that was passed in 2006 had this time period also set at 5 days. This time period was amended in 2008 to the draconian ‘indefinite freeze’ and then further amended in 2011 to the present position of 180 days, with unlimited further extensions of up to 180 days via an ex parte court order. But the Seychelles time period is unique in that the FIU’s directive powers to freeze an account is far longer than most other countries. Countries such as the Philippines allow its relevant authority, the Anti-Money Laundering Council (“AMLC”) to issue a freezing order directing a bank to freeze an account, its application is limited to 15 days. And although the Philippines’ AMLC may apply to court for further extensions of up to 15 days of the freeze order, it must take steps to inform the account holder of the freeze order and allow the account holder to formulate a response and deal with the response within the initial 15 day period. The United Kingdom’s treatment of freezing bank accounts without a court order is geared towards ensuring that banks are not complicit in the furtherance of money laundering offences. To that end, banks must ensure that whenever it files a suspicious transaction report with its relevant authority, which is the Financial Services Authority (“FSA”) in the United Kingdom, the bank must wait for the FSA to give its consent before the bank may proceed with the transaction in question. Failure for the bank to obtain consent may result in the bank being complicit in committing a money laundering offence. If the FSA fails to respond within 7 working days after the bank’s disclosure, the law treats the bank as having obtained deemed consent to proceed with the transaction. However, if the FSA refuses to give its consent, the particular transaction may not proceed for a further 31 calendar days from the date of the authority’s refusal. The United Kingdom only prevents a particular transaction from proceeding at the behest of suspicious transaction report from a bank. It does not empower the FSA to wantonly freeze entire bank accounts without the suspicious transaction report from the bank. In the Republic of Ireland, Section 2 of the Offences Against the State (Amendment) Act 1985 provides for the relevant Minister, by a written document, to simply direct a bank to pay into the High Court any funds held by the bank on the grounds that that the funds belong to an unlawful organization. The onus is then on persons interested in the funds to challenge the authorities within 6 months of the Minister’s directive else the funds may be confiscated by the state by a court order on an ex parte application of the relevant Minister. However, scholars such as Campbell have criticised the regime for disregarding or stretching the principles of due process.
In other countries, the FIU equivalent has no power to freeze an account without first obtaining a court order, an example of such a country is Seychelles’ neighbours – Mauritius. The argument in support of the freezing directive is that if the account holder is somehow alerted of the fact that the FIU may seek to freeze its account by order of the court, then the account holder will forthwith instruct its bank to transfer all of the funds to another country, thus easily defeating any measures that may be taken to combat those who benefit through the proceeds of crime. Accordingly, some argue that freezing the account without a court order is justifiable so that the FIU can have ample time to prepare a suitable application to court for a freezing order. Another argument is that the FIU has to investigate the source of funds in particular accounts and that it must be allowed to complete its investigations, however long it may take. But as is the case in Mauritius, there should be measures in place to ensure that the authorities use their powers in a proper manner and that the constitutional rights of individuals are not infringed, and one way to ensure that this happens is to go to a fair and independent third party arbiter – a court of law.
The Financial Action Task Force (“FATF”) Recommendations and Development of the Law
Whatever reasons a country may have for promulgating laws that provide for the freezing of assets without a court order, there is the added pressure from FATF for each country to comply with its recommendations in combating money laundering.
FATF was established by the G-7 Summit held in Paris in July 1989. Its mandate was to examine money laundering techniques and trends and setting out measures to combat money laundering. To that end, FATF has come up with the International Standards on Combating Money Laundering and the Financing of Terrorism and Proliferation, often referred to simply as the FATF Recommendations or the 40+9 FATF Recommendations. The recommendations range from identifying risks and ensuring domestic co-ordination of intergovernmental bodies in the fight against money laundering to the setting up of a local financial intelligence unit to spearhead such a battle. FATF applies pressure on countries to adopt its recommendations through a mutual evaluation process. Through this peer review process, each FATF member country is in turn examined by FATF through on-site visits of teams of a handful of selected experts in the legal, financial and law enforcement fields from other Member governments. The team then draws up a report assessing the extent to which the evaluated country has implemented the FATF Recommendations. Although Seychelles is not a member of FATF, it is a member of the Eastern and Southern Africa Anti-Money Laundering Group (“ESAAMLG”), which is itself a member of FATF and which also seeks to ensure that its members implement the FATF Recommendations. These FATF evaluations investigate the extent that a country has implemented the 40+9 FATF Recommendations. Recommendation 4 is entitled “Confiscation and provisional measures” and stipulates for each country to provide, inter alia, for “provisional measures, such as freezing and seizing, to prevent any dealing, transfer or disposal of such property”. The text of the recommendation does not state precisely how this should be done, but its authors show awareness of the possibility that each locality may have its own particular supreme laws or inherent principles that may determine how the implementation of the recommendations should be manifested. In particular, the text of the recommendation states:
“Countries should consider adopting measures that allow such proceeds or instrumentalities to be confiscated without requiring a criminal conviction (non-conviction based confiscation), or which require an offender to demonstrate the lawful origin of the property alleged to be liable to confiscation, to the extent that such a requirement is consistent with the principles of their domestic law”.
The latest FATF evaluation on the extent of Seychelles’ implementation of its 40+9 recommendations was conducted from the 20th November to the 1st December 2006 through an on-site visit and information provided to the investigators by the Government of Seychelles. This was at the time when the ‘180 days freeze’ provisions of the AML were not yet enacted. At the time of the on-site visit, AMLA had the 5-day freeze regime. The FATF Mutual Evaluation Report (“the Report”) on Seychelles, which was adopted by the ESAAMLG Task force on the 20th August 2008, did not comment on the power of the FIU to direct a bank to prevent a specific transaction or service for 5 days. On the 18th August 2008, only a few days before the adoption of the Report by the ESAAMLG Task Force, the 2008 amendments were assented to by the President of the Republic of Seychelles, having been passed by the National Assembly on the 25th July 2008, amendments which provided for the indefinite freeze regime, this despite the fact that the Report did not pick issue with the 5-day freeze regime. The Preface of the Report commented that the 2008 amendments could not be taken into consideration in finalisation of their Report, which suggests that the timing of the promulgation of the 2008 amendments may have been motivated to temper any negative comments that were expected to be in the Report, which would not have been adopted yet (20 August 2008) at the time that the 2008 amendments were passed (25 July 2008). In fact the relevant bill, the Anti-Money Laundering (Amendment) Bill, 2008 was only published on the 14th July 2008, which would have been the first time that the bill would have been officially made public. This would have given the public, including legal professionals, the banks and corporate service providers, very little time to review and make comments on the amendments that were eventually passed only 9 days later. This is significant because legal professionals would have been given an opportunity at this stage to raise concerns about the constitutionality of the indefinite freeze regime. This was later amended in 2011 with the 180-day freeze regime. In similar fashion to the manner in which the 2008 amendments were passed, the 2011 amendments were promulgated with little or no consultation with the public, and the opportunity for the wider community of legal professionals to raise concerns about the constitutionality of such clauses was bypassed. In this case, the Anti-Money Laundering (Amendment) Bill, 2011 was published in the Seychelles Official Gazette’s 6th December 2011 edition, this would be the first occasion that the public would have had sight of the bill, thereafter, 8 days later, on the 14th December 2011, it was passed by the National Assembly and then assented to by the President on the 22nd December 2011. At the time that the law was passed, the Government stated that the amendments were “in line with the recommendations of the first phase of the Organisation for Economic Co-operation and Development (“OECD”) Peer Review on Seychelles.”
Sources of Constitutional Jurisprudence
The first true challenge to the constitutionality of AMLA came forth in the Seychelles Constitutional case of Hans Hackl v/s The Financial Intelligence Unit, the Petitioner challenged, inter alia, the constitutionality of the anti-money laundering laws with regards to whether the definition of criminal conduct in AMLA, which includes criminal conduct outside of the Seychelles jurisdiction, is constitutional. The Petitioner also challenged the constitutionality of Proceeds of Crime (Civil Confiscation) Act, 2008 (“POCA”) with regards to his right to a fair hearing and right to property. However, the challenge was based on the constitutionality of the inter partes proceedings under AMLA and POCA, the Constitutional Court of Seychelles ruled that they were and the Seychelles Court of Appeal (which is the highest and final appellate court in Seychelles) upheld the Constitutional Court’s decision. Although this is the first and only case so far to challenge the constitutionality of AMLA, it only challenged the constitutionality of inter partes proceedings and did not touch upon the FIU’s powers to freeze funds held in a bank account without the requirement of a court order. As such, there is no local jurisprudence challenging the constitutionality of the 180-day freeze regime without a court order.
To analyse the constitutionality of the 180-day freeze regime, we will therefore need to refer to the treatment of the Seychelles courts on the issues of fair hearing and property rights and rely on relevant foreign jurisprudence. Reference to foreign jurisprudence as guidance in the judicial interpretation of the Seychelles Constitution is expressly catered for in article 48 the Constitution of the Republic of Seychelles, which states:
“This Chapter shall be interpreted in such a way so as not to be inconsistent with any international obligations of Seychelles relating to human rights and freedoms and a court shall, when interpreting the provision of this Chapter, take judicial notice of - (a) the international instrument containing these obligations; (b) the reports and expression of views of bodies administering or enforcing these instruments; (c) the reports, decisions or opinions of international and regional institutions administering or enforcing Conventions on human rights and freedoms; (d) the Constitutions of other democratic States or nations and decisions of the courts of the States or nations in respect of their Constitutions.”
Reference to the term ‘Chapter’ in article 48 refers to Chapter III of the Seychelles Constitution that covers the Seychellois Charter of Fundamental Human Rights and Freedoms and covers articles 15 to 49 of the Constitution. Furthermore, in the Seychelles Court of Appeal case of Trajter v Morgan, Twomey, JA remarked in paragraph 20 of her judgment that given article 48 and the similarity between the Seychelles Charter of Human Rights to that of the European Convention of Human Rights, Seychelles constitutional interpretation ought to be consistent with that of the interpretation of the European Convention of Human Rights.
Chapter 2: Does the 180-day freeze breach one’s Right to a Fair Hearing under the Constitution?
Part 1 of Chapter 3 of the Constitution of Seychelles is the Seychellois Charter of Fundamental Human Rights and Freedoms. The present constitution came into force in 1993. Article 19 of the Constitution states that everyone has a right to a fair and public hearing. For civil proceedings, articles 19(7) to 19(9) are most relevant. Article 19(7) states that:
“Any court or other authority required or empowered by law to determine the existence or extent of any civil right or obligation shall be established by law and shall be independent and impartial, and where proceedings for such a determination are instituted by any person before such a court or other authority the case shall be given a fair hearing within a reasonable time.”
Person is defined in the Constitution as “any company or association or body of persons whether corporate or unincorporated”. Article 19(8) states that:
“Subject to clause (9), all proceedings of every court and proceedings for the determination of the existence or extent of any civil right or obligation before any court or other authority, including the announcement of the decision of the court or other authority, shall be held in public.”
Finally, article 19(9) of the Constitution states that the court may not exclude from a hearing “persons other than the parties thereto, their legal representatives and legal practitioners” except where publicity would prejudice the interest of justice, in interlocutory proceedings, interest of public morality, the welfare of minors, the protection of the privacy of persons concerned in the proceedings; or in the interest of defence, public safety or public order. Accordingly, implicit in article 19(9) is that a party to the proceedings must be represented where the existence or extent of a civil right or obligation may be determined.
Right of Access to the Courts
However, the wording of the Articles 19(7) to 19(9) states that it is only when one has a civil right or obligation that has to be determined by a court or other authority does one have a right to a fair hearing. Article 19 does not explicitly state that a party has the right of access to the courts.
The same wording, or rather the lack of explicit wording with regards to the issue of access to the courts is present in the European Convention of Human Rights. Although article 6(1) of the Convention states that a party has a right to a fair hearing in the determination of one’s civil rights or obligations, the Convention does not explicitly state that a party has a right to access the courts where such a civil right or obligation may be infringed. This was an issue in the European Court of Human Rights case of Golder v United Kingdom in which a prisoner, Golder, was prevented from challenging negative entries entered into his prison records, which, according to Golder, influenced the parole board into refusing to grant him parole. Golder had wanted access to a solicitor to institute libel proceedings against the prison officer who had stated that Golder was involved in assaulting a prison officer during a riot, and although after due investigations, no disciplinary action was taken against Golder, an entry was made in his prison records to the effect that Golder had a role in the riots, which Golder vehemently disputed. Rules 33, 34 and 37 of the Prison Rules 1964 requires leave of the Secretary of State for a prisoner to communicate with any outside person, even for legal advice or for the purpose of instituting legal proceedings. The Secretary of State refused Golder’s request for access to a Solicitor. Accordingly, Golder submitted a complaint to the European Commission that he was refused access to a Solicitor, and as a consequence, refused access to the courts.
One of the questions that the European Court of Human Rights directed its mind to was:
“Is Article 6 (1) limited to guaranteeing in substance the right to a fair trial in legal proceedings which are already pending, or does it in addition secure a right of access to the courts for every person wishing to commence an action in order to have his civil rights and obligations determined?”
In analyzing the issue the court stated orbiter that:
“Were Article 6 (1) to be understood as concerning exclusively the conduct of an action which had already been initiated before a court, a Contracting State could, without acting in breach of that text, do away with its courts, or take away their jurisdiction to determine certain classes of civil actions and entrust it to organs dependent on the Government. Such assumptions, indissociable from a danger of arbitrary power, would have serious consequences which are repugnant to the aforementioned principles and which the Court cannot overlook. It would be inconceivable, in the opinion of the Court, that Article 6 (1) should describe in detail the procedural guarantees afforded to parties in a pending lawsuit and should not first protect that which alone makes it in fact possible to benefit from such guarantees, that is, access to a court. The fair, public and expeditious characteristics of judicial proceedings are of no value at all if there are no judicial proceedings.”
The court went on to state that access to courts is inherent in the right stated in article 6(1), that is, the right to a fair and public hearing. Given article 48 of the Seychelles Constitution, and the finding of the Seychelles Court of Appeal in the Trajter case that Seychelles’ Charter of Human Rights is similar to that of the European Convention, and therefore should be interpreted in line with the judicial interpretations of the European Convention, it is arguable to state that Article 19 of the Seychelles Constitution, must be interpreted in the manner that the Golder case has interpreted article 6(1) of the European Convention of Human Rights, so that inherent in Article 19 is the right to access to the courts for the determination of one’s civil rights and obligations.
Right of access to the Seychelles Constitutional Court was an issue in the Seychelles Court of Appeal case of Morin v Minister of Land Use & Or. In that case, the State had argued that a party wishing to challenge the legality of the compulsory Government acquisition of land had to do so as per the processes set out in the Acquisition of Land in the Public Interest Act, 1996 (“ALPIA”). In particular, section 8 of ALPIA which states that anyone who wishes to challenge the legality of an acquisition may do so by applying to the Supreme Court of Seychelles instead of being able to go directly to the Constitutional Court of Seychelles. The Seychelles Court of Appeal, in paragraph 10 of the Ramodibedi, P’s judgment, stated that section 46(1) of the Seychelles Constitution:
“…confers the right of access to the Constitutional Court by an aggrieved party challenging a contravention of the Constitution in the clearest possible terms. That right is unqualified and, being a constitutional right, it cannot be limited or denied save in accordance with the Constitution itself and more particularly Articles 46(3) and 46(7)”.
Article 46(1) of the Seychelles Constitution reads as follows:
“A person who claims that a provision of this Charter has been or is likely to be contravened in relation to the person by any law, act or omission may, subject to this article, apply to the Constitutional Court for redress.”
Article 46(3) states that the Constitutional Court may decline to entertain an application under 46(1) where it is satisfied that the party has obtained redress for the contravention. Article 46(7) states that in any proceedings other than the Constitutional Court of the Court of Appeal where a question arises as to whether there has been a contravention of the Charter, the court shall refer the question for determination by the Constitutional Court if it is not frivolous or vexatious or has already been determined by the Constitutional Court of Court of Appeal.
In paragraph 11 of the same judgment, Ramodibedi goes on to state that Article 19(7) of the Constitution “provides for the right of access to “any court” in the determination of civil rights or obligations…” but does not provide any further analysis into the matter other than that statement, which is why the analysis in Golder is crucial. The two other Justices of Appeal concurred with Ramodibedi’s findings in a unanimous judgment.
Accordingly, both the Golder and Morin cases expand upon the Constitution of Seychelles in stating that inherent therein is the right of access to the courts. And this is essential to one’s right to a fair hearing as it is the courts who should decide upon the merits of a party’s claim and it is not for the executive or other non-judicial body to do so. This is summed up neatly in paragraph 40 of Golder, which states:
“It was not for the Home Secretary himself to appraise the prospects of the action contemplated; it was for an independent and impartial court to rule on any claim that might be brought. In declining to accord the leave which had been requested, the Home Secretary failed to respect, in the person of Golder, the right to go before a court as guaranteed by Article 6 (1).”
In the same vein section 10(9) of AMLA allows the FIU to prevent a party from challenging the 180-day freeze directive simply by not issuing a statutory letter on that party or, if they do so and receive a reply, by stating that the reply was inadequate. In the process, the FIU is preventing a party from accessing the courts and as a consequence, prevents the party from having an independent and impartial court rule on any claim that that party may have. As mentioned earlier, although in practice it appears as though the FIU always issues a statutory letter to the account holder, the issue here is that the law allows them not to.
Temporary Loss of Civil Rights without a Hearing
A party’s right to a fair hearing has multiple facets and does not end with the issue of access to the courts. Of paramount concern to the Seychelles legal and business community is the fact that the section 10(4) of AMLA allows the FIU, by a mere ‘direction’ to deprive a party from enjoying funds held in their bank account for a whole 180-days without any hearing or judicial intervention.
But is the right of access to a fair hearing relevant when what is in issue is only a temporal loss of enjoyment to dispose of one’s funds in a bank account? According to article 19(7) one’s right to a fair hearing is the right to have an independent and impartial court “determine the existence or extent of any civil right or obligation… within a reasonable time.” Is the 180-day freezing directive under section 10(4) of AMLA a ‘determination’ of the existence or extent of any ‘civil right or obligation’? In fact, it is perfectly arguable that in issuing the 180-day freeze directive, which only prevents the dealing in the funds in a particular bank account, the FIU is not making any final determination on the existence or extent of any civil right or obligation, they are not making any finding that the particular funds stem from the proceeds of crime and they are not seeking to have the funds confiscated under POCA. Although the 180-day freeze under section 10(4) of AMLA is the starting point for an eventual action for civil confiscation of the funds under POCA, at the freezing direction stage of the process, no civil right or obligation is in fact being determined.
It is therefore unsurprising that numerous cases before the European Court of Human Rights have held that interim or provisional measures do not determine civil rights. In the case of Micallef v Malta, the European Court of Human Rights stated:
“Preliminary proceedings, like those concerned with the grant of an interim measure such as an injunction, are not normally considered to determine civil rights and obligations and do not therefore normally fall within the protection of Article 6.”
The United Kingdom’s Human Rights Act 1998’s fair hearing provisions (Article 6 of the First Schedule) are similarly worded to that of the European Convention, and its treatment of interim measures is also similar. A determination must, in general be a final determination of a civil right or obligation. In the Court of Appeal case of R(Wright) v Secretary of State for Health, the court stated that:
“article 6 does not apply to proceedings relating to interim orders or other provisional measures adopted prior to proceedings on the merits, since the very provisional or temporary nature of such measures as a general rule cannot be regarded as involving the determination of civil rights and obligations within the meaning of article 6”.
However, both of the above cases involved provisional measures that were part and parcel of court or tribunal proceedings. Does it make any difference to the above-mentioned principles if the ‘provisional measure’ is administrative as opposed to a judicial one? That is, a decision or order, albeit a provisional one, from a body that is not an independent or impartial court or tribunal. In a number of cases before the European Court of Human Rights, the court has been satisfied that where a decision from a lower body, such as a tribunal can later be subject to the jurisdiction of a court, e.g. by an appeal to a court of law, then the protection afforded by Article 6 with regards to access to an independent and impartial court or tribunal is satisfied. Clayton and Tomlinson summarizes the position as follows:
“Where civil rights and obligations are decided by an administrative, executive or professional disciplinary body that is not a tribunal for the purposes of Article 6, the guarantees need not be applied at the initial decision stage, so long as the decision making body is ultimately subject to a judicial body that meets the Article 6 requirements.”
In the case of the FIU, the initial directive to freeze the funds held in a bank account is later, upon the expiry of the initial 180-day freeze directive, subject to a further extension only by the Supreme Court through ex parte applications of the FIU. Thereafter, there is no limit to the number of times that the FIU may apply to court for a further extension of the freezing directive for a further 180 days. In the matter of the Financial Intelligence Unit v DJS Capital Limited and JN Capital Limited, the combined period of the freezing directive and ex parte orders came up to in excess of 14 months. That is 14 months in which the account holder was unable to dispose of their funds. The FIU has used the ground that they need to make “further enquiries and investigations” to convince the courts to prolong the effect of the freezing directive to arguably unreasonable periods of time.
It may be argued that the FIU should initiate civil confiscation proceedings under POCA prior to the expiry of the 180-day freezing directive, and if they do not have the evidence to pursue civil confiscation proceedings then they should simply withdraw the freezing directive. And although the account holders may seek to commence proceedings to release funds in their bank accounts, it is often the case that the costs of pursuing such proceedings are quite significant, often entailing having to fly in witnesses to Seychelles to give oral evidence in court, as per the Supreme Court of Seychelles case of the Financial Intelligence Unit v Cyberspace Ltd. So significant in fact, that certain parties prefer to wait and hope for the court to refuse to grant a further extension of the freeze directive, which rarely happens. Nevertheless, in line with the principles set forth in a number of cases of the European Court of Human Rights, so long as the administrative body’s decision is later subject to scrutiny by an independent and impartial court or tribunal, then, as the case is here, there is therefore no final determination of a civil right or obligation and article 6 is not relevant.
The above principle presupposes that the effect of interim or provisional measures will be relatively brief. However, consideration must be had for circumstances where the effect of the provisional measure may last for a prolonged amount of time. This was the concern of the European Court of Human Rights in the case of Micallef wherein it stated that:
“The exclusion of interim measures from the ambit of Article 6 has so far been justified by the fact that they do not in principle determine civil rights and obligations. However, in circumstances where many Contracting States face considerable backlogs in their overburdened justice systems leading to excessively long proceedings, a judge’s decision on an injunction will often be tantamount to a decision on the merits of the claim for a substantial period of time, even permanently in exceptional cases. It follows that, frequently, interim and main proceedings decide the same “civil rights or obligations” and have the same resulting long-lasting or permanent effects.”
The court went on to state:
“Against this background the Court no longer finds it justified to automatically characterise injunction proceedings as not determinative of civil rights or obligations. Nor is it convinced that a defect in such proceedings would necessarily be remedied at a later stage, namely, in proceedings on the merits governed by Article 6 since any prejudice suffered in the meantime may by then have become irreversible and with little realistic opportunity to redress the damage caused, except perhaps for the possibility of pecuniary compensation.”
Accordingly, in light of delays or the prolonged effect of the provisional measure, the European Court of Human Rights found that it could no longer automatically maintain the long-held principle that provisional measures did not ‘determine’ any civil right or obligation and were therefore outside of the ambit of protection of fair hearing rights. The court went on to add that “the nature of the interim measure, its object and purpose as well as its effects on the right in question should be scrutinised.”
In fact, Mecallef was not the only time that the European Court of Human Rights strayed from the general provisional measure principle. Almost a decade earlier, in the case of Markass Car Hire Ltd v Cyprus, the court held that the provisional or interim measures in that particular case was tantamount to a final determination of a civil right or obligation and therefore necessitated the protection afforded by article 6(1) of the European Convention. In that case, an interim injunction led to the non-usage of a large fleet of vehicles and caused great harm to the car hire company. The provisional or interim measures were in place for almost 2 years. The court mentioned that the “combined effect of the measure and its duration caused irreversible prejudice to the applicant’s interests”.
But it appears from the above 2 leading cases that the European Court of Human Rights will be willing to afford fair hearing principles to an otherwise provisional or interim measure only where there is a prolonged duration of the effect of the provisional measure and where it may cause irreversible damage or prejudice to a party.
The treatment in the United Kingdom is somewhat similar. In the case of R(Wright) v Secretary of State for Health the Court of Appeal referred to the Markass case and noted the following:
“The general rule that a provisional decision does not involve a determination of civil rights is not in doubt. It has been asserted in a number of cases such as X v United Kingdom (1981) 24 DR 57 , 61; Jaffredou v France (Application No 39843/98) (unreported) 19 May 1999 ; Apis v Slovakia (2000) 29 EHRR CD 105 and Carreira v Portugal (Application No 41237/98) (unreported) 6 July 2000 . But if an interim decision has or is capable of having a seriously detrimental effect on the party affected by it, then it may involve a determination of civil rights. Whether it has this effect is a question of degree.”
The test in the Wright case is not the same as that taken by the European Court of Human Rights. The test before the European Court of Human Rights includes the elements of prolonged delay or lasting effect and irreversible damage to a party in order for an otherwise provisional or interim measure to qualify as a determination of a civil right or obligation and therefore necessitating protection under article 6(1) of the European Convention, however, the test in the UK, according to the Wright case, has a potentially wider ambit, it is not unduly concerned with the length of time that the provisional measure is in effect or whether its effect causes irreversible damage, its crux is whether the provisional or interim measure is capable of causing a seriously detrimental effect on a party. It is arguable that despite the wording of the test used by the European Court of Human Rights on whether a determination of a civil right or obligation has indeed occurred through a provisional or interim measure, the application of their own test is in fact more in line with the wording of the test as laid down in the Wright case. In the case of Le Compte, Van Leuven and De Meyere v Belgium, the European Court of Human Rights found that the suspension for three months of a medical practitioner did involve a determination of civil rights, even if the suspension was only temporary and there was no irreversible damage. In the Markass case, the vehicles, which could not be used as a result of the interim injunction, were not destroyed or damaged so that they could not operate again. Both of these cases point to the likelihood that the European Court of Human Rights has adopted the Wright approach despite not explicitly stating so. In LeCompte, the duration of the suspension was only 3 months, not a prolonged period for such a suspension and in Markass, the damage to the vehicles, if any, were not irreversible as any loss of profits or business which the party could have suffered could be compensated through damages. Admittedly, the damage done to the reputation or goodwill to the company may have been difficult to remedy.
Accordingly, it is arguable that the true test of whether fair hearing rights should be applicable to provisional or interim measures, in that a determination of a civil right or obligation has occurred, should be based on the seriousness of the impact of the provisional or interim measure, as espoused in the Wright case.
The Wright case went on to state that it would be a question of degree whether or not a determination of civil rights was made by the provisional or interim decision. In the case of Seychelles, there are instances where business entities are deprived of their working capital due to the 180-day freezing directive on their bank accounts. Leading to these businesses not being able to pay for their expenses and liabilities as and when they fell due, which can lead to insolvency proceedings being commenced against the entity were it to be a company. These entities have suffered great hardship as a result of the freezing directive and in some cases, in order to avert disaster, these entities have had to enter into settlements with the FIU, wherein they forfeit a part of the funds in the bank account to the Government in order to gain access to the rest of the sums. In these settlements, no guilt is admitted by the entities with regards to allegations of money laundering and/or the funds stemming from the proceeds of crime, but the impression given by these settlements are that the forfeited sums stem from the proceeds of crime and the funds released do not.
Existence or Extent of any Civil Right or Obligation
Before reaching a conclusion on whether the 180-day freeze regime may constitute a breach of one’s right to a fair hearing, consideration must be given as to whether the subject matter of the freezing directive, i.e. not being able to dispose of funds held in one’s bank account, constitutes a ‘civil right or obligation’. The “right to acquire, own, peacefully enjoy and dispose of property either individually or in association with others” is a constitutional right under article 26(1) of the Seychelles constitution. An interference with one’s constitutional rights should not only breach one’s civil rights, but also encompass it.
In the case of In Re s (Minors) (Care Order: Implementation of Care Plan), Lord Nicholls states that the rights that are envisaged by the term “civil rights and obligations” point to domestic civil rights outside of the sphere of the European Convention of Human Rights. He notes that article 13 of the European Convention provides specifically for breach of convention rights, therefore article 6(1) should accordingly be limited in its application. However, in the United Kingdom’s context, he states that given that the Convention Rights has been domesticated by virtue of the Human Rights Act 1998, any infringement of one’s convention rights is therefore also a breach of one’s domestic civil rights. However, the initial approach of the European Court of Human Rights was to define civil rights and obligations to mean private law rights as opposed to public law rights. By private law rights, the European Court of Human Rights envisioned rights and obligations between private persons, such as disputes concerning tort, succession, family law or if such private law rights feature predominantly. However, there are no clear principles that may be extracted from the more recent case law from the European Court of Human Rights, as the court has subsequently been willing, although not consistently, to include convention rights within the ambit of article 6(1). The dispute itself need not be one that only concerns private persons, so long as the matter involved the determination of private rights and obligations. Typically, if the matter involves the financial interest of a party then this is generally held to be an issue that involves one’s civil rights and obligations except where the claim of a financial interest is based purely on a discretionary basis e.g. a claim in relation to a non-statutory disaster fund or a discretionary hardship award. With regards to the freezing of funds held in a bank account, it is unequivocal that the matter concerns a financial interest that is not based purely on a discretionary basis.
Article 19(7) of the Seychelles Constitution also states that a party “shall be given a fair hearing within a reasonable amount of time.” However, this normally applies from the point in time in which proceedings are commenced. In the case of the 180-day freezing directive, from the time that such a directive is given, there is no certainty that any relevant matter will eventually go before any court. The FIU may simply decide not to apply to court for an extension of the freezing directive. If it does so under section 10(7)(a) of AMLA, this procedure is done ex parte, which means that the concerned party is still not formally part of the proceedings. Section 10(7)(b) allows the FIU to apply to court to further extend the freezing directive for another 180 days and there is no limit to the number of times that the FIU may make such applications. The whole process is done ex parte. The law can therefore allow the freezing directive to last indefinitely when coupled with the granting of the ex parte applications. And if a party wanted to apply to court to have the freezing directive revoked under section 10(9) of AMLA, it would be subject to the party receiving a statutory letter from the FIU and then complying with it first. There is therefore no guarantee that the party may even be heard if the party decides to institute proceedings, which it really shouldn’t have to – if a party’s civil rights were to be curtailed, this should be determined by an impartial and independent court and not through an administrative decision without any due process, which a party is then encumbered with and must now go to court to have revoked. But the essential point here is that a party may be prevented from disposing of its funds for an indefinite amount of time, without any hearing or opportunity to be heard.
That there are no proceedings commenced is not seen a barrier to the protection afforded by fair hearing rights, the European Court of Human Rights in the Golder case stated that the reasonable time for a hearing may become applicable even before any proceedings are instituted. In the case of Konig v Germany, the European Court of Human Rights took the view that time starts to run from the moment that a party takes objection to the administrative action made against the party. In that case, through an administrative decision, Konig had his authorization to practice medicine withdrawn. The court took the view that time started to run the moment that Konig, in accordance with the set process, lodged an objection to the administrative action taken against him. In this case, the court also took the view that the total duration of the proceedings; from the case at first instance up to the final hearing on appeal all counted when the court considered whether the proceedings took place within a reasonable time.
Although it is ostensible from the case law that time can start to run prior to the initiation of court proceedings, it is not made entirely clear what the trigger point is. Is it some act from the party objecting to the administrative action taken against him, as in Konig? Or is it the moment that it appears that there is a dispute as to a civil right or obligation of a party – as in Golder, when the Secretary of State for Health refused Golder’s request to consult a Solicitor. The problem with the Seychelles civil confiscation regime is that there is no mandatory process for a party to object to a 180-day freezing directive. A party has to wait until it receives the statutory letter, reply to it in full, and only then can they seek to challenge the freezing directive, and that is still subject to the FIU stating that their statutory letter has been replied to satisfactorily, which, in the author’s experience, rarely happens in practice. Perhaps, some insight into the matter can be taken from Konig case in which the European Court of Human Rights takes particular issue with the fact that the civil process was not allowed to progress by the tribunal of first instance as it awaited the outcome of a relevant criminal proceeding against Konig, this despite the fact that the tribunal knew that there were uncertainties surrounding the expeditious conclusion of the criminal proceedings. It was also not necessary for the civil tribunal to wait for the criminal process to conclude before continuing with its own processes. The European Court of Human Rights also remarked in Konig that:
“In an overall assessment of the various factors and taking into account what was at stake in the proceedings… the Court considers that… the investigation of the case was not conducted with the necessary expedition.”
Accordingly, the court should have regard to what is at stake and also whether the matter is being conducted with the necessary expedition. In certain cases, the funds of parties subject to the 180-day freezing directive comprises of the working capital of business entities, leaving the entities in a very dire situation. In the case of Financial Intelligence Unit v Cyber Space Limited, the court found that the amount of time that the Respondent’s funds were subject to a freezing order was inordinate. In his ruling in an application for Stay of Execution, Egonda-Ntende, CJ stated:
“(5) I was, initially, inclined to agree with the applicants that if the sum of money in question is moved and or otherwise removed from the account, and this appeal succeeds, with the Court of Appeal, granting a section 4 interlocutory order, the appeal would be rendered nugatory by the absence of the said funds.
(6) However when I considered the history of this case and long period of freezing prior to the commencement of this action by applicant, June 2010 to February 2012, 20 months, a period far in excess of six months now allowed by The Anti Money Laundering Act as amended by Act 24 of 2011, together with the fact that the respondent is an international company registered in Seychelles, and therefore amenable to the jurisdiction of this court, the balance of convenience tips in favour of not granting the stay of execution, as in effect it would be a perpetration of the continuation of freezing the respondent’s assets for a period much longer than anticipated in law without an order of court.
(7) The respondent, a business entity has for far too long been denied access to its funds.”
In this matter, the Chief Justice insinuates that the freezing directive should not be in effect for any more time than the 180 days (6 months). And therefore, if the FIU are unable to commence an action to confiscate the funds, for lack of concrete admissible evidence then they should forthwith withdraw the freezing directive instead of seeking extensions to further their investigations when in fact they are simply hoping that something turns up, this is surely not in line with the orbiter in Konig that the investigation of a case must be conducted with the necessary expedition.
One can therefore conclude from the above that the FIU’s power to direct a bank to freeze the funds held in an account for 180 days breaches one’s right to a fair hearing under article 19(7) of the Constitution. Section 10(4) of AMLA offends a party’s right of access to the courts to have a civil right or obligation determined and the process also offends the right of parties to have the entire process concluded within a reasonable time. Arguably, it is the 180-day period that overwhelms the threshold of what a determination of a civil right is and on one’s right to a hearing within a reasonable time.
Chapter 3: Does the 180-day freeze breach one’s Right to Property under the Constitution?
Article 26(1) of the Constitution states that every person has a right to “acquire, own, peacefully enjoy and dispose of property…”. This right is not absolute and article 26(2) of the Constitution states that the exercise of this right is “subject to such limitations as may be prescribed by law and necessary in a democratic society…”. Articles 26(2)(a) to 26(2)(i) particularizes the circumstances where the exercise of one’s right to property may be curtailed. Examples include where it is “in the public interest”, “for the enforcement of an order or judgment of a court in civil or criminal proceedings”, “in the case of property reasonably suspected of being acquired by the proceeds of drug trafficking or serious crime”. Property is defined under the Civil Code of Seychelles Act (“the Civil Code”) as being either movable or immovable. With immovable meaning land, buildings and fixtures attached to the land and everything else classified as immovable property including legal obligations and rights.
In this part, analysis will be given into whether the FIU’s 180-day power to freeze the funds held in a bank account offends one’s right to property under the constitution, with particular regards to whether it offends one’s right to peacefully enjoy and dispose of property.
The first issue that should be investigated is whether the temporary prevention of enjoying or disposing of one’s funds, which is the effect of a section 10(4) freezing directive under AMLA may be an infringement of one’s right to property as one may argue that the provisional measure does not permanently deprive a party from enjoying or disposing of one’s property. Article 1 of Protocol 1 of the European Convention on Human Rights, which concerns one’s Right to Protection of Property states that:
“Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.”
Both the European Convention and the Seychelles Constitution speak of peaceful enjoyment of one’s property. And so, to that extent, we can turn to the jurisprudence of the European Court of Human Rights. In the case of Sporrong and Lonnroth v Sweden, the applicants contended that the due to expropriation permits and construction prohibitions levied against their land by the Government, they were enable to construct any buildings, take any mortgages or sell their land at prevailing market rates, rendering their land quite useless and therefore preventing them enjoying or disposing their property. The Government contended that despite the restrictions, which were necessary due to town and country planning laws, the applicants could have still enjoyed and disposed of their property, even though the extent of the enjoyment was reduced. The European Court of Human Rights ruled that the prohibition on construction prevented the applicants from using their property. And the effect of not being able to use one’s property, even if not permanent in its effect, was contrary to the convention right of being able to peacefully enjoy one’s property.
Limitations as prescribed by law and necessary in a democratic society
But the Right to Property under the Seychelles Constitution allows that right to be restricted “subject to such limitations as may be prescribed by law and necessary in a democratic society…”. In the case of Durup & Ors v Brassel & Or before the Constitutional Court of Seychelles, Robinson, J, referring to the term ‘prescribed by law’ stated that it refers to “a restriction that may be imposed by law” and a law “which is adequately accessible to the citizen of this country and attains the level of certainty that is reasonable in the circumstances”. Accordingly, as the law already imposes the 180-day freezing directive under section 10(4) of AMLA, which is legislation and therefore adequately accessible, the greater part of our analysis must now focus on whether it is necessary in a democratic society.
In the Seychelles Court of Appeal case of the Seychelles National Party v Michel, the court, whilst referring to the jurisprudence from the European Court of Human Rights and the United Kingdom’s courts, stated that “what is necessary in a democratic society implies the existence of a "pressing social need"”. The court went on to state that “Strasbourg jurisprudence requires that any interference with article 10 must be "convincingly established by a compelling countervailing consideration, and the means employed must be proportionate to the end sought to be achieved.” In Durup Robinson, J stated that:
“[t]he European Court of Human Rights summarised the principles of the phrase ″necessary in a democratic society″ as follows: (a) the adjective ″necessary″ is not synonymous with ″indispensable″, neither has it the flexibility of such expressions as ″admissible″, ″ordinary″, ″useful″, ″reasonable″ or desirable …″; (b) …. (c) the phrase ″necessary in a democratic society″ means that, to be compatible with the Convention, the interference must, inter alia, correspond to a ″pressing social need″ and be ″proportionate to the legitimate aim pursued″... ; (d) those paragraphs of Articles of the Convention which provide for an exception to a right guaranteed are to be narrowly interpreted ….”
The Seychelles courts have therefore placed great persuasive authority on the jurisprudence of the European Court of Human Rights and elucidate the point that where a right may be restricted on the grounds that it is necessary in a democratic society, then any interference with such a right must be proportionate to the legitimate aim pursued. This principle is supported by Article 47 of the Seychelles Constitution, which states:
“Where a right or freedom contained in this Charter is subject to any limitation or qualification, that limitation, restriction or qualification - (a) shall have no wider effect than is strictly necessary in the circumstances; and (b) shall not be applied for any purpose other than that for which it has been prescribed.”
Seychelles jurisprudence has therefore embraced the principle of proportionality as the basis for the lawful restriction or limitation of one’s constitutional rights. This point was highlighted and hit home in the Seychelles Court of Appeal case of Trajter where Twomey, JA stated that given the similarities between the European Convention of Human Rights and the Charter of Fundamental Rights and Freedoms contained in the Seychelles Constitution the “test of proportionality must logically form part of our jurisprudence”. However, in that case, the court analyzed the principle of proportionality in the context of a judicial review case wherein the court stated that decisions of the Government must not be disproportionate and reasonable in the circumstances. The Seychelles courts, in the context of limiting a constitutional right have therefore not yet defined the concept of proportionality. But it is arguable, that we can draw guidance from the jurisprudence of the European Court of Human Rights, given the numerous references thereto by the Seychelles courts.
Margin of Appreciation v/s Zone of Proportionality
Lady Justice Arden, who sits on the bench of the European Court of Human Rights has stated that where a right may be limited as ‘prescribed by law and necessary in a democratic society’ for a specified purpose, typically, such as in the interest of national security, then any interference with the right is not a justified limitation merely because it fulfills the specified purpose, the limitation must also be a proportionate means of achieving that aim. Arden goes on to state that:
“In order to reach a view as to whether something is necessary in a democratic society for one of the specified reasons, and therefore proportionate, the interests of the individual have to be balanced with the rights of others or of the rest of the community. The word "necessary" can be read as implying that the rights of the individual can only be interfered with when this is strictly necessary and no more than is absolutely necessary. However, this is not how that expression works in practice. In some situations, the Strasbourg court will take the view that the national authorities are better placed to assess whether the interference is necessary when the interests of the individual are balanced with those of the community. The decision is then said to be within the "margin of appreciation" of the contracting state.”
Before delving deeper into the concept of proportionality, we should examine that of the ‘margin of appreciation’. Howell defines the the term as follows:
“[T]he state is allowed a certain measure of discretion in its administrative and judicial actions, the view being taken that individual states are best equipped to decide what constraints are needed in the state's best interest.”
“The term “margin of appreciation” refers to the latitude a government enjoys in evaluating factual situations and in applying the provisions enumerated in international human rights treaties.”
However, the concept of:
“the “margin of appreciation” examines the constitutionality of the limitation of a right from the standpoint of the international community. It determines the framework of factual and normative data whose existence allows the international community to provide considerable weight to the factual and normative determinations made by contracting state actors.”
Therefore, the margin of appreciation is a concept used by an international court, such as the European Court of Human Rights in establishing whether it should allow the state to determine, as it should be better placed to appreciate the local context, whether a restriction or limitation on a convention right is proportional or not rather. When a domestic court is tasked in determining whether a restriction or limitation on a constitutional right is proportional, it should do so whilst considering the notion of the ‘zone of proportionality’. Thus, where there are various measures open to the legislature that may satisfy the requirements of proportionality in a given circumstance, these various measures are referred to as the zone of proportionality. For example, one could argue that the 180-day freezing directive may be beyond the zone of proportionality when examining the purpose behind the directive and balancing it with one’s right to property. Perhaps, the zone of proportionality could be from ‘no freezing powers without a court order’ all the way to a 7-day freezing directive. It would then be open to the legislature to set the restriction or limitation within these parameters i.e. within the zone of proportionality.
Constitutional Limitations on Right to Property
The grounds for the 180-day freezing directive as provided for in section 10(4)(c) of AMLA may be made when:
“such a direction is reasonably necessary to enable the FIU to investigate whether or not there are reasonable grounds to suspect that the property represents the proceeds of or benefit from criminal conduct including an offence of money laundering and financing of terrorism.”
Article 26(2)(c) of the Seychelles Constitution allows restrictions on one’s Right to Property “in the case of property reasonably suspected of being acquired by the proceeds of drug trafficking or serious crime.” The AMLA provision therefore appears to infringe the grounds for the restriction to one’s right to property as provided for by the Constitution in 2 ways: Firstly, it allows the 180-day freezing directive merely on the grounds that the FIU requires it to investigate whether there could be reasonable suspicion as opposed to the existence of reasonable suspicion about the origins of the property, and secondly, the 180-day freezing directive can apply to criminal conduct as defined under AMLA, whereas the Constitution refers to ‘serious crime’. Section 3(9) of AMLA defines ‘criminal conduct’ as any act or omission, which, if a person is found guilty of, could result in a custodial sentence of 3 years or to a fine of Seychelles Rupees 50,000. In the Seychelles Court of Appeal case of Roy Beeharry v The Republic, it was stated that the seriousness of the offence depends significantly on the severity of the penalty. Although it may be unclear whether criminal conduct as defined under AMLA can qualify as ‘serious crime’ as per the Seychelles Constitution, it is clear that the relevant restriction on one’s right to property can only be limited where reasonable suspicion as to the origins of the property already exists. It is therefore arguable that it is a breach of one’s right to property for section 10(4) of AMLA to allow the 180-day freezing directive on the grounds that the FIU needs to investigate whether there may be reasonable suspicion as to the origins of the property. It is therefore arguable that any measure, even if temporary in nature, that prevents a party from enjoying their property where no reasonable suspicion exists as to the origins of the property is contrary to the Seychelles Constitution. At the very least, there must already exist reasonable suspicion as to the criminal origins of the property before any provisional or interim freezing measure can be applied.
The FIU may argue that in fact, despite the wording of section 10(4)(c) of AMLA, they only exercise their freezing directive powers at the moment that they form reasonable suspicion as to the legitimate origin of the property. They then require the 180-day freeze to investigate the matter to further support the reasonable suspicions they have and to prepare to file a case for the civil confiscation of the funds in line with POCA. It may even be possible that the wording of section 10(4)(c) of AMLA is later amended so that it is in line with article 26(2)(d) of the Constitution.
The principle in the Sporrong case, that the deprivation of enjoying one’s property for an extended amount of time is a breach of one’s right to property concerned measures that were in place for several years. It may therefore be argued that the 180-day freeze is but a blip in time compared to the facts in Sporrong and therefore, the provisional measure provided for under section 10(4) of AMLA does not infringe one’s enjoyment of property and therefore does not contravene one’s right to property under the Seychelles Constitution.
We must therefore analyze whether the 180-day freezing directive is proportional. In the case of S. v Makwanyane, the Constitutional Court of South Africa stated that:
“The limitation of constitutional rights for the purpose that is reasonable and necessary in a democratic society involves the weighing up of competing values, and ultimately an assessment based on proportionality.”
Clayton proposes a 3-tier approach based on the case of Sunday Times v United Kingdom, firstly, whether the interference complained of corresponded to a “pressing social need” i.e. whether the interference complained of is necessary in a democratic society; secondly, whether it was “proportionate to the legitimate aim pursued”; and finally, whether the reasons given by the national authority to justify it were “relevant and sufficient”. With regards to the first tier, there is little feedback from the Government, FIU or society as to whether there is a need, let alone a pressing social need, to freeze one’s bank account for 180 days.
In fact, there is significant opposition to the measure, banking, offshore incorporation agents, accountants and attorneys have spoken out against the 180-day freeze, stating that it is hurting the financial, banking and offshore business sector, and as a consequence hurting the Seychelles economy. With regards to the second tier, if the aim of the freeze is to investigate and obtain concrete evidence as to whether the source of the funds are legitimate or not, 180 days seems in excess of that, as hinted by Egonda-Ntende, CJ in the Cyberspace case. And with the appropriate lines of communication in place with foreign financial intelligence units, does it take 180 days to trace the source of funds? If, the FIU has no concrete leads then, regardless of what hunches they might have, they should withdraw the freezing directive. Take the example of a typical criminal investigation; if a suspect is arrested and brought to court, the court may remand the suspect into custody pending a police investigation, normally up to 14 days in Seychelles. If the police fails to garner admissible evidence when the initial remand period is up, then the court will have to release the suspect, even if the police might continue to harbour some suspicion on the suspect of committing an offence. The same limitations should apply on the FIU. Interestingly, the provisions with regards to right to liberty under the Seychelles Constitution, i.e. Article 18, provides for the limitation of the liberty of a person specifically for the purpose of investigating an offence, if we look at the constitutional limitations on one’s right to property, there is no limitation for the purpose of an investigation. Accordingly, the FIU should not be allowed to drag on a freezing directive for up to 180 days (let alone a day) with impunity. This is surely an abuse of power and a disproportionate measure if the aim was to conduct an investigation. With regards to the third tier, the FIU has often said to the author that they require the 180 days because they need it to conduct their investigations. That the funds come from all over the world and they have to liaise with numerous foreign and international organizations to track down the source of the funds. That they need it does not mean that it is relevant or sufficient; or more importantly, that it is “strictly necessary in the circumstances” as stated in the Constitution when it comes to the limitation of one’s constitutional rights.
Barak proposes of 4-tier test in analyzing whether a measure is proportional, these are (i) Proper Purpose - This seeks to examine the legitimacy as opposed to the legality of the restricting law, it looks at whether the means to achieve a purpose limits a constitutional right in a proper manner, more specifically, it looks at whether a law that limits a constitutional right is for a purpose that justifies such limitation, to that end, Barak refers to it as the threshold test. Its focus is on the law’s purpose rather than its consequences; (ii) Rational Connection - is the requirement that the means used by the limiting law fit the purpose the limiting law was designed to fill; (iii) The Necessity test requires that the limiting law be one that would least limit the constitutional right. It must be noted that Barak’s, as opposed to Clayton’s necessity test, is in line with article 47(2) of the Constitution, which requires that any restriction to a constitutional right be strictly necessary in the circumstances; and (iv) Proportionality Stricto Sensu (balancing), that requires “balancing the benefits gained by the public and the harm caused to the constitutional right through the use of the means selected by law to obtain the proper purpose”. We can see that the purpose of section 10(4) of AMLA is to enable the FIU to pursue its investigations whereas the constitutional restrictions on one’s right to property, as listed under article 26(2) of the Constitution does not provide for the limitation of the right for the purpose of conducting investigations. We can therefore argue that section 10(4) of AMLA already fails Barak’s proportionality analysis, in that it fails the first threshold test and therefore, no further analysis is required. Even if, for the sake of argument, the 180-day freezing directive can pass the first threshold test, it still struggles to pass any of the 3 remaining tests, just look at the Necessity test: is the 180-days strictly necessary in the circumstances to conduct an investigation? Most other jurisdictions with modern bill of rights only provide for freezes of up to 5 days.
It is therefore difficult to argue that the 180-day freezing directive does not contravene one’s Right to Property as provided for under the Seychelles Constitution.
Chapter 4: Changing the Law
The Seychelles legislative body is called the National Assembly. If the arguments in this paper convince any Member of the National Assembly that section 10 of AMLA should be amended then that member is free to propose a private member’s bill. Alternatively and more typically, the Executive may propose amendments to the AMLA. Amendments to AMLA may be passed by a simple majority vote of the Members of the National Assembly.
However, to amend the Charter of Rights in the Constitution to allow for section 10 of AMLA to be in line with it would require a sixty percent majority vote by referendum.
Another manner that could precipitate an amendment to AMLA is a declaration of incompatibility by the Constitutional Court of Seychelles and/or the Seychelles Court of Appeal on appeal from the Constitutional Court as provided for under Article 130(4)(b) of the Constitution. Where such a declaration is made, the court must then send a copy of the declaration to the President of the Republic of Seychelles and the Speaker of the National Assembly for corrective measures. Of course, before any court may rule on the incompatibility of a law, a person with locus standi must first bring a constitutional petition before the Constitutional Court citing an infringement of his/her rights. There is some argument as to whether locus standi should be interpreted narrowly to mean only someone whose rights are being infringed or whether any citizen of Seychelles can bring such an action given article 40 of the Constitution which states that it shall be the duty of every citizen to uphold and defend the Constitution and the law.
And if this paper does not influence any change in the law, it is hoped that the research contained herein can support the Seychelles lawyers in their legal practice in this area of the law.
Chapter 5: Epilogue
To sum up the points raised in this paper, there is significant jurisprudence that takes the position that any interim or provisional measure that prevents one from exercising one’s constitutional rights are generally not considered as an infringement of the right. However, the European Court of Human Rights, of which the Seychelles Courts have relied heavily upon for guidance, has taken the position that prolonged interim or provisional measures has a similar effect of a permanent measure and therefore can be seen as an infringement of one’s human rights. And as espoused in this paper, the 180-day freezing directive, as provided for by section 10 of AMLA, arguably offends one’s right to a fair hearing and one’s right to property, as provided for under the Constitution. It offends one’s right to a fair hearing because it seeks to prevent a party from having access to a fair and impartial tribunal and it offends the principle of having a civil right determined within a reasonable time. With regards to one’s right to property, it offends the Constitution in that it places a restriction on one’s right to enjoy and freely dispose of one’s property for the purpose of allowing the FIU to hold investigations, when the Constitution does not provide for such a purpose as a ground to limit one’s right to property.
However, the civil confiscation regime, which includes the freezing of funds held in bank accounts without a court order, appear to be popular with the masses. In August 2014, the FIU successfully confiscated funds from the proceeds of crime and returned them to victims. Praise was given specifically to the freezing directive as it purportedly prevented the fraudsters from clearing out the bank account. Abroad, Campbell points out that the civil confiscation regime has received favourable reviews in Ireland and notes that:
“It is evident from media reports and political discourse that civil forfeiture is seen as the most effective means of tackling the problem of organised crime in Ireland. For example, the Minister for Justice, Equality and Law Reform in 1998 spoke of ‘the outstanding performance and success of the Criminal Assets Bureau’ in hitting ‘serious criminals where it hurts most--in their pockets, bank accounts, fancy houses and fast cars’. Similarly, it was claimed in the Dáil that:
[t]he establishment of the Criminal Assets Bureau has been one of our success stories in tackling crime…. We have for the first time ever, a mass exodus of criminals from this jurisdiction. Criminals are on the run as never before. They have gone to ground overseas and elsewhere because their assets are being seized and their ill gotten gains, their motivation for committing crime, are being taken from them.
Furthermore, the Irish Times claimed in 2002 that the CAB has ‘virtually eradicated the top echelon of organised crime’ in this jurisdiction.”
King states that the rationale behind such civil confiscation regimes have important social factors that make them popular:
“The… rationale for the non-conviction based approach stems from the Latin
phrase ex turpi causa non oritur actio, that a person should not benefit from criminal wrongdoing. This ‘keeps faith with the vast majority of people who do not commit crime and who do meet their obligations to the community and act within the law generally’”.
King even goes on to make the sweeping statement that “”Tackling criminal activity is, of course, likely to be seen as a legitimate aim; the issue that is not so clear is whether the adoption of civil forfeiture is proportionate to that legitimate aim.”
‘Assembly approves new anti-money laundering law-New Financial Intelligence Unit to be set up’ Seychelles Nation (Seychelles, 18 April 2006)
‘Changes to anti-money laundering laws to boost watchdog’s efficiency’ Seychelles Nation (Seychelles, 23 December 2011)
‘Court returns funds from defrauded Swedish victim’ Seychelles Nation (Seychelles, 6 August 2014)
‘Search and investigations and the Convention’  18(5) E.L. Rev. 465
Y. Arai-Takahashi, The Margin of Appreciation Doctrine and the Principle of Proportionality in the Jurisprudence of the ECHR (Oxford Hart Publishing 2002)
Lady Justice Arden DBE, ‘Proportionality: the way ahead?’  Jul. P.L. 498
Aharon Barak, Proportionality Constitutional Rights and Their Limitations (Cambridge 2012)
Liz Campbell, ‘Theorizing Asset Forfeiture in Ireland’  71(5) J. Crim. L. 441
Richard Clayton and Hugh Tomlinson (eds), Fair Trial Rights (2nd edn, OUP 2010)
Richard Clayton, ‘Regaining a sense of proportion: the Human Rights Act and the proportionality principle’,  5 EHRLR 504
Paul Craig and Gráinne de Búrca, EU Law Text, Cases, and Materials (5th edn, OUP 2011)
Eastern and South Africa Anti-Money Laundering Group, Mutual Evaluation Report Anti-Money Laundering and Combating the Financing of Terrorism The Republic of Seychelles (ESAAMLG August 2008)
Financial Action Task Force, International Standards on Combating Money Laundering and the Financing of Terrorism & Proliferation The FATF Recommendations (FATF, February 2012)
Jean Howell, ‘The land and human rights’  Jul/Aug Conv. 287
Colin King, ‘Civil Forfeiture and Article 6 of the ECHR’ (2014) 34 Legal Studies 371
Nicolas Lavender, ‘The problem of the margin of appreciation’  4 EHRLR 380
Wouter H Muller, Christian H Kalin and John G Goldsworth (eds), Anti-Money Laundering International Law and Practice (John Wiley & Sons, Ltd, 2007)
 ‘Assembly approves new anti-money laundering law-New Financial Intelligence Unit to be set up’ Seychelles Nation (Seychelles, 18 April 2006) <www.nation.sc/article.html?id=213423> accessed 9 September 2014
 Open Letter from Mr Philippe Boulle SC, the then Chairman of the Seychelles Association of Offshore Practitioners and Registered Agents (SAOPRA) addressed to the Seychelles International Business Authority (5 October 2012).
 Established by the Philippines’ Anti-Money Laundering Act of 2001, s 7.
 Philippines’ Anti-Money Laundering Act of 2001, s 10.
 United Kingdom’s Proceeds of Crime Act 2002, s 335(1).
 Ibid, s 335(3) & 335(5).
 Ibid, s 335(6).
 Ireland’s Offences Against the State (Amendment) Act 1985, s 3.
 Liz Campbell, ‘Theorizing Asset Forfeiture in Ireland’  71(5) J. Crim. L. 441
 Alain Damais, ‘The Financial Action Task Force’ in Wouter H Muller, Christian H Kalin and John G Goldsworth (eds), Anti-Money Laundering International Law and Practice (John Wiley & Sons, Ltd, 2007)
 Financial Action Task Force, International Standards on Combating Money Laundering and the Financing of Terrorism & Proliferation The FATF Recommendations (FATF, February 2012)
 Damais (n 13)
 Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG) page on FATF website <www.fatf-gafi.org/pages/easternandsouthernafricaanti-moneylaunderinggroupesaamlg.html> accessed on 12 August 2014.
 Part of Recommendation 4 of the FATF Recommendations (n 14)
 Page 12 and part of Recommendation 4 of the FATF Recommendations (n 14)
 Page 12 of the ESAAMLG, Mutual Evaluation Report Anti-Money Laundering and Combating the Financing of Terrorism The Republic of Seychelles (ESAAMLG August 2008)
 Page 2 of the ESAAMLG Mutual Evaluation Report (n 19)
 As stated in the Anti-Money Laundering (Amendment) Act, 2008
 Page 55 of the ESAAMLG Mutual Evaluation Report. At the time, Recommendation 3 dealt with provisional measures (n 19)
 Page 12 of the ESAAMLG Mutual Evaluation Report (n 19)
 14th July 2008 issue of the Seychelles Official Gazette.
 6th December 2011 issue of the Seychelles Official Gazette.
 As stated on the Anti-Money Laundering (Amendment) Act, 2011.
 ‘Changes to anti-money laundering laws to boost watchdog’s efficiency’ Seychelles Nation (Seychelles, 23 December 2011) <http://www.nation.sc/article.html?id=233132> accessed on 14 August 2014
  SCCC 1
 (2013) SLR 329
 Schedule 2 of the Seychelles Constitution
 Article 6(1): “In the determination of his civil rights and obligations or of any criminal charge against him, everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law. Judgment shall be pronounced publicly but the press and public may be excluded from all or part of the trial in the interest of morals, public order or national security in a democratic society, where the interests of juveniles or the protection of the private life of the parties so require, or the extent strictly necessary in the opinion of the court in special circumstances where publicity would prejudice the interests of justice.”
 (1979-80) 1 EHRR 524
 Ibid, para 25 of the Judgment
 Golder (n 33) at para 35 of the Judgment
  SCCA 18
 (2010) 50 EHRR 37
 Ibid at para 75 of the judgment.
  QB 422
 Ibid at para 80.
 Konig v Germany (1978) 2 EHRR 170; Erkner and Hofauer v Austria (1987) 9 EHRR 464; and LeCompte, Van Leuven and De Meyere v Belgium (1981) 4 EHRR 1.
 Richard Clayton and Hugh Tomlinson (eds), Fair Trial Rights (2nd edn, OUP 2010)
 Ibid at para 11.334
 AMLA, s 10(7)(a).
 AMLA, s 10(7)(b).
  SCSC 102
 Ibid at para 2.
  SCSC 47
 Richard Clayton and Hugh Tomlinson (eds), Fair Trial Rights (2nd edn, OUP 2010) at para 11.334
 Micallef (n 37)
 Ibid at para 79
 Ibid at para 80
 Ibid at para 85
 Application no. 51591/99
  QB 422
 Ibid at para 81
 (1981) 4 EHRR 1
  2 AC 291
 Ibid at para 70
 Ibid at para 71
 Clayton and Tomlinson (n 49) at para 11.341
 Ibid at para 11.343
 Ibid at para 11.341
 Ibid at para 11.346
 Ibid at para 11.347
 Ibid at para 11.348
 Nordh v Sweden (1990) 69 DR 223
 Machatova v Sweden (1997) 24 EHRR CD 44
 Clayton and Tomlinson (n 49) at para 11.334
 Golder (n 33) at para 32
 (1978) 2 EHRR 170 at para 98
 Ibid at para 105
 Ibid at para 110
 Ibid at para 111
  SCSC 33
 Ibid, at para 5 to 7 of the ruling.
 Article 26(2)(a) of the Constitution
 Ibid, Article 26(2)(b)
 Ibid, Article 26(2)(c)
 Article 516 of the Civil Code.
 Ibid, articles 517 to 526.
 Ibid, articles 527 to 536.
 Ibid, article 529.
 (1983) 5 EHRR 35
 Ibid at para 58
 Jean Howell, ‘The land and human rights’  Jul/Aug Conv. 287, at page 296
 (2013) SLR 259
 Ibid at para 31
 Ibid at para 34
 (2010) SLR 216
 (2013) SLR 259
 Ibid at para 35
 (2013) SLR 329
 Ibid at para 20
 Lady Justice Arden DBE, ‘Proportionality: the way ahead?’  Jul. P.L. 498, at page 501
 Jean Howell, ‘The land and human rights’  Jul/Aug Conv. 287
 Ibid at page 289
 Aharon Barak, Proportionality Constitutional Rights and Their Limitations (Cambridge 2012)
 Ibid at page 418
 Y. Arai-Takahashi, The Margin of Appreciation Doctrine and the Principle of Proportionality in the Jurisprudence of the ECHR (Oxford Hart Publishing 2002)
 Barak at page 420
 Ibid at page 419
 Ibid at page 416
 Approximately £2,400 as of 1st September 2014.
 Seychelles Court of Appeal Case No. 11 of 2009. Judgment delivered on the 8th May 2009.
 (1983) 5 EHRR 35
 1995 (3) SA 391 § 104
 Richard Clayton, ‘Regaining a sense of proportion: the Human Rights Act and the proportionality principle’,  5 EHRLR 504
 Ibid, at page 511
 (1979) 2 EHRR 245
 Letter from Philippe Boulle SC (n 3)
  SCSC 47
 Article 18(2)(b) of the Constitution
 Article 47(a) of the Constitution
 Aharon Barak, Proportionality Constitutional Rights and Their Limitations (Cambridge 2012)
 Ibid, at page 245.
 Ibid, at page 246.
 Ibid, at pages 246-247.
 Ibid, at page 303.
 Ibid, at page 317.
 Ibid, at page 3.
 Ibid, at page 340.
 Boulle Letter (n 3)
 Article 94(1) of the Constitution
 Ibid, Article 86(1)(A)
 Ibid, Article 91(1)
 Ibid, Article 130(5)
 Public debate hosted by the Judicial College of Seychelles on the 13th August 2014 where Justice Anthony Fernando of the Seychelles Court of Appeal and Charles O’Mahony, Lecturer in Public Law of the National University of Galway, Ireland, held differing views on locus standi to challenge the constitutionality of a law.
 ‘Court returns funds from defrauded Swedish victim’ Seychelles Nation (Seychelles, 6 August 2014) < http://www.nation.sc/article.html?id=242584> accessed 10 September 2014.
 Campbell (n 12) at page 460.
 Colin King, ‘Civil Forfeiture and Article 6 of the ECHR’ (2014) 34 Legal Studies 371.
 Ibid at page 375
 Ibid at page 391
Mr Divino Sabino is an Attorney-at-Law of the Supreme Court of Seychelles who practices at the Law Firm of Pardiwalla Twomey Lablache. He is also the Secretary of the Bar Association of Seychelles, a Law Lecturer at the University of Seychelles, and on the panel of Arbitrators of the Shanghai International Arbitration Centre (SHIAC). He completed his undergraduate degree at the University of Warwick and was called to the Bar at Lincoln's Inn after completing the Bar Vocational Course at the Inns of Court School of Law, City University, London. He was awarded an LLM from Oxford Brookes University for this piece of research work.
Presented by Mr Matthew Nicklin QC at the Palaise de Justice on the 23rd October 2014 as the Guest Speaker part of an advocacy training provided by the Honourable Society of Lincoln's Inn to the Seychelles legal community.
It is a great honour to be asked to address the Bar Association of the
Seychelles. When I was looking at your Association’s website,
yesterday, I was alarmed to see that when Vernon Flynn QC
addressed you in March last year, it appeared from the photograph
that he did so wearing his QC robes and bands. As you can see, I took
you at your word to dress more casually.
The Islands of the Seychelles, together with Mauritius and Reunion
all have a rich history and a shared heritage with both France and the
UK. As you know, this means that your legal system shares influences
of both the English Common law and the French Napoleonic code.
You, of course, in the Seychelles are blessed with a constitution. I say
blessed because some in Great Britain will look upon that with envy.
It is a remarkable fact that, for a country that has bequeathed
constitutions to newly independent ex‐Commonwealth countries all
over the world, it does not have one itself. Those of you who follow
political developments in the UK will know that whether we should
have a constitution is a matter of some public debate at the moment,
and may well be a significant issue in the forthcoming election in
Traditionally, when one talks about the protection of fundamental
freedoms, one usually reaches for some entrenched constitutional
document; a text that embodies the basic and agreed values of a
nation. A text that is put beyond the reach of the meddling hands of
the government of the day.
In the UK we have constitutional conventions ‐ some better
understood and respected than others ‐ and since after the Second
World War, the European Convention on Human Rights. If you read
some of the excoriating criticism of the Convention in UK
newspapers, you’d be forgiven for thinking that we had no hand in
the document and that it was “imposed” on us by “Europeans”. In
fact, the British took a central role in drafting it. It was then regarded
as the minimum protection for human rights that any civilised
country could provide for its citizens.
Here in the Seychelles, your constitution is perhaps a model for those
who would wish the UK to adopt its own “bill of rights”.
It contains everything that you would expect to find in any
democracy worth of the name (and a few more beside). Along side
what might be thought to be the bedrock in terms of fundamental
freedoms ‐ the right to life, right to liberty, right to a fair and public
hearing, freedom of expression – your constitution has also
enshrined right to equal protection of the law, right to participate in
government, right of access to official information, the right to health
care and right to social security.
By any measure it is an impressive list of values by which to define a
nation and its people. It goes substantially beyond the rights
guaranteed by the US Constitution and the European Convention on
Human Rights. That is perhaps a reflection of the fact that your
constitution is a living document, the most recent iteration being that
of 1993. It might be said that the problem with the US Constitution is
that it is document captured and largely frozen in a moment in time.
Whatever the founding fathers thought of it in terms of a blueprint of
governmental power, I venture to suggest that they had little
conception of what life would be life 200 years later. Indeed, assessed
against delivery of fundamental freedoms, it wasn’t until 1865 that
slavery was abolished under the thirteenth amendment and women
had to wait until 1920 for the nineteenth amendment to give them
the vote. The self‐evident blessings of liberty took a little longer to
arrive for some Americans.
But, apart from this impressive list of rights under your Constitution,
the Pre‐Amble deserves some attention. I don’t know whether the
people of the Seychelles are generally familiar with these words, but
they are powerful and defining:
“Aware and proud that as descendants of different races we have learnt
to live together as one nation under God and can serve as an example
of a harmonious multi‐racial society;
Having attained national stability and political maturity despite the
pressures of a sadly divided world;
Desirous to build a just, fraternal and humane society in a spirit of
friendship and co‐operation with all peoples of the world;
Recognising the inherent dignity and the equal and inalienable rights
of all members of the human family as the foundation for freedom,
justice, welfare, fraternity, peace and unity; Reaffirming that these
rights include the rights of the individual to life, liberty and the pursuit
of happiness free from all types of discrimination;
Considering that these rights are most effectively maintained and
protected in a democratic society where all powers of government
spring from the will of the people;
Exercising our natural and inalienable right to a framework of
government which shall secure for ourselves and posterity the blessings
of truth, liberty, fraternity, equality of opportunity, justice, peace,
stability and prosperity…”
In those short sentences you can see the influence of the French
colonial past – Liberté, égalité, fraternité. There is also a nod towards
the Constitution of the United States.
But the English Common law has its indelible mark in these few
“Solemnly declaring our unswaying commitment, during this our Third
Republic, to uphold the rule of law based on the recognition of the
fundamental human rights”
If it is one thing that marks out the English Common law tradition
and its protection of fundamental freedoms it is respect for the rule
of law. The safeguards of liberty in a liberal democracy are respect
for the rule of law, an independent judiciary and free and fair
elections. Countries that do not respect the rule of law subjugate
their citizens to a form of tyranny ranging from benevolent
dictatorships to oppressive totalitarian regimes.
A necessary pre‐requisite of protection for fundamental freedoms is
an independent judiciary. They are all sworn to uphold the rule of
law. Something else that has been borrowed from the English
Common law is the judicial oath. Every Judge in the Seychelles upon
taking office swears or affirms in the following terms:
I do swear that I will well and truly serve the Republic of Seychelles in
the office of a Judge and that I will do right in accordance with the
Constitution of Seychelles as by law established, and in accordance with
the laws of the Republic without fear or favour, affection or ill will.
That is virtually identical to the oath sworn by all judges in the UK.
And note its terms. The oath of allegiance is not to the government of
the day; it is to the Republic of the Seychelles. In times of crisis (and
may you be spared them), it is the independent judiciary who are the
constant beacon that protects your fundamental freedoms.
In the UK, that safeguarding role is currently supported by two
sources. The English Common Law and, more recently, the European
Convention on Human Rights under the Council of Europe.
I regret to say, but it is quite clear, that without a constitutional
document, the common law, on its own, was not sufficiently powerful
to protect fundamental freedoms. It was good at some things;
freedom of expression and freedom from arrest for example were
cherished under the common law and the judges would jealously
guard those rights from encroachment from the legislature. However,
recognising that Parliament was sovereign and always bound by the
rule of law (and in the absence of a constitutional document), the
Judges had to give way to the express will of Parliament even if it was
felt to transgress these unwritten boundaries. An example from my
own area of law is the repeated failure of the UK courts adequately to
protect journalistic sources. Judicial interpretation of s.10 of the
Contempt of Court Act 1981, itself enacted to remedy an adverse
finding of the European Court of Human Rights against the UK
government, has been found by the Strasbourg Court not once, but
twice thereafter to fail to offer protection sufficient to meet the
requirements of Article 10.
In other areas, most notably privacy, the English Common law has
conspicuously failed to develop jurisprudence as sophisticated as
that which underpins the more familiar freedom of expression. The
English Common law approach to privacy was a patchwork of
unrelated torts ranging from nuisance, trespass, breach of
confidence, defamation and even malicious falsehood. There was no
unifying concept behind the development of these areas of law.
Consequently the protection for privacy in the United Kingdom has
had a very haphazard history. It is ironic to note that just at the point
when the UK implemented the European Convention of Human
Rights into domestic English law in 1998 (with the enacting of the
Human Rights Act) which included the Article 8 protection for
privacy, the House of Lords proclaimed that there was no such thing
as a tort of breach of privacy under English Common Law
(Wainwright –v‐ Home Office  2 AC 406).
The House of Lords in Wainwright were condemned by the European
Court of Human Rights for having failed to ensure English law gave
adequate and effective redress for breaches of the Wainwrights’
Article 8 rights (Wainwright –v‐ UK (2007) 44 EHRR 40).
Of course, fundamental freedoms, like freedom of expression, can
conflict with other freedoms. In my area of media law, there is an
interesting triangle between the right of freedom of expression, the
right to a fair trial and the right of privacy. The sides of the triangle
see each right come into potential conflict with the other two. The
results are interesting, but not yet fully explored. In the UK, we have
spent much time since the passing of the Human Rights Act
concentrating on the conflict between freedom of expression and the
right to privacy. In terms of fair trial and freedom of expression, the
debate lags somewhat behind and there remains a tendency of judges
to reach for the absolutist approach; an approach that is expedient
and clear, but lacks sophistication and understanding. It will change,
Where fundamental rights and freedoms come into conflict, the
answer is very rarely obvious. Debates become polarised by value
judgments. It has led to claims by the media that UK judges are
creating a privacy law “by‐the‐back‐door”. This is nonsense, of
course, but it made a good headline. The truth is that Parliament, by
enacting the Human Rights Act, and dropping (almost casually)
Article 8 into English domestic law expressly tasked the Judiciary
with moulding the Common Law to be consistent with the convention
jurisprudence on privacy. Parliament could have drawn up a fully
functioning privacy law, and enacted it. However, that task has long
languished in the “too difficult” box in Westminster. Attempts at
drafting a privacy law have repeatedly foundered, precisely because
striking the right balance between freedom of expression and privacy
is very difficult, and politicians have discovered that there is no
agreement about what should be protected by a privacy law. So
Parliament simply left it to the Judges to sort out.
What makes the axis between freedom of expression and privacy a
particularly difficult tension to resolve is that freedom of expression
was always a qualified right, just like privacy. No person can enjoy
perfect freedom to say anything she chooses, and no person can
enjoy absolute privacy. In any society these fundamental rights will
be in almost constant – perhaps daily ‐ conflict. More so than ever
now with the advent of social media and where a device more
powerful than any communication device hitherto invented can be
held in the palm of a hand.
Tweeting, for example, has led to a rash of cases in the UK involving
hate speech. We have had people given sentences of imprisonment
for tweeting what were on any view highly offensive messages
following the murder of a schoolteacher in Northern England earlier
this year (www.mirror.co.uk/news/uk‐news/ann‐maguire‐leedsteacher‐
tweets‐3512456). Real questions arise as to whether the law
ought to involve itself in speech like this, particularly to the level of
jailing people for what they say, not what they do.
The justification for invoking the criminal law in relation to speech
can only be to prevent crime, violence or disorder, not people’s, even
a society’s, sensibilities.
As Sedley LJ noted in Redmond‐Bate –v‐ Director of Public
Prosecutions (1999) 7 BHRC 375 , 382–383:
“Free speech includes not only the inoffensive but the irritating, the
contentious, the eccentric, the heretical, the unwelcome and the
provocative provided it does not tend to provoke violence. Freedom
only to speak inoffensively is not worth having.”
It is a vital part of freedom of expression that it includes the right to
say offensive things (subject only to the caveat regarding provoking
violence). This is particularly so in the context of literature and the
arts, but also, for example, in challenging religion. The rights of the
heretics to free speech are just as important as the devoted.
That brings me to criminal libel. I noted that in August your Court of
Appeal was required to determine whether the offence of criminal
libel was consistent with your Constitution (Sullivan –v‐ Attorney‐
General & Another, 14 August 2014). In light of what I have just said
about the need for the law to tread carefully when considering words
that cause offence, the facts of the case, as recounted by the Court of
Appeal are interesting :
“The events occurred as the result of the pollution of a river course by a
building contractor, Ascon, engaged to construct the palatial residence
of Sheikh Khalifabin Zayed Al Nahyan, the President of the United Arab
Emirates and prince of Abu Dhabi. Over 350 households, unable to
drink water from their taps due to the pollution, filed for compensation.
Minister Joel Morgan, then of the Ministry of Home Affairs,
Environment, Transport and Energy chaired a high level committee
responsible for the negotiations for compensation for the affected
residents. During the course of these events, the appellant, a property
owner at La Misère, dissatisfied with the role played by the Minister in
those negotiations caused a photograph of the Minister to be enlarged,
a Hitler moustache pasted above his mouth and the word “Traitor”
inserted at the bottom of the photograph. The photograph was
displayed on the back windscreen of his vehicle as he travelled on the
public road on 20th October 2010.He was arrested at 1338 hours and
detained until 1433 hours the following day. He was charged on the
23rd December 2010 with the offence of criminal defamation and the
trial set to commence on 26th September 2011 in the Magistrates Court.
The trial did not proceed as the Appellant filed a petition before the
Constitutional Court for a declaration that the offence of criminal
defamation was unconstitutional.”
The Court decided that the provisions of the Penal Code relating to
Defamation were not unconstitutional. Many countries, including the
UK (but only very recently since 2010) have repealed criminal laws
relating to defamation, leaving only civil remedies. But that is a value
judgment which each state is entitled to make for itself. It does not
mean that the continued adherence to criminal sanctions as the
means whereby the state seeks to strike the balance between
privacy/libel and freedom of expression is necessarily wrong. As
your Court of Appeal observed :
“The ECtHR seems to stress the role of criminal libel in guaranteeing
public order which is quite a different prospect from protecting
reputations. This would fit within the context of article 29 (2) of the
Universal Declaration of Human Rights and article 9 of the European
Convention on Human Rights that is, that the state should only
intervene to limit human rights when these are in the interest of public
order, health or morals, or for the protection of the rights and freedoms
Indeed, what the case exemplifies is that, in drawing the line between
freedom of expression and the right to reputation (which the ECtHR
has held to be a dimension of the privacy right), there are different
ways of achieving the objective, all of which fall within the
permissible margin of appreciation. As with a number (perhaps even
a majority) of European states that are signatories to the ECHR, the
balance between reputation/privacy and freedom of expression can
be struck, at a national level, by invocation of the criminal law rather
than leaving individuals to pursue remedies in the civil courts. It
would even satisfy the ECHR if a state decided to strike that balance
through regulatory measures entirely outside the legal system
(providing always that such measures were “prescribed by law” and
were sufficiently certain). The acid test of the compatibility of the
domestic law (whether criminal or civil) was whether it was
necessary in a democratic society and proportionate to the aim
 When we apply the proportionality test both in the sense as
outlined in the ECtHR cases and in the Nyambirai (supra),it is our
considered opinion that the offence of criminal defamation in
Seychelles is so narrowly framed considering the elements that have to
be proved and the defences that exist, that it accomplishes the
legislative objective of the obligation without encroaching
unnecessarily on the fundamental right to freedom of expression. We
have already outlined above the extremely strict and narrow confines
of the offence and the ingredients that must be proved beyond
reasonable doubt by the prosecution, including the proof of an opinion
not honestly held in good faith by an accused person. It is clear that one
can only be prosecuted for the offence in very limited
The Court noted that there were additional safeguards for any
defendant who was prosecuted. Unlike civil defamation where the
burden lay on the defendant to prove the truth of his claims, in a
criminal prosecution the burden of proof (to the enhanced criminal
standard) lay always on the prosecution. A factor the Court of Appeal
also considered important was the prosecutorial discretion. Whether
the public interest required the prosecution of the Defendant would
be a factor in the decision to prosecute and was therefore an
It is, of course, right to note (as your Court of Appeal Judges noted in
Sullivan), that in the common law tradition, criminal libel was
directed at curbing threats to public order that arose from
provocative speech that was calculated to lead to a breach of the
peace. When understood in this context, the maxim, ‘The greater the
truth, the greater the libel’ can be better understood. If speech
threatened good order, then uttering truths was likely to be more
effective in that aim than uttering falsehoods. The key distinction
between criminal and civil libel was that whereas the former
concentrated on the potential for the words to incite public disorder,
the latter concentrated on the damage to reputation (where, of
course, truth was critically relevant).
There are echoes of that which remain in your Penal Code.
Prosecutions for defamation in relation to defamation of the dead
may only be instituted with the consent of the Attorney General. That
restriction is rooted in the heritage of criminal libel. The reputation
of the dead person is, to the deceased, entirely irrelevant. The evil the
legislation is addressing is the capacity for libels of the dead to
provoke public disorder amongst the living. It is interesting to note
that the ECtHR last year decided that libelling the deceased may
represent an interference with the privacy rights of the deceased’s
family (Putistin –v‐ Ukraine (application no. 16882/03)). It is not
hard to imagine why. But that is a dimension of protecting the
privacy rights of the living, rather than the protection of the Article 8
rights of the deceased.
So let me conclude by offering you some thoughts as to the
reconciling of fundamental freedoms when they come into conflict. I
have referred earlier to the fault‐line between freedom of expression
and the right to privacy/reputation. The House of Lords sought to
provide guidance to Judges on this difficult balance in Re S  1
AC 593 at :
“First, neither [right] [article 8 or 10] has as such precedence over the
other. Secondly, where the values under the two articles are in conflict,
an intense focus on the comparative importance of the specific rights
being claimed in the individual case is necessary. Thirdly, the
justifications for interfering with or restricting each right must be
taken into account. Finally, the proportionality test must be applied to
Those simple rules set out what has become to be known as parallel
analysis. You take the conflicting provisions of the Convention or
Constitution. You then look at the extent to which they are qualified
and, where they are, you measure the extent of the interference with
each right and the justification for it and carry out the ultimate
assessment of where the balance lies.
Approached in this way, Courts can carry out a logical, systematic
and principled approach to weighing conflicting fundamental
freedoms. That is not to say that the exercise is simple; it isn’t. But
done carefully and critically, it is most likely to produce the right
outcome and also, when explained, likely to be understood by the
citizens of the relevant state.
Mr Matthew Nicklin QC is a Barrister who practices at 5RB Chambers in London, UK. He completed his undergraduate degree at the University of Newcastle Upon Tyne and was called to the Bar at Lincoln's Inn. He is a frequent contributor on media law for radio and television. He has twice been awarded the Chambers & Partners Defamation & Privacy Junior Barrister of the Year.
Presented by Mr Divino Sabino at the 3rd Legal Forum on China-Africa Co-operation (FOCAC) was held on the 6th and 7th of December 2012 at the Grand Baie International Conference Centre in Mauritius.
One of the recent key developments with regards to International Civil and Commercial Relations has to do with the sharing of tax information on cross-border or multi-jurisdictional investigations or intelligence gathering. One of the key aims with regards to the sharing of tax information between States is to crack down on the ability of entities to reduce or negate its tax liabilities to the State. This prevailing culture of tax savvy entities reducing or eliminating its tax liabilities results in Governments collecting less revenue, consequently, Governments cannot spend as much as it would wish to and it is argued that the net effect of this is that there are Government restrictions on spending where funds are most needed, for example, in the health or education budget. Tax reduction or elimination measures also foster discontent and scorn amongst the proletariat, who feels resentful of the fact that they pay their taxes yet others, and generally those of considerably better means, do not pay the taxes that they should. Accordingly, the international community has sought to pressurize or influence countries to adopt measures that combat against these tax reduction or elimination measures.
In my presentation today, I will talk about one of the key instruments used by the international community to combat tax reduction or elimination measures, in particular I will talk about the framework of the multilateral co-operation agreement on the sharing of tax information; specifically I will briefly look at Convention on the Mutual Administrative Assistance in Tax Matters. I will also look into the developments and effects of anti-money laundering measures that jurisdictions have and are adopting. Finally, I will look into how this legal regime affects investors and consequently international relations. But first, let us look at the current regime on tax avoidance mechanisms or “wealth management”, as some people in the industry prefers to call it.
Tax Avoidance or Wealth Management: How It Works
Tax avoidance mechanisms have existed for many hundreds of years, the Trust, a device created by the English Courts of Chancery, with their equitable jurisdiction, allowed for the legal ownership of a right to be held by one person, hitherto referred to as a trustee, on behalf of and for the ultimate benefit of another, hitherto called the beneficiary, whose identity is often not present in any formal or official legal document. This structure was often used by those knowledgeable in tax laws to devise a manner of ways to completely avoid paying tax. For example, upon the death of an individual, certain taxes had to be paid by that individual’s heirs in conveying any immovable properties to themselves. However, these taxes could be entirely avoided if the properties were held by a company on trust for the individual and then on trust to the heirs upon the death of the individual. Now, because it is the company that is the legal owner of the land and remains so, no death taxes are paid when the beneficial interest on the land is transferred.
The above is but an overly simplified example of how the Trust device coupled with the use of a corporate entity can be used to completely avoid the payment of tax. Of course, changes in the British laws have sought to combat this manner of tax avoidance, and the specifics of that are beyond the scope of my presentation. But as you may have no doubt discerned, laws can be put in place to combat tax avoidance measures. And therein lies the dilemma, because at the end of the day, it is because of the existing tax laws, and in particular the deficiencies of these tax laws, deficiencies that are usually only discernable to those who wish to avoid the payment of the tax, that loopholes, as some call it, are taken advantage of, resulting in successful tax avoidance.
Today, the business of tax avoidance or wealth management is a big one. The offshore industry, offshore financial services or tax havens are some of the terms used to describe jurisdictions which have laws that allow for the creation of Trusts, corporate entities and other legal personalities that do not have to prepare audited accounts and whose owners are not recorded in any public registry. These entities are the vehicles of wealth management and some of the cleverest people in the world trawl through tax laws looking for loopholes so that their clients need not pay any or much taxes. Now, before I go on, I must also point out the alternate view to tax avoidance. There are many individuals who feel that their Governments are wasteful of tax revenue or whose Governments have individuals who plunder the Government coffers, accordingly, many of these individuals behind tax avoidance schemes believe that they are justified in not paying taxes to their Governments, they believe that they can contribute to their communities in other manners, such as charitable projects under their direction or under the control of people or organizations that they trust. But I am not here to talk about the merits or lack thereof, of tax avoidance schemes.
The OECD Global Forum
In 2001, the member countries of the Organization for Economic Co-Operation and Development, often referred to simply as the OECD, established the Global Forum, whose purpose was to develop international standards of transparency and exchange of information for tax purposes. In 2009, in response to the G20 leaders’ call for jurisdictions to adopt high standards transparency and exchange of information in tax matters, the Global Forum agreed to promote and implement such standards through the peer review of all of its members. The Global Forum now includes over 116 member jurisdictions and the European Union, it is therefore the largest tax grouping in the world. Eventually, the impetus led to amendments being made to the Convention on Mutual Administrative Assistance in Tax Matters (“the Convention”) , which came into effect on the 1st of June 2011.
In the preamble to the Convention, signatories applaud efforts to combat tax avoidance and evasion on an international level, whether multilaterally or bilaterally. Here, the distinction between tax avoidance and tax evasion does not appear to be addressed, although tax avoidance - the act of planning one’s affairs to minimize one’s tax liability, is lawful and tax evasion – that of hiding one’s taxable income from the revenue authorities, is unlawful. The signatories to the Convention have agreed that they will assist one another in the exchange of tax information, the recovery of taxes and on the service of documents. Presently, there are only 42 states that are signatories to the Convention, of which only 3 are African, these are Ghana, South Africa and Tunisia. But with the increasing pressure from the international community, the numbers of signatories are expected to rise, indeed, in the past year and a half, the Convention welcomed 15 new signatories. Now, for businesses and this includes investors, who ensure that they comply with local laws on accounting standards and practices and ensure that they pay their taxes in line with the law, there should be no problems. But care must be taken to ensure that tax advice is taken from legitimate accounting and/or legal professionals. In many jurisdictions, judges are adopting purposive views on tax legislation, and mechanisms that appear artificial and whose sole aim is defeat tax laws may not find favour with the judges. This means that circumstances may arise whereby a party may believe that their dealings are above board and in line with the law but then the courts may rule otherwise.
The Convention further allows a member state to request that another member state take measures to recover tax due to be paid by an entity in the requesting State. So that if an investor is adjudged to be owing taxes say in the United Kingdom, the United Kingdom authorities may request that another member state pursue that investors’ assets in that other member state to recover the investor’s tax liability to the United Kingdom. This is therefore a powerful incentive for an investor to ensure that any tax planning mechanisms that he or she enters into is lawful in the jurisdictions that it may be liable to pay taxes in.
Tax Information Exchange Agreements (“TIEAs”)
Although I have placed much emphasis on the Convention, it is by no means the only instrument that binds jurisdictions into sharing tax information with other nations. Many arrangements are done on a bilateral basis; there are a great very many TIEAs. For example, although Seychelles is not a signatory to the Convention, it has TIEAs with 6 European countries. The People’s Republic of China has TIEAs with Argentina, Bahamas and Bermuda, the latter two being well known as tax havens. Our hosts, Mauritius, have 7 TIEAs.
The Rise of Anti-Money Laundering Measures
An investor must also be wary of the manner in which he or she funds his or her business projects. Strict regulatory controls are being implemented throughout the world and Africa is no exception. Proof of the source of funds is a minimum requirement to deposit funds into a bank account and greater suspicion is cast by the banks on large cash deposits or incoming transfers from institutions or organizations which show no identification information on the remitter of the funds. Proofs of the identity of the ultimate beneficiaries behind corporate entities are also now becoming the norm.
The Financial Action Task Force (“FATF”)
FATF is an inter-governmental body established in 1989 by the Ministers of its member states. Its mandate is to set standards and promote effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and the financing of proliferation, and other related threats to the integrity of the international financial system. In order to combat money laundering and terrorist financing FATF has come up with 40 recommendations and an additional 9 special recommendations that it expects members and associate members to implement. There are 36 member states, which includes People’s Republic of China and only one state from Africa, which is South Africa. The associate members comprise of regional blocks of which many other countries are grouped into, most relevant to Africa are the Eastern and Southern Africa Anti-Money Laudering Group (“ESAAMLG”), of which Mauritius and Seychelles are members, amongst a dozen states, then there is the Inter Governmental Action Group against Money Laundering in West Africa (“GIABA”) and then the Middle East and North Africa Financial Action Task Force (“MENAFATF”).
The FATF 40 + 9 Recommendations
It is beyond the scope of this presentation for me to go through the 40 + 9 recommendation of the FATF. But key examples of some of their recommendation are that countries adopt laws to criminalize money laundering, which in is defined as concealing the source of one’s funds at its simplest, but depending on the definitions adopted by individual jurisdictions can be very widely defined to include any proceeds or any of material or economic benefit that one may obtain that is derived from or suspected to be derived from criminal activity. Criminal activity must also be defined by each individual jurisdiction and this can also be defined very widely. For example, it can include tax liabilities concealed from the tax authorities, so that tax evasion also triggers the crime of money laundering. Other measures that countries are expected to adopt are the creation of a national Financial Intelligence Unit to gather information and combat money laundering activities. Countries are also expected to adopt mechanisms whereby the State may confiscate funds believed to be the proceeds of crime, even though no one has been convicted of any criminal offence, but where such persons or entities cannot provide proof of that their source of funds are legitimate. There are also increasing measures requiring more information from corporate entities as to the individuals behind them. And failing to comply with any of these regulations can result in stiff penalties in the form of fines or custodial sentences. Some of the recommendations also make it a legal obligation for certain parties, deemed as reporting entities, to report suspicious behavior to the Financial Intelligence Unit, the failure of reporting entities to do so can result in severe sanctions against the reporting entities. And in most if not all cases, banks, corporate service providers, accountants and lawyers are reporting entities under the law, so that one’s own bank, accountant or lawyer is legally obliged to report their own client’s to the authorities if they suspect any wrongdoing, even if the client may not believe that they are doing anything wrong.
An investor must ensure that he acts adroitly and in accordance with a country’s anti-money laundering laws. Sources of funds to undertake a business project must be clearly established as legitimate. The outward transfer of funds may is also monitored by the local laws so that an investor must ensure that his outflows go into legitimate beneficiaries or holding companies, as the case may be. Falling foul of a country’s anti-money laundering laws can not only result in time consuming litigation before the courts, which can stall investment projects, but the mere fact that an investor is being taken to court by a State or the State’s Financial Intelligence Unit, can damage the reputation of the investor and bring the entire enterprise to a grinding halt.
In order for an investor to guarantee that he does not act in a manner that contrary to the laws of a country, an investor must ensure that he is informed about a country’s legal framework. The best way that this should be done is to always engage local lawyers to undertake due diligence before embarking into investments and also during the investment process. Lawyers’ fees may be costly, but as I have noted above, it would be far more costly to break a country’s laws even if it is done unwittingly or unknowingly. If legal proceedings were to be commenced against an investor, it is no doubt that this may cause strain and tension between the nationals of the host state and the investor, and possibly other interested jurisdictions.
Bibliography and Sources
FATF, FATF IX Special Recommendations October 2001 (incorporating all subsequent amendments until February 2008)
FATF, International Standards on Combating Money Laundering and the Financing of Terrorism and Proliferation, The FATF Recommendations, February 2012, FATF
OECD, Global Forum for Transparency and Exchange of Information for Tax Purposes, Tax Transparency 2012 Report on Progress, OECD
OECD Website, www.oecd.org
Young, M, Ensuring the integrity of tax systems, STEP Journal, October 2012 Vol 20 Issue 8
Mr Divino Sabino is an Attorney-at-Law of the Supreme Court of Seychelles who practices at the Law Firm of Pardiwalla Twomey Lablache. He is also the Secretary of the Bar Association of Seychelles and a Law Lecturer at the University of Seychelles. He completed his undergraduate degree at the University of Warwick and was called to the Bar at Lincoln's Inn after completing the Bar Vocational Course at the Inns of Court School of Law, City University, London.
Presented by Mr Divino Sabino at the Legal Seminar on issues arising from Economic, Trade and Investment Cooperation between China and African countries which was held in Xiangtan University at Hunan Province from the 16th to the 20th of September 2012.
The Seychelles is a group of some 120 islands located in the Indian Ocean some 1,500km east of Kenya. It has a population of about 90,000. As Seychelles had no indigenous population, the current Seychellois are composed of people who have immigrated to the island. The largest ethnic groups are those of African, French, Indian, and Chinese descent. French and English are official languages along with Seychellois Creole, which is primarily based upon French. Its capital is Victoria which is located on the island of Mahé and over 75% of the population resides thereon. Seychelles is popularly known as an exclusive tourism destination, and in recent times, Prince William and Kate Middleton honeymooned in Seychelles. Seychelles has also come to the frontline of media attention due to the ongoing scourge of piracy within and close to its territorial waters.
Seychelles’ economy has traditionally been based on agriculture and fishing. However, numerous business and financial legislation enacted in the past 15 years have projected Seychelles into the international limelight as a competitive and forward-looking offshore business centre and also attracted significant foreign direct investment (“FDI”), especially in the tourism and real-estate industry.
In 2010, the Gross Domestic Product (“GDP”) of the country was Seychelles Rupees 11,621,300,000, which is equivalent to around USD 960 million at the time. Official figures have the GDP per capita at about SR 130,000, which is around USD 10,700.
Legal System & Profession
Seychelles was under successive French and British colonial administrations and became independent from Britain in 1976. It thus inherited a unique mixed legal system. Much of the private law is based on the French Napoleonic Codes, although the company law and other modern aspects of commercial law are inspired by English law. Public law is modeled on English law, as is much of the adjectival law. English is the language of legislation and the courts. The Seychelles legal profession is fused and lawyers are known as an attorney-at- law. There are a handful of law firms, but the majority of lawyers are sole practitioners. Most lawyers are trained in England, although the requirement of a two-year pupilage in Seychelles serves to ensure that they are also trained in the specificities of Seychelles law. Increasingly, Seychelles lawyers are outfitting their practice to service the growing needs of offshore business clients.
As a measure to encourage and facilitate FDI, the Government established the Seychelles Investment Board (formerly the Seychelles Investment Bureau) (“SIB”), as a first port of call and guide to potential onshore investors. Potential investors may make proposals to the SIB who may advise on the feasibility of the proposed projects and who may guide the investor on the next steps they should take for the project to come to fruition. Tax concessions to investors, has been decisive in attracting a number of international hotel chains, such as Four Seasons, Le Meridien & Berjaya, and developers of integrated resorts scheme (“IRS”) to Seychelles over the recent years. The IRS schemes target high net worth individuals from South Africa, Europe and the Middle East seeking a second or holiday home. The purchase of the luxury villas or apartments in the IRS is now the surest way for foreigners to acquire residential property in Seychelles, which is otherwise permitted sparingly by the Government. IRS residence purchasers and their families are entitled to Seychelles residency on fulfillment of certain formalities.
Laws have also been enacted, such as the Seychelles Investments Act 2010 (“SIA”) to ensure that foreign investors are given fair and equitable treatment. The SIA also ensures that investors’ property rights are protected by ensuring that investments are never directly or indirectly nationalized or expropriated by the Government. The SIA also goes on to ensure that investors are freely able to transfer their profits out of the jurisdiction. Under the SIA an Investor is defined as any legal person who carries on or intends to carry on an investment. An investment is defined as any contribution made by a person to start or expand any economic activity in the country. And so the protection afforded by the SIA to Investors are not only limited to those who initiate or commence an Investment, but it also extends to those who later on decide to come in and help invest into the Seychelles economy. For example, Etihad airlines recently acquired a 40% stake in the Seychelles national air carrier - Air Seychelles. Accordingly, Etihad is now an Investor under the SIA. Etihad’s Investment is therefore protected under the SIA. Other inherent and/or contractual rights and obligations which the Investor may have had would still remain in place, but the SIA provides an extra measure of protection for the Investor.
In addition to the protection afforded by the laws above-mentioned, the Investor may also obtain further benefits and/or protection if the Investor’s country of origin has entered into any investment treaty with the Government of Seychelles. These investment treaties can provide further protection for the Investor and even additional benefits. For example, the Seychelles signed a reciprocal promotion and protection of investments treaty with the Government of the French Republic. This allows investors, as defined in the treaty as any legal person constituted in either of the contracting state, certain benefits such as Most Favoured Nation treatment, which means that French investors must not be less well treated than investors from any other country, for example, if a concession was allowed for Arab investors then the French investor must be afforded with the same level of concessions. This treaty goes on to state that any dispute that a French investor may have against the Government of Seychelles for its acts or omissions must be settled through arbitration through the International Centre for the Settlement of Investment Disputes (“ICSID”), of which both France and Seychelles are members. ICSID is a forum where investor disputes against states are handled and is considered as one of the more respected and independent forums for such arbitration. And so the treaty provides for disputes to be handled at ICSID and this applies even though the French investor and the Government of Seychelles may have an existing agreement that has differing provisions on how disputes must be settled.
The Government of Seychelles has shown an inclination to enter into more investment treaties with other countries in the hope that it can increase FDI into the country.
Settlement of Disputes
A prudent investors will look into the possibility of something going wrong when they invest in anything. Inevitably, the investor will have to concern itself with the issue of where disputes will be heard. In general, most foreign investors decide not to allow disputes to be held in the courts of the country they invest in, this is because there is a perception that the host country’s courts may be biased towards the host Government, to the detriment of the investor. Accordingly, it is increasingly common in most investment agreements that any dispute must be settled by arbitration and at an arbitral tribunal outside of the host country. An investor must therefore concern himself about the various avenues open to him and also on whether such foreign tribunals can bind the country and/or the entities of that country that it may have to litigate against. As mentioned earlier, Seychelles is a member of ICSID and so the state would be bound by any arbitral decisions that may come out of ICSID. However, an investor may also be contracting with Seychelles private entities, these private entities would be outside the reach of ICSID. The parties may agree to resolve any differences through arbitration, however, Seychelles is not a party to the New York Convention on the Enforcement of Foreign Arbitral Awards. Very briefly, this convention provides for arbitral awards from any of its member states to be enforceable in other members’ states. As Seychelles is not a party to this convention then this would not apply to it. However, Seychelles own laws allows for arbitral awards from the UK to be enforceable in Seychelles, therefore it is not uncommon to find clauses in Seychelles agreements that provide for disputes to be heard at the London Court of International Arbitration as these decisions are easier to enforce in Seychelles. However, Seychelles law also allows foreign court judgments to be enforceable in Seychelles and arbitral awards from non-UK countries that may be registered as a foreign court judgment, and hence obtain the same status as a foreign court judgment, may be enforceable in Seychelles.
Offshore business has shown a robust and steady growth over the past 15 years. The Seychelles International Business Authority (“SIBA”) is the regulator of the offshore business industry and also acts as the registrar of the various Seychelles offshore business entities. Of these, the Seychelles International Business Company (“IBC”) has become very popular and in a particular with investment professionals worldwide, largely because of its tax exempt status, the anonymity it affords to its directors and members and also the speed at which it may be incorporated (generally within 24 hours). The IBC is used in tax mitigation structures and together with the Seychelles International Trust or Foundations, as a vehicle for wealth protection. Seychelles is party to an expanding network of double taxation avoidance agreements (“DTAA”). These include the much valued DTAAs with Indonesia and China. The tax-resident Companies with Special Licence (“CSL”) created under the Companies (Special Licences) Act 2003 is the ideal vehicle to enable investors to benefit of the tax relief under these DTAA. The CSL are liable to Seychelles business tax at a flat rate of 1.5% on its taxable worldwide income. The CSL are popular as holding companies to businesses concerns in Indonesia and China. The agents for incorporating and maintaining IBCs, International Trusts and Foundations are called Corporate Service Providers (“CSP”), these are corporate entities that are licensed and regulated by SIBA. Presently there are around 50 CSPs.
Securities and Funds Industry
The Securities Act 2007 and the Mutual Fund and Hedge Fund Act 2008 have laid down the foundations for Seychelles to tap into the equities and securities markets, including rigorous regulatory control of such activities. For the past 5 years the Government of Seychelles has privatized a number of previously state-owned enterprises. It is hoped that the continuing process of privatization will contribute to the securities trading industry within the country.
The Securities Act 2007 creates a regulatory authority whose function is to license and facilitate the market players in the securities industry. Therefore the planned stock exchange would be run by a private entity licensed by the regulator. The clearing agents, securities dealers and investment advisers are the other licensable players in the securities industry. To date, the regulator has only granted a few applicants with licenses, however, the stock exchange is expected to commence its activities late in 2012 and it is expected that the number of applicants would increase to cater for this up and coming industry. Licensing exemptions also exist for foreign securities dealers from recognized jurisdictions.
The Mutual Fund and Hedge Fund Act 2008 provides for the creation, licensing and regulation of funds. Funds may take the form of a company, unit trust or partnership and must be run by a licensed Fund Administrator. Licensing exemptions may apply to foreign fund administrators. Such funds may trade outside of Seychelles and benefit through being licensed and regulated in Seychelles. These funds may also be used by multiple individuals and entities to pool their resources together and can be used as a vehicle for investments both locally and abroad.
Deregulation & Consumer Protection
The Licences Act 2010 has sought to deregulate several areas of trade which were previously the subject of stringent licensing requirement with a view to increase open market competition. However, to ensure high standards, fair competition and trading laws coupled with tougher consumer protection legislation has placed an onus on businesses to be more transparent in their dealings with the public especially in relation to the quality of goods and services on offer. To ensure compliance, the law provides for rigorous enforcement mechanism. The Government has been moving towards making it easier for entities to enter into the business environment. To that end, the Government has been working for Seychelles to join the World Trade Organization and has now reached an advanced stage of negotiations and compliance.
The Seychelles communications infrastructure has improved significantly over the past few years. There are direct air links to Abu Dhabi, Doha, Dubai, Addis Ababa, Kenya, South Africa and Mauritius. And there are plans to open direct routes to China. Port Victoria is a forward looking sea port and caters to re-fueling services for vessels en-route to south east asia from the west and vice-versa. Already, a large area of land has been dredged close to the current port location to cater for vast expansion plans. Seychelles has therefore been continuously improving upon both its sea and air links.
In May 2012, Seychelles was connected to global fibre optic submarine cable system. Seychelles was already connected to high speed internet through satellite technology but the recent connection to undersea fibre optic increases not only the internet speeds available locally but also vastly increase the bandwidth available locally, finally positioning Seychelles at the forefront of high-speed internet technology.
The University of Seychelles was set up in 2009 to meet the country’s growing demand for skilled labour. The courses offered at the University closely follow the programmes available from the University of London, Pantheon 1 of Paris and Curtin University of Perth, Australia. Inter alia, the University offers courses in business administration, accounting, finance, banking, law and computing. It is hoped that the University, by offering these courses will help train the locals in the areas most needed by the country and it is also hoped that the University can eventually attract foreign students to study in Seychelles. The University has also been working on preparing its undergraduate degree courses in tourism management and environmental sciences. The University continues to seek co-operation agreements with other educational institutions with the aim of increasing its links and also with the hope that more established educational centres can help it prepare suitable degree programmes for its students.
With the SIB, the Seychelles has provided investors with a first point of contact with regards to investing in the country. Laws have been put in place for the protection of investors and there is room for economic growth in numerous sectors, especially tourism, fisheries and the offshore industry. The Seychelles has also been improving upon its infrastructure, especially with respect to its trade and communication links and on manpower development. It is hoped that all of these factors will help bring in further FDI into the country.
Mr Divino Sabino is an Attorney-at-Law of the Supreme Court of Seychelles who practices at the Law Firm of Pardiwalla Twomey Lablache. He is also the Secretary of the Bar Association of Seychelles and a Law Lecturer at the University of Seychelles. He completed his undergraduate degree at the University of Warwick and was called to the Bar at Lincoln's Inn.
Presented by Mr Divino Sabino on the 29th August 2012 at the Symposium on Access to Justice & Alternative Dispute Resolution held at the Kempinki Resort, Mahe, Seychelles.
In a Civil Case Management workshop that was organized by the Judiciary with the assistance of the Commonwealth Institute in September 2011 in Victoria, Mahé, both judges and lawyers agreed that in order to alleviate the caseload of the Courts, it was vital that Alternative Dispute Resolution (“ADR”), primarily in the form of mediation was encouraged if not made a mandatory process before litigation is used or even after the commencement of litigation, that a process be carved out so that mediation may be used to settle the differences of the litigation parties prior to the hearing of the case.
Although mediation was what was discussed at that workshop, it is by no means the only form of ADR mechanism that can be used by stakeholders in alleviating the caseload of the courts.
The zeitgeist to move away from settling disputes through the courts is now visible in the latest agreements that are being drafted. There is now a tendency for contracting parties to include clauses so that agreements are carried out in good faith and that extends to the situation when differences between the contracting parties arise. These dispute resolution clauses often provide for the parties to attempt to negotiate towards settling their differences before any party to the agreement may take things further, either by litigation through the courts or by arbitration.
And so, parties may, by agreement, decide to engage the ADR process to resolve their differences. But this is not always the case, in certain specified circumstances, such as disputes between an employer and employee with regards to the issue of termination of employment, the initiation of a claim or a grievance as the employment law refers to it, leads to the parties having to go through a mediation process and, only if that process fails can the parties then proceed to have their dispute heard before the Employment Tribunal. Therefore, we can see that in specific circumstances, the law can compel the parties to go through the ADR process.
Therefore, in order to bring about effective ADR in Seychelles, is it only necessary to have regard to the above 2 factors, do we only need to ensure that the parties agree to submit their dispute to ADR or for the law to compels them to do so. What if the parties agree to mediate a contractual dispute over a Seychelles immovable property right and use English law as the Governing law? Is there anything wrong with that? In another scenario, what if one of the parties intend to enforce an arbitral award pronounced and conducted in Seychelles in another country? Is that something that should concern us. If one of the parties to ADR later decide that they will not honour what was a mediated settlement or an arbitral decision, what then?
It is therefore imperative that we look into policy and legal issues that may affect how effective ADR may be in Seychelles.
Article 110 of the Commercial Code of Seychelles states that “any dispute which has arisen or may arise out of a specific legal relationship, and in respect of which it is permissible to resort to arbitration, may be subject to an arbitration agreement”. The same article goes on to state that it is subject to certain rules regarding compromises as laid down in Articles 2044 to 2058 of the Civil Code of Seychelles.
So we can already see from this provision of the law that parties may not refer any dispute of any nature to arbitration but only to those that are permissible. And then, with regards to permissible areas of arbitration, parties are bound to follow the rules set out in the Civil Code regarding compromises. These rules on compromises would also apply to other ADR mechanisms such as mediation.
A few of the most notable of these rules for example are that: (i) Public Bodies may not compromise “except with the express consent of the Republic unless they are authorized by law.” (Article 2045-1 of the Civil Code); (ii) That “matters regarding the capacity of persons, the grounds of divorce and judicial separation and generally matters tending to contravene public policy may not be the subject of compromise” (Article 2045-2 of the Civil Code); (iii) Reaching a compromise with regards to civil liability arising from a criminal offence is permitted but it shall not bar any criminal proceedings by the Attorney General (Article 2046 of the Civil Code); and (iv) Compromises shall have the authority of a judgment against which there is no further appeal. Its validity may not be disputed on grounds of error of law or lesion (Article 2052 of the Civil Code).
I will now wish to address the issue of Public Policy, the law on compromises state that matters tending to contravene public policy may not be the subject of compromise. Accordingly, it follows that the end result of mediated settlements and arbitral awards cannot contravene public policy. According to the Jurist Friedrich Carl von Savigny, the notion of public policy is perhaps one of the most difficult topics, if not the most difficult, within legal theory. In the continental system of laws, the concept of public policy, as an impediment to the principle of freedom of contract, has its roots in the French Civil Code of 1804, hitherto often referred to as the Code Napoleon, of which the Seychelles’ Civil Code is based. The drafters of the Code Napoleon were four of the most distinguished jurists of that period, i.e. Tronchet, Bigot de Préameneu, Maleville and Portalis, it was they would incorporated the notion of public policy into the civil law system. The meaning of this concept continues to be controversial, probably because the term is not defined under the Code, however, it has evolved into 2 somewhat identifiable branches, the notion of acts contrary to public order and acts contrary to morals.
In the realm of acts contrary to Public Order, it is in the case when an agreement is clearly incompatible with the interests of society that it becomes illicit and unenforceable under the law. In relation to the State, according to Amos & Walton, it is clear that all agreements are null which interfere with good governance, public order and the administration of justice, public services and national economic policy. Agreements which are designed to circumvent the revenue laws of the State are also null and so too are agreements which are prejudicial to the institution of the family.
In the domain of morality, an agreement may be said to be contrary to good morals when it offends general sentiments of duty, propriety and public decency. Restrictive covenants which impose unnecessary restraints on the employment or business of a party are generally unenforceable if unreasonable (Article 1781 of the Civil Code). The French Courts have generally annulled restrictive covenants which make it difficult for a party to earn a living. Liability for negligent or intentional harm may never be excluded by agreement (Article 1382 of the Civil Code).
Nowadays, we also often see Governing Law provisions, wherein the parties to an agreement choose which jurisdiction’s law will govern the agreement. Although this in itself is not contrary to Seychelles law, Article 3 of the Civil Code states that Seychelles immovable property shall be governed by Seychelles law. Any ADR outcome that confers Seychelles immovable property rights under the laws of any other country other than Seychelles is therefore contrary to public policy and such an outcome may be challenged on that ground alone.
And at the risk of stating the obvious, no ADR outcome can result in any unlawful or unconstitutional outcome.
The law also provides for particular circumstances which allow a party to refer a dispute to arbitration even if there is no arbitration agreement. For example, where a contract is still capable of being performed but due to a complete change of circumstances, the performance of the agreement no longer fulfills the common design of the parties, Article 1148 of the Civil Code allows the party that stands to lose out under the agreement to apply to court for the appointment of an arbitrator (the parties may also agree to nominate their own arbitrator) who may modify the terms of the agreement.
The Courts are empowered under section 205 of the Seychelles Code of Civil Procedure to refer litigating parties to arbitration, either with their consent or not. However, the law does not give the Courts the power to compel litigating parties to resolve their dispute through other forms of ADR such as mediation or conciliation. Therefore, in order for a formal process of mediation to be introduced into the civil litigation process laws will have to be promulgated to address this.
The law also states that there are certain matters that must be referred to the Attorney General as the Ministere Public, section 151 of the Seychelles Code of Civil Procedure lists these as (i) matters relating to the guardianship of children; (ii) matters in which a party is represented by the Curator; (iii) matters concerning presumed absentees or matters in which such absentees are interested; and (iv) matters relating to the interdiction of or persons or the appointment of advisers (conseils judiciaries). These matters are handled by Petitions presented to the court and cannot be decided upon by parties outside of the court process. However, any moves to introduce mediation into the court litigation process must bear in mind the role of the Attorney General as the Ministere Public.
Our laws on arbitration do not bind the parties to follow any set process for how the arbitral proceedings will be conducted or on how the arbitrator or arbitrators will be appointed, but there are several rules on issues which may lead to an arbitral award being void or unenforceable. Therefore, in order for arbitration to be effective in Seychelles, in the sense of arbitral awards being legally binding on the parties to arbitration by being enforceable, it is necessary for the parties involved in arbitration to be aware of the issues that may render an arbitral award unenforceable. Section 207 of the Seychelles Code of Civil Procedure states that an arbitral award may be set aside on any of the following grounds: (i) corruption or misconduct on the part of the arbitrator; or (ii) either party being found guilty of fraudulent concealment of any matter which ought to have been disclosed, or willfully misleading or deceiving the arbitrator. In addition to the above, Article 134 of the Commercial Code lists out numerous circumstances which may allow a party to apply to court to set aside an arbitral award. Some of the grounds are that the arbitral award is (i) contrary to public policy; (ii) the arbitral tribunal exceeded its jurisdiction or powers; (iii) the arbitral tribunal omitted to make an award on one of the points in dispute; (iv) the award was made by an irregularly constituted arbitral tribunal; (v) reasons for the award have not been stated; (vi) the award contains conflicting provisions; or (vi) if the award was obtained by fraud. This list is not exhaustive, there are a handful more circumstances which allow a party to challenge an arbitral award. Therefore, in order for arbitration to be effective in Seychelles, arbitrators must be aware of the grounds which may cause their arbitral award to be subject to attack.
Enforceability of Arbitral Awards or Mediated Settlements
With regards to mediated settlements outside of the court process, as stated earlier, Article 2052 of the Civil Code states that such compromises shall have the authority of a judgment of which there is no further appeal. In the same vein, a judgment by consent presented and affirmed by the court has the force of a judgment of the court.
With regards to arbitral awards, Article 138 of the Commercial Codes provides that arbitral awards may be registered before the Supreme Court of Seychelles and be enforced as though it were a judgment of the Supreme Court.
But what about the enforcement of mediated settlements or arbitral awards in foreign jurisdictions. Mediated settlements will at least have the force of a legally binding contract and a party may seek to enforce that agreement in a foreign jurisdiction through a normal civil action in a foreign jurisdiction.
However, arbitral awards pronounced in Seychelles may not be easily enforceable in foreign jurisdictions. Seychelles is not a party to the New York Convention on the Enforcement of Foreign Arbitral Awards and therefore arbitral awards pronounced in Seychelles cannot benefit from the ease of recognition and consequent enforceability in foreign jurisdictions as provided for under the New York Convention. The enforceability of Seychelles arbitral awards will therefore be at the mercy of the rules of each jurisdiction. As a consequence, parties which may wish to litigate in Seychelles, but which may seek to enforce any outcome outside of Seychelles, may therefore find it more practical to submit to the jurisdiction of the Seychelles courts of law rather than that of a Seychelles arbitral tribunal simply on the mere fact that a judgment of a court of law is more easily enforced in a foreign jurisdiction compared to that of an arbitral award. Therefore, in order to persuade more parties to submit to the jurisdiction of an arbitral award Seychelles must seriously consider adopting the New York Convention.
To conclude, although the general sentiment is to encourage the use of ADR mechanisms in Seychelles, in order for it to be effective we cannot ignore the various rules in place with regards to what can be resolved by ADR, we cannot ignore the rules on public policy, we cannot ignore the rules on the setting aside of ADR outcomes, and we must also look at the laws in place with regards to the enforcement of ADR outcomes. The failure to adhere to and pay attention to any of these issues can lead to parties being exposed to great expense and time in going through the ADR process only to result in unenforceable outcomes, which will undermine the legitimacy of ADR in Seychelles.
 Marks, T., & Betancourt, J.C., Rethinking Public Policy and Alternative Dispute Resolution: Negotiability, Mediability and Arbitrability, The International Journal of Arbitration, Mediation and Dispute Management, Vol 78 No 1, Feb 2012, page 19, Sweet & Maxwell.
 Lawson, F.H., Anton, A.E., & Neville Brown, L., Amos and Walton’s Introduction to French Law, 1967, 3rd edn, Oxford University Press.
Mr Divino Sabino is an Attorney-at-Law of the Supreme Court of Seychelles who practices at the Law Firm of Pardiwalla Twomey Lablache. He is also the Secretary of the Bar Association of Seychelles and a Law Lecturer at the University of Seychelles. He completed his undergraduate degree at the University of Warwick and was called to the Bar at Lincoln's Inn. He is an Associate of the Chartered Institute of Arbitrators.
The Contribution of Alternative Dispute Resolution Mechanisms in Enhancing Access to Justice and the Administration of Justice in Seychelles
Speech delivered by Chief Justice Fredrick Egonda-Ntende on the 28th August 2012 at the Symposium on Access to Justice & Alternative Dispute Resolution held at the Kempinki Resort, Mahe, Seychelles.
The Contribution of Alternative Dispute Resolution Mechanisms in Enhancing Access to Justice and the Administration of Justice in Seychelles.
[Fredrick Egonda-Ntende, Chief Justice of Seychelles]
Access to Justice is a fundamental right that is enshrined in the Seychellois Charter of fundamental human rights and freedoms in article 19(7) of the Constitution. It provides,
‘Any court or other authority required or empowered by law to determine the existence or extent of any civil right or obligation shall be established by law and shall be independent and impartial; and where the proceedings for such a determination are instituted by any person before such court or other authority the case shall be given a fair hearing within a reasonable time.’
Access to Justice is a key right that unlocks the lock or removes the possible obstacles to the enforcement of not only all the other fundamental rights and freedoms set out in the Seychellois charter of fundamental rights and freedoms but the maintenance of the whole constitutional framework that underpins the existence of the rule of law in our society. Given its cardinal importance it behoves us to pay special regard to the existence of any threats to this right be such threats systemic or otherwise and to the promotion of its observance.
Lord Woolf in his Final Report identified the following elements as being essential to a civil justice system worth its salt. ‘
‘(a) be just in the results it delivers;
(b) be fair in the way it treats litigants;
(c) offer appropriate procedures at a reasonable cost;
(d) deal with cases with reasonable speed;
(e) be understandable to those who use it;
(f) be responsive to the needs of those who use it;
(g) provide as much certainty as the nature of particular cases allows; and
(h) be effective: adequately resourced and organised.’ 
The foregoing in my view form some universal standard or norms with regard to what jurisdictions world wide seek to ensure permeate their civil justice systems. Seychelles is no exception. Litigants in this jurisdiction are entitled to the same.
The Situation in Seychelles
We have recently adopted a computerised case administration that has allowed us collect case data in such a manner that we now have a clearer impression of the caseload before the courts. Though we are still populating the data base and therefore current data may not be fully accurate or reliable nevertheless it affords us an opportunity to have a fairly good idea of the current case data and whether or not our performance is in accord with the constitutional standards. While reviewing the latest information, I find that the following civil cases are pending hearing before the Supreme Court.
Table No. 1
The Judiciary has adopted some service standards set out in the Delay Reduction Measures and Establishment of Time Standards of 8th September 2010. These measures established that civil cases commenced by way of plaint should be brought to determination not later than 2 years from filing. The above table 1 does illustrate the number of cases still pending before the Supreme Court that are 2 or more years old. These are approximately 363 civil cases as at 31st July 2012. This could be referred to as the extent of civil case backlog before the Supreme Court for cases of that category.
While the Seychellois Charter of Fundamental Human Rights and Freedoms requires that cases brought before the Courts be determined within a reasonable time it does not define what reasonable time is. This is left to the Courts for interpretation. Though we have established a standard such as the one for civil cases commenced by way of plaint, it does not necessarily mean that any case that has not complied with this standard is necessarily out of the constitutional latitude of being determined within a reasonable time as each case is bound to be considered on its own merits to determine whether or not it has met the constitutional imperative. Nevertheless for purposes of considering whether or not a court is meeting this constitutional imperative and therefore affording people access to justice it is a useful standard to provide guidance of how near the court is to meet that constitutional imperative.
In the case of the Supreme Court of Seychelles it is clear that there is considerable ground for concern given the age of the pending caseload as noted above; the population of Seychelles (83,000.00) and the judge/population ratio that has Seychelles as having one of the highest ratios of judges per 100,000.00[20 judges per 100,000.00 people]! Delay in bringing cases to conclusion is one of the key obstacles to access to Justice in Seychelles. Delay has a number of pernicious effects upon litigants. Apart from tying them down for so long it increases their expenses on litigation both in terms of attorneys’ appearance fees, their transport to and from court and other expenses. A determination 7 years down the line will not adequately provide against inflation or it may disproportionately hurt the unsuccessful in terms of payment of interest that would not have become due had the decision been made in a timely manner. Such a decision may turn out to be neither just nor fair.
Lord Woolf identified delay in concluding litigation as one of the problems afflicting the English and Welsh Civil Justice System. He noted in his final report,
‘ The defects I identified in our present system were that it is too expensive in that the costs often exceed the value of the claim; too slow in bringing cases to a conclusion and too unequal: there is a lack of equality between the powerful, wealthy litigant and the under resourced litigant. It is too uncertain: the difficulty of forecasting what litigation will cost and how long it will last induces the fear of the unknown; and it is incomprehensible to many litigants. Above all it is too fragmented in the way it is organised since there is no one with clear overall responsibility for the administration of civil justice; and too adversarial as cases are run by the parties, not by the courts and the rules of court, all too often, are ignored by the parties and not enforced by the court.’
Lord Woolf proposed the amendment of the Civil Procedure Rules in order among other things to ensure that the following would follow in the handling of civil disputes.
‘(a) People will be encouraged to start court proceedings to resolve disputes only as a last resort, and after using other more appropriate means when these are available.
(b) Information on sources of alternative dispute resolution (ADR) will be provided at all civil courts.
(c) Legal aid funding will be available for pre litigation resolution and ADR.
(d) Protocols in relation to medical negligence, housing and personal injury, and additional powers for the court in relation to pre litigation disclosure, will enable parties to obtain information earlier and promote settlement.
(e) Before commencing litigation both parties will be able to make offers to settle the whole or part of a dispute supported by a special regime as to costs and higher rates of interest if not accepted.
Litigation will be less adversarial and more co operative.
(a) There will be an expectation of openness and co operation between parties from the outset, supported by pre litigation protocols on disclosure and experts. The courts will be able to give effect to their disapproval of a lack of co operation prior to litigation.
(b) The court will encourage the use of ADR at case management conferences and pre trial reviews, and will take into account whether the parties have unreasonably refused to try ADR or behaved unreasonably in the course of ADR.’
The Recommendations by Lord Woolf, or the Woolf Reforms as they became to be known, were adopted in England and Wales with the promulgation of a new set of Civil Procedure Rules of 1998. Literature that I have examined on the success of the reforms has been laudatory. Are there any lessons for us in Seychelles?
It is clear that the Woolf reforms espoused ADR as one of the major methods or avenues of dispute resolution that must be ingrained in the new Civil Procedure Rules for England both as a pre litigation option and in the course of litigation at a fairly early stage in the proceedings.
What is Alternative Dispute Resolution?
Generally Alternative Dispute Resolution refers to the possible of settlement of disputes other than through a trial in the ordinary courts of each jurisdiction. It is not available as of right, save if provided for by an agreement, like access to a court system is for many jurisdictions. It is alternate to the ordinary system of adjudication of disputes. Some commentators on the subject assert that it is a misnomer to refer to it as alternative, believing that it is the more appropriate method of dispute resolution than the adjudication through the court system. They propose that it should be referred to as the Appropriate Dispute Resolution, thus maintaining the acronym of ADR
There are about five modes of alternative dispute resolution, which I wish to mention. These are,
3. Neutral case evaluation
4. Rent a Judge
Starting with the last arbitration should not be unfamiliar. On our statute books arbitration is permitted both under the Seychelles Code of Civil Procedure as well as the Commercial Code of Seychelles. Arbitration is grounded in contract. Parties to a contract agree at the time of making the contract or after that any dispute or a class of dispute that may arise during the performance of the contract shall be settled by arbitration. That is the decision of a third party chosen by parties or appointed in accordance with the agreement or law who hears the parties and renders a binding decision. An arbitration clause may amount to waiver of the parties right to proceed to a court of law with that dispute save for enforcement of the arbitral award, which when filed in court, and confirmed by the court, may be enforced as a judgment of the Court.
Negotiation is a matter that must be familiar with members of the bar. This involves the parties and their counsel agreeing to resolve the dispute between the parties at different stages of the dispute, before and after the filing of the dispute in the courts. This is one area of alternative dispute resolution that I think members of the bar would be well advised to consider in advising their clients. There are a substantial number of matters that are filed in the courts, which of course cannot be settled by negotiation, for different reasons. But there are a large number of cases that could be settled by negotiation. Of course you are aware that one of the purposes of a letter notifying the other side that you intend to file an action in court within a certain number of days is to set in motion the process of negotiation, where possible. I feel that counsel and parties have not paid enough attention to this method of resolving disputes. There are considerable benefits to counsel, the litigants, and of course the court system. The savings in costs and time would be considerable. Conversely, the cost of not negotiating in appropriate cases is considerable. This is not only to the parties or at least one of the parties, and the courts, but also to counsel in the case. Counsel is probably diverted from paying attention to other business. The un-disposed of business, or work in progress, assumes a distorted position in the business of the firm.
Mediation is a method of resolving a dispute where a third party helps the parties to agree to settle their dispute. The third party does not impose a solution. He or she does not impose his or her own views on the parties. The parties must be willing to let the third party assist in this regard. Mediation offers some promise in Seychelles just as we shall hear of how it has taken route in many other jurisdictions both in the region and outside the region. Both the members of the bar and the bench may help in this area. On the commercial list we are trying to encourage counsel and the parties to make use of the possibilities offered by this method.
I wish to say that my very short experience in Seychelles [three years now] makes me hopeful that it may be possible to take more steps in this area. This will depend on a number of factors. Members of the bar must appreciate and support this development. I am hopeful that activities of this nature, that is, this symposium, will help in this regard. On our part, in the judiciary, we have started to train your judges in this and other areas so as to increase their effectiveness and efficiency. I would like to call upon the Bar Association of Seychelles to consider training their members in mediation techniques. I am prepared to support such endeavour in different ways including obtaining faculty for such programmes. It is not only judges who can act as mediators. Many years ago I met an attorney in Reno, Nevada, USA who was starting a practice in mediation. Two years later I met him again in Reno. He told me that his practice was extremely successful.
I now wish to refer to neutral case evaluation. This involves the parties to a dispute, by agreement, seeking the opinion of a third party, usually an expert in the area of the dispute. The third party neutral will evaluate the dispute for the parties. Upon that evaluation the parties will be able to make a decision. I am not aware whether or not this mode is in use in Seychelles. I invite you to consider its applicability in appropriate situations.
Rent a Judge is what it exactly says. The parties with a dispute agree to rent, mainly a retired judge, to hear their dispute outside the court system. In California, USA, I understand this is common practice. Legislation has allowed judgments in such cases to be enforced in the ordinary way. You do not have to wait long in the que. Just rent a judge in cases where it is appropriate. This is very akin to Arbitration.
ADR and Access to Justice: What is the connection?
As noted earlier there are about 363 civil cases older than 2 years which are undecided and have now descended the category we refer to as backlog. In the majority of those cases it can safely be assumed that the litigants’ right to a trial within reasonable time has been breached. The right to access to justice is in jeopardy with other attendant effects. These litigants are suffering obstacles to access to justice. These include delay in the courts caused by congestion, lack of adequate resources, and at times, improper conduct on the part of both the bar and the bench.
Divine authority for alternative dispute resolution is in the Gospel of ST.MATHIEW; chapter 5 verses 25 to 26. Our Lord Jesus said,
"Settle matters quickly with your adversary who is taking you to court. Do it while you are still with him on the way, or he may hand you over to the judge, and the judge may hand you over to the officer, and you may be thrown into prison. I tell you truth, you will not get out until you have paid the last penny."
As members of the bar it would be appropriate if you advised your clients accordingly. Alternative dispute resolution can not address all the ills of the system. But it can, in appropriate cases, provide access to justice in a more expeditious manner. Alternative dispute resolution can save time and expense of the parties, counsel, and relieve the courts of some congestion, thereby releasing the courts to attend to the other pending cases.
There are other benefits as well. When parties fashion their own solution it is asserted that a win-win situation is created leaving the parties without the rancour that follows a loss in the courts. Quite often there is no need for enforcement of the agreement as the parties will perform what they have agreed to perform.
Arbitration is limited only to those cases where parties have agreed to arbitration either prior to the dispute arising or after the dispute arises. This involves, often in practise, a very limited number of cases that come before the courts. On the other hand the majority of cases filed before the courts have the potential for mediation to resolve them. Though parties can settle and do settle cases by way of negotiation it is clear that this happens often only with the active encouragement of the court pointing in effect to the potential for mediation with a third party assisting the parties. Neutral case evaluation by its very nature is likely to be applicable to a narrow class of cases and is therefore unlikely to have a significant impact on a court’s caseload. In effect we are left with only mediation as offering the best avenue at tackling a significant caseload.
I therefore commend to you court annexed mediation as offering the best avenue out of the ADR options to offer an opportunity to all of us to improve access to justice for our people. Given the provisions of section 131 of the Seychelles Code of Civil Procedure, there lies in existence the legal means to convert a mediated agreement between the parties into an order of court by way of judgment by consent. Section 131 states,
‘131. The parties may at any stage of the suit before judgment, appear in court and file a judgment by consent signed by both parties, stating the terms and conditions agreed upon between them in settlement of the suit and the amount, if any, to be paid by either party to the other and the court, unless it see cause not to do so, shall give judgment in accordance with such settlement.’
The basis of mediation is the agreement of the parties and an opportunity to understand that through mediation you can be able to defend or secure your interests in a dispute, rather than limit yourself to the rights based approach which is the epitome of the traditional court adjudication process. An ordinary action seeks to enforce rights and that is what the court rules upon. To the contrary mediation has the potential to look at a party’s current and future interests in resolving a dispute. It may be to maintain a business or social relationship. This interest based approach makes mediation quite suitable to resolving disputes be they of a business / commercial or family nature.
Pre requisites to the Success of Mediation
In spite of its potential for mediation to succeed in a jurisdiction there are certain prerequisites now recognised as essential to the success of any mediation project.
Firstly in order to create incentives for parties to embrace mediation there ought to be certainty about the alternative to mediation. This is trial date certainty in case mediation fails. If one or the other of the parties who probably thinks he or she benefits most from delaying resolution of the case knows that once he returns to the adjudicatory process in the court system there is no likelihood of an early hearing and resolution of the case he will have no incentive to mediation. If the court system is inefficient in its listing, hearing and determinative functions this will be a disincentive for the success of mediation.
Secondly the support of key stakeholders such as judges, attorneys, government law officers, and others is essential to the success of the project. It is important that a group of champions in support of mediation emerge, especially in the courts where it may be introduced and in the leadership of the Bar, the Judiciary, Ministry of Legal Affairs and Attorney General’s Chambers, and Civil Society.
Thirdly though mediation is voluntary in so far as reaching agreement is concerned the agreement once reached which solves the dispute must be enforceable by courts.
Fourthly to ensure that all parties are on the same page and to provide for standard practices, and certainty with regard to the mediation process, it is important that rules governing mediation and mediators be promulgated.
Fifthly there must be resources that will be devoted to the implementation of mediation.
Sixthly attorneys must know that mediation helps to improve profitability of their own practice rather than deny them fees. They are still entitled to fees even if the case has been successfully mediated. Attorneys’ through put [disposal] of cases will increase. So will ultimately their own earnings. The savings in terms of time spent on any one particular matter will increase considerably!
Lastly there must be private sector demand for mediation or awareness creation in the private sector of the benefits of mediation for the private sector to embrace mediation and create a demand for it.
Assurances of the Chief Justice
For my part I would like to assure the legal profession, the bar, the bench, and users of the courts that I am committed to the introduction of a court annexed mediation programme that will enhance access to the Justice for our people. I am prepared to promulgate the necessary rules once we achieve a consensus at this Symposium.
I am prepared to seek resources and devote them to the training of mediators, creation of awareness of mediation to the private sector, or such other needs as may be identified, as I have done in the past.
In short I am prepared to be a champion of the movement to establish mediation in our civil procedure and process so that it is part of the menu available for resolution of disputes in this country. The question I pose to the other stakeholders is: Are you prepared to be a champion in supporting mediation?
I would invite you to become the champions upon which we shall build the new system. Together we can make a difference.
We already have some judges and magistrates trained as mediators. It is possible to start with a mediation week once a very term or a mediation day every month whereby counsel and their parties are summoned to the court for mediation in respect of cases which are now in backlog and are thought to be amenable to mediation by the trial judge or the parties and their counsel. This may be a special exercise targeting the backlog.
At the same time rules would be promulgated that apply mediation to the current caseload. One of the issues that I wish to leave with you for your consideration is whether reference to mediation should be mandatory or optional at the instance of either a party or judge assigned to the matter. Many jurisdictions have opted for the mandatory referral which appears a contradiction in terms given the voluntary nature of mediation. In essence there is really no contradiction. Mediation itself continues to be voluntary in terms of the exercise itself. It is the pre mediation process that compels a party to submit to it. Mandatory reference has its drawbacks as well as advantages. The percentage of successful mediations as against referrals is lower than where referrals are optional.
On the other hand optional reference at the instance of either one of the parties or the court on its own motion in appropriate cases may attract much fewer cases to mediation but past experience suggests that it yields greater success in terms of successful mediation in relation to the number of referred cases.
In a situation where you have a significant case backlog it might nevertheless be worthwhile to apply mandatory referral and effort is made to mediate as many of the backlog cases as possible. I leave it to you to advise as to what would be appropriate for Seychelles.
I propose that a deadline be agreed upon when we would be able to put in effect what will be agreed upon in this Symposium. 31st October 2012 may be appropriate.
Courts that have successfully adopted court annexed mediation programmes have reaped the following benefits: reduced backlog; increased level of in court settlements facilitated by judges; an improved legal culture; improvements in Civil procedure; reduction of formality and complexity of existing processes; inculcated lessons for judges on elements of case management; supported case management and court reforms; modified dispute resolution culture and hostile mindsets within courts and created a model for further reform.
I am confident that if you take several bold steps and decisions in this Symposium and beyond mediation will truly make a significant contribution to access to justice in Seychelles.
I thank you for listening to me.
 Keynote Address to the Bar/Bench Symposium on the Role of ADR in Access to Justice in Seychelles, Kempinski Hotel, Baie Lazare, Seychelles 28-29 August 2012.
 Accessed on 16 August 2012 at http://webarchive.nationalarchives.gov.uk/+/http://www.dca.gov.uk/civil/final/overview.htm
 Accessed on 16 August 2012 at http://webarchive.nationalarchives.gov.uk/+/http://www.dca.gov.uk/civil/final/overview.htm
 Lukasz Rozdeiezer et al, Alternative Dispute Resolution Manual: Implementing Commercial Mediation, Page 23
By Mr Rajiv Shah
12th November 2012
Section 23 of the Seychelles Penal Code defines common intention as follows:
“When two or more persons form a common intention to prosecute an unlawful purpose in conjunction with one another and in the prosecution of such purpose an offence is committed of such nature that its commission was a probable consequence of the prosecution of such purpose, each of them is deemed to have committed an offence.”
This means that if D1 and D2 agree to commit crime X and D1, going beyond what was agreed to, commits crime Y, then D2 will also be guilty of crime Y if and only if crime Y was a probable consequence of crime X.
Before analysing what “probably consequence” means it is useful to set out English law on that point.
If D1 and D2 agree to commit crime X and D1, going beyond what was agreed to, commits crime Y, then D2 will also be guilty of crime Y if and only if he foresaw that D2 might do crime Y. (see R v A  Q.B. 841)
The only difference is that in our law probable consequence is required whereas in English law it is foresight.
The first difference is that under Seychelles law whether something is a probable consequence is an objective test (whereas in England the secondary crime must be foreseen, this is subjective). This was confirmed by the Privy Council in Furbert v The Queen  1 W.L.R. 1716[i].
However the determination of whether Y was a probable consequence is determined by taking into account of what D2 knew or did not know: Furbert v The Queen.
Consider the following example:
D1 and D2 agree to break into a house and steal. There is no agreement to kill anyone. In the course of the theft D1 takes a gun out and kills V.
Consider two alternative scenarios: (i) D2 knew that D1 had a gun, (ii) D2 did not know that D1 had a gun.
In (i) the killing can indeed be said to be a probable consequence. However that is not the case in (ii). In (i) D2 would be guilty of murder on the basis of common intention but in (ii) he would only be guilty of breaking and entering.
English law would lead to the same result in (ii) since D2 did not know of the gun he could not have foreseen that D1 would kill V. In (i) it is theoretically possible that D2 did not foresee the killing however in practice he is likely to be convicted of murder on the basis of joint enterprise.
According to English law what must be foreseen by A is crime Y. This means both the actus reus and the mens rea (if any) of Y: R v A
In Kilindo v Republic  SCCA 20 the Seychelles Court of Appeal (at ) stated the position in English law following R v A as:
“It appears that in England, in cases involving joint enterprise it is not sufficient to show that a secondary act took place as a result of the agreed first act. It must also be shown that the co-accused who committed the secondary act had intended the secondary act.”
It is respectfully submitted that this is not quite accurate. What must be shown is that D2 (the party who did not commit the secondary act) foresaw that D1 might do the secondary act with the required mens rea. In the case of murder (which was the charge in R v A) this is indeed intention (to kill or cause grievous bodily harm). But if the mens rea for the secondary crime was subjective recklessness then foresight by D2 that D1 would act with subjective recklessness is sufficient.
It is important to note that it need not be shown that D2 had mens rea of the secondary crime. All that needs to be shown is that D2 foresaw that D1 would have the mens rea of the secondary crime.
The Seychelles Court of Appeal then goes on to suggest that this principle (that A must foresee that B would act with the required mens rea) is not part of Seychelles law:
“ As I have pointed out this distinction does not arise in Seychelles because of the wording of section 23 of our Penal Code. If we are to use the same terminology as the English cases quoted above, then to put it simply the law in Seychelles is that it suffices to show that a secondary act took place as a probable consequence of the agreed first act intended. In this jurisdiction we do not need to look for the intention of the perpetrator to carry out the secondary act. All that is necessary is that the secondary act took place as a probable consequence of the first act to which they had agreed upon.”
It is respectfully submitted that the Court of Appeal erred in saying that. Whilst it is true that the requirement that D2 must foresee crime Y is not part of Seychelles law, the requirement that D1's commission of the actus reus of crime Y together with the mens rea of crime Y was a probable consequence of the agreed first crime X is part of Seychelles law.
To hold otherwise would lead to absurd situations. Suppose D1 does the actus reus of Y without the mens rea of Y, then he is obviously not guilty of Y. But if his doing of the actus reus of Y was a probable consequence then D2 would be guilty of Y (on the basis of s. 23)!
That B acting with the required mens rea must be a probable consequence is indeed clear from the wording of s. 23: “in the prosecution of such purpose an offence is committed of such nature that its commission was a probable consequence of the prosecution of such purpose”. The word offence and not just act is used. Offence includes both the actus reus and the mens rea.
Granted, it will generally be the case if the actus reus was a probable consequence then so was the mens rea. However, this is not always the case. Consider the following example:
D1 and D2 agree to break into a house and steal. D2 knows that the person in the house is an old man (V) who may have a heart attack if a replica gun is pointed at him, he hopes that that V will remain asleep. D1 does not know that (and D2 knows that D1 does not know). D1 has a gun. D2 thinks it is a replica gun.
Let us pause to see (from D2's point of view) what the probable consequences are. It is a probable consequence that V will wake up, that D1 will point the replica gun at him and that V will die from a heart attack. This will amount to constructive manslaughter (R v Watson  1 W.L.R. 684). If this does indeed happen then D1 would be guilty of manslaughter as a principal and D2 would also be guilty of manslaughter on the basis of common intention.
Let us now continue with the story
V wakes up and sees them. D1 fires the gun at V. It was in fact not a replica but a real gun, D2 thought it was a replica.
D1 is clearly guilty of murder. Whilst D1 killing V was a probable consequence that he would do so with intent to kill was not. This is because it was a probable consequence (from D2's point of view) that D1 would take out a replica gun and V would die of fear (that would be manslaughter on D1's part as he does not have malice aforethought). But it was not a probable consequence (from D2's point of view) that D1 would shoot V with a real gun (as D2 thought D1 only had a replica gun). So D2 is not guilty of murder on the basis of common intention. He is nevertheless guilty of manslaughter, this is because every murder includes manslaughter and, that D1 would commit manslaughter was a probable consequence.
Here is a further example:
D1 and D2 agree to break into a house and steal. D1 is a very strong man. V is a frail old man. D1 is epileptic and can have at some occasions epileptic fits in which he does not know what he is doing. D2 knows that.
Let us consider what the probable consequence is. It is a probable consequence[ii] that D1 would go into an epileptic fit and kill V in the process. This however would not amount to an offence because of the involuntary nature of D1's bodily movement. Also D1, not knowing what he is doing, is incapable of having mens rea. If that happens D1 would not be guilty of any further offence and neither would D2.
D1 pretends to go into an epileptic fit and kills V intentionally.
D1 is clearly guilty of murder. D1 killing V (in what looks like an epileptic fit) was a probable consequence but that he would do so intentionally (whilst only pretending to have an epileptic fit) was not. So D2 would not be guilty of murder on the basis of common intention.
The position in Seychelles law is for D2 to be guilty of the secondary crime Y (which was not agreed) it must have been a probable consequence that D1 would do the actus reus of Y with mens rea of Y.
Any suggestion to the contrary by the Seychelles Court of Appeal in Kilindo is, it is respectfully submitted, wrong. In fairness to the Court it might have been that the choice of the word “act” in “All that is necessary is that the secondary act took place as a probable consequence of the first act to which they had agreed upon” was an unfortunate choice of word. However, the rejection of R v A is then unclear.
It follows that when directing a jury it is insufficient to merely ask “Was V's death a probable consequence?” Rather the question should be “Was D1's killing of V with malice aforethought a probable consequence?”
In Kilindo it is, given the wide definition of malice aforethought, unlikely that the correct direction would have made any difference to the conviction for murder.
After having written this note (but before publishing it) the Court of Appeal gave its judgement in the case of Sopha v Republic SCA 11/2010.
At  Fernando JA approved of statement of law in Kilindo (which I criticise in this note). However at  he states that for one “to be convicted of having committed murder, while prosecuting the offence of robbery; the words 'of such a nature' necessarily requires proof from an objective standpoint, of knowledge of the three elements required to constitute the offence of murder, namely, the causing of death, by an unlawful act or omission, with malice aforethought; and the probability of death ensuing in such circumstances.”
Merely, showing that death was a probable consequence is then (as I argued) not enough. What is most interesting is the reference to knowledge.
At  Fernando JA states “This brings in the element of knowledge i.e. knowledge on the part of the perpetrators as to the probable consequence of the prosecution of the offence they set out to commit. In such circumstances proof of the requisite intention on the part of the perpetrators, which may be an element of the other or second offence, need not be proved and proof of knowledge would suffice”.
It is unclear what this means in terms of the direction for the jury. It could mean:
1. Did D2 know that D1 would kill V with malice aforethought?
2. Did D2 know that D1 killing V with malice aforethought was a probable consequence of the robbery?
3. Did D2 ought to have known that D1 would kill V with malice aforethought?
4. Did D2 ought to have known that D1 killing V with malice aforethought was a probable consequence of the robbery? (this seems to be the same as “Was D1's killing of V with malice aforethought a probable consequence?”)
1 seems excluded by the reference to an objective test at  and . 3 and 4 actually seem equivalent (since whether there are a probable consequence is determined by what a reasonable person in D2's shoes would know).
Clarification by the Court of Appeal on this point would be most welcome.
At  Fernando JA states that the deeming provision of section 23 (“each of them is deemed to have committed the offence”) is in line with the derogation to the presumption of innocence provided for in Article 19(10)(b) of the Constitution. A detailed examination of that claim is beyond the scope of this note so I shall only make a few short observations.
It is respectfully submitted that either section 23 is unconstitutional or it is not actually a limitation of the presumption of innocence and so does not need to be justified as being “necessary in a democratic society” (this requires a detailed proportionality analysis which the Court of Appeal did not undertake – see Tadros and Tierney (2004) and Dennis (2005)).
Article 19(10)(b) applies to laws that “[declare] that the proof of certain facts shall be prima facie proof of the offence or of any element thereof”. By contrast the provision in section 23 is conclusive and not prima facie. No evidence can be adduced to rebut it. Nor is it concerned with only certain elements of the offence of (say) murder. Once all the requirements of section 23 are met there is nothing more to prove for D2 to be guilty of murder. As such section 23 is not a permitted derogation to the presumption of innocence and it is therefore unconstitutional: Art 47(b).
An alternative view is that Article 19(2)(a) (presumption of innocence) is not even engaged. This is because section 23 is actually not about evidence but about law. According to that view, as a matter of law, if D1 commits murder and the requirements of section 23 are met then D2 is guilty of an offence which the law terms murder. In other words, rather than “deeming” D2 to have committed murder the conventional way (i.e. actually killing someone himself with the required mens rea or aiding, abetting, counselling or procuring someone to do it), section 23 creates a new way of committing the offence of murder. On the debate about whether joint enterprise is a subset of accessorial liability see Virgo (2006) and Simester (2006).
For that interpretation of section 23 not to engage Article 19(2)(a) (the presumption of innocence) it would have to be argued that the presumption of innocence under our Constitution is merely procedural and not substantive. For an argument that it is substantive see Tadros (2007).
Dennis, “Reverse onuses and the presumption of innocence: in search of principle”, (2005) Criminal Law Review: 901-936
Simester, “The mental element in complicity”, (2006) Law Quarterly Review, 122: 578-601
Tadros and Tierney, “The presumption of innocence and the Human Rights Act”, (2004) Modern Law Review, 67(3):402-434
Tadros, “Rethinking the presumption of innocence”, (2007) Criminal Law and Philosophy 1:193-213
Virgo, “Making sense of accessorial liability”, (2006) Archbold News, 6: 6-9
*I am grateful to Professor Graham Virgo for having taught me criminal law and for his comments on this paper. All errors are, of course, my own.
[i] This was an appeal from Bermuda. Section 28 of the Penal Code of Bermuda is identical to Seychelles's.
[ii] We are assuming that the likelihood of a fit would be high enough to amount to a probable consequence. It is arguable in those circumstances that him going in the house of an old man would then be grossly negligent and so he would be guilty of gross negligence manslaughter. Even if that is so this does not detract from my point that D2 would not be guilty of murder.
Rajiv Shah is a third year law student at University of Cambridge (Downing College). He holds a Bachelor's degree in Mathematics from Warwick University.
By Mr Rajiv Shah
4th September 2012
1. In Seychelles the appointment of judges and other positions requiring independence falls under the responsibility of the President of the Republic and of the Constitutional Appointments Authority (CAA). This article will examine the relationship between the President and the CAA.
2. A common assumption in Seychelles is that the role of the CAA lies in recommending judges and other constitutional office holders to the President. Since this is a mere recommendation, the common assumption goes, the President has a discretion to refuse to appoint the people recommended by the CAA. This article will argue that this view is incorrect. In most cases the President does not have a discretion in appointing judges and other office holders. His role is there similar to that of Her Majesty The Queen in appointing judges in the UK. It is only in limited circumstances that the CAA's role is merely to recommend. In those cases the President is free to reject the CAA's recommendation.
3. Section II argues that the use of words such as “recommend” or “propose” does not say anything about whether the President has a discretion or not. Section III argues that in a number of instances, including judicial appointments, the President must give effect to the CAA's proposal. Section IV argues that in those cases the CAA is not required (but is free) to give the President a list of candidates to choose from. Section V considers instances where the President has a discretion. Section VI considers two somewhat ambiguous instances where it is argued that the President does not have a discretion.
4. Section VII argues that the division between discretionary and mandatory appointments is not arbitrary but actually serves a purpose: protecting independence. Section VIII argues that the only instances where they President may refuse to appoint (in mandatory instances) is if the CAA has acted ultra vires. Section IX argues that in mandatory instances the President is bound by the length of time given by the CAA but that in discretionary instances he is free. Section X concludes.
5. The fact that in the Constitution the word “recommend” is used does not in itself mean that the President has a discretion. This can be seen from the following Articles.
6. Removal of judges
Article 134(3): “Where, under clause (2), the tribunal recommends that a Justice of Appeal or Judge ought to be removed from office, the President shall remove the Justice of Appeal or Judge from office.”
7. Removal of officers
Article 165(4): “Where under clause (3), a tribunal recommends that an officer to whom this Article applies ought to be removed from office, the President shall remove the officer from office.”
8. Removal of commissioners
Article 166(2): “A Commissioner shall be removed from office by the President where the question of the removal of the Commissioner from office has been referred to a tribunal appointed under clause (3) and the tribunal has recommended to the President that the Commissioner ought to be removed from office.”
9. In all those case although the tribunal “recommends” the President is under an obligation to give effect to the “recommendation” of the tribunal. This is because “shall” is used.
10. The word propose does suggest that the person the proposal is made to can reject it, although the permissibility of a rejection is less clear than if “recommend” is used. A fortiori, it follows that in the context of Constitutional appointments the fact that the word “propose” is used does not necessarily mean that the President has a discretion (since in the above case “recommend” was used but there is no discretion).
11. So in the following the use of “propose” does not necessarily mean the President has a discretion:
12. Justices of Appeal
Article 123: “The President shall, by instrument under the Public Seal, appoint the President of the Court of Appeal and other Justices of Appeal from candidates proposed by the Constitutional Appointments Authority.”
13. Judges of the Supreme Court
Article 127: “The President shall, by instrument under the Public Seal, appoint the Judges and Masters of the Supreme Court from candidates proposed by the Constitutional Appointments Authority.”
14. Other officers
Article 62(3): “Appointment to an office declared by the President not to be an office in the public service shall be made by the President from candidates proposed by the Constitutional Appointments Authority.”
15. Attorney General
Article 76(1): “There shall be an Attorney-General who shall be appointed by the President from candidates proposed by the Constitutional Appointments Authority.”
16. Electoral Commissioner (original Constitution)
Article 115(1): “There shall be an Electoral Commissioner who shall be appointed by the President from candidates proposed by the Constitutional Appointments Authority for a term of office of not more than seven years.”
Article 143(1): “There shall be an Ombudsman who shall be appointed by the President from candidates proposed by the Constitutional Appointments Authority.”
Article 158(1): “There shall be an Auditor-General who shall be appointed by the President from candidates proposed by the Constitutional Appointments Authority.”
19. Once again the word “propose” does not mean there is a discretion and the use of “shall appoint” and “shall be appointed” means it is not discretionary but mandatory. The President cannot refuse to appoint someone proposed by the CAA.
20. All the above Articles state “candidates proposed”. Does this mean that the CAA is obliged to propose more than one candidate (for a single vacancy) and the President can choose which one to appoint? It is submitted that it does not.
21. Schedule 2 para 2 of the Constitution states: “In this Constitution, unless the context otherwise requires, words in the singular shall include the plural and words in the plural shall include the singular.”
22. Hence, the CAA is not required to give the President a list unless the context requires otherwise. In the case of Articles 123 (Justices of Appeal), 127 (Judges of the Supreme Court) and 62(3) (other officers) the plural was used because those Articles concerned the appointment of many individuals. So the context does not require that the CAA proposes more than one person for the post of the judge.
23. Insofar as the other Articles are concerned the position is less clear. The plural was used as this was the only possibility with the syntax that was adopted (try constructing the same sentence but with the singular, you cannot). The question then is, was this particular syntax adopted because it was intended that the CAA proposes more than one candidate from the President to choose from? I do not know, but the effect of Schedule 2 para 2 is that the CAA is free to propose only one candidate unless the context requires otherwise. There is no evidence that it does. So the CAA is free to propose just a single candidate or give a list.
24. This is confirmed when one looks at the provision of the original Constitution regarding the appointment of the Chairman of the CAA and of the PSAB.
25. Chairman CAA (original constitution)
Article 140(2): “Where the two members of the Constitutional Appointments Authority appointed under clause (1)(a) are unable to agree on the appointment of the third member and Chairman of the Authority, the two members shall, within fourteen days after the end of
the period specified in clause (1) (b) , propose a list of not less than two and not more than three candidates for the office of member and Chairman of the Authority to the President and the President shall appoint one of the candidates proposed as member and Chairman of the Authority.”
26. Chairman PSAB (original constitution)
Article 148(2): “Where the two members of the Public Service Appeal Board appointed under clause (1) (a) are unable to agree on the appointment of the third member and Chairman of the Board, the two members shall, within fourteen days after the end of the period specified in clause (1)(b), propose a list of not less than two and not more than three candidates for the office of member and Chairman of the Board to the President and the President shall appoint one of the candidates proposed as member and Chairman of the Board.”
27. These were later amended in 1996 but the emphasised section remains unchanged.
28. In the Constitution, when it was intended that a list be sent to the President for him to choose from this was made explicit.
29. This is further confirmed when one looks at the new provisions regarding the Electoral Commission. Article 115A(1) states: “The Commission shall consist of a Chairperson and four Members all of whom shall be appointed by the President selected from seven candidates of proven integrity and high repute, proposed by the Constitutional Appointment Authority constituted under Article 139 of the Constitution.” This provision explicitly gives the President the right to choose five from a list of seven.
30. There is nothing explicit in the provisions concerning the Attorney-General, the Ombudsmen, the Auditor-General and (in the original Constitution) the Electoral Commissioner.
31. The Constitution must be read as a whole: Sch 2 para 8(b). The fact that in some cases the requirement of a list was made explicit but that in others nothing explicit was said must mean that in those later cases there is no obligation to give a list of names.
32. Therefore, the CAA is free but not obliged to give the President more candidates than there are vacancies and the President cannot refuse to appoint someone proposed by the CAA (even if the CAA proposes only one person).
33. In all the following the President clearly has a discretion to refuse to do what the CAA wants.
34. Advisory Committee
Article 61: “There shall be an advisory committee on the power of pardon under Article 60 which shall consist of not less than three and not more than five persons as may be appointed for a term of seven years by the President from candidates proposed by the Constitutional Appointments Authority.”
35. Acting Justice of Appeal
Article 124(2)(d): “the President may appoint a person from candidates proposed by the Constitutional Appointments Authority to act as Justice of Appeal until ...”
36. Acting Judge of SC
Article 128(2)(d): “the President may appoint a person from candidates proposed by the Constitutional Appointments Authority to act as a Judge”
37. Renewal of term
Article 131(4): “The President may, on the recommendation of the Constitutional Appointments Authority in exceptional circumstances, appoint a person who is not a citizen of Seychelles and who has already completed one term of office as a Justice of Appeal or
Judge for a second term of office, whether consecutive or not, of not more than seven
38. Removal of judges pending
Article 134(4): “Where under this Article the question of removing a Justice of Appeal or Judge has been referred to a tribunal, the President may suspend the Justice of Appeal or Judge from performing the functions of a Justice of Appeal or Judge, but the suspension -
a. may, on the advice of the Constitutional Appointments Authority, be revoked at any time by the President;
b. shall cease to have effect if the tribunal recommends to the President that the Justice of Appeal or Judge ought not to be removed from office.”
39. In addition, as stated above, in cases concerning the Chairmen of the CAA and of the PSAB and the Electoral Commission the President has a limited discretion. He must appoint someone from the list he is given but he cannot refuse to appoint the requisite number of people.
40. The following two provisions are somewhat ambiguous as to whether the President has a discretion or not.
41. Acting President of the CA
Article 124(1)(c): “the functions of the office of President of the Court of Appeal shall be performed by a justice of Appeal appointed for the purpose by the President from Justices of Appeal proposed by the Constitutional Appointments Authority.”
42. Acting CJ
Article 128(1)(b): “until the person holding that office has resumed the functions of that office, as the case may be, the functions of the office shall be performed by a Judge appointed by the President from Judges proposed by the Constitutional Appointments Authority.”
43. The two above do not contain either “the President may” or “the President shall”. Furthermore they are found in two Articles which also contain a discretionary power of appointment (for acting Justices of Appeal and acting Judges respectively). Nevertheless it is submitted that they are mandatory.
44. Firstly, the “shall” of “shall be performed by” applies also to “appointed by the President”.
45. Secondly, the administration of Justice requires that there be a Chief Justice and a President of the Court of Appeal. This is unlike Acting Justices or Acting Judges, those are not essential. If these Articles were interpreted as discretionary then there could be a situation where the President keeps on refusing to appoint anyone and so Seychelles is left with no Chief Justice or President of the Court of Appeal. Therefore, those Articles are mandatory.
46. Why is it that some provisions are mandatory and others are discretionary? The purpose of the having an independent body, the CAA, involved in appointments is to ensure that political considerations do not influence the appointment to positions which require independence.
47. When independence is not required or the threat to independence is minimal the provisions are discretionary. Otherwise they are mandatory. I will show this by taking the discretionary provisions in turn.
48. Advisory committee
As the name states this a committee to advice the President on the exercise of a power which is under his prerogative, the power of pardon. There is no need for the committee to be particularly independent. Hence a discretionary power.
49. Acting Justices and Judges
These positions are temporary and not permanent. Furthermore the President must still appoint someone proposed by the CAA. This preserves independence. All the President can do is to refuse to make someone an Acting Justice or Judge. The threat to independence is minimal.
50. Renewal of term
The person in question would have been appointed to his first term using a mandatory provision. That person is then independent. Further the CAA must still recommend the re-appointment of that person. The threat to independence is then in such cases minimal.
51. Removal of judges pending
This deals to a case where a judicial officer is being investigated by an independent tribunal appointed by the CAA. The judicial officer has not yet been found guilty, but the President has suspended him during the investigation. The threat to independence created by the fact the President can ignore the CAA's advice to revoke the suspension is once again minimal.
52. Only if the CAA acted ultra vires in its proposal. In such a case the President has the duty to refuse to appoint. This is because the CAA's proposal is then a nullity: Anisminic v Foreign Compensation Commission  2 AC 147. If in those circumstances the President were nevertheless to appoint the person proposed then he would be acting ultra vires and hence unconstitutionally. Hence he is under a duty not to appoint if the CAA acted ultra vires.
53. There is of course nothing improper (or, at any rate, nothing unlawful or unconstitutional) with the President, on being told by the CAA who its candidate is, asking the CAA to reconsider the matter. However, the CAA is perfectly entitled to insist on its proposal. The President is then obliged to appoint.
54. If the President refuses to do so then it is open to the CAA, the person proposed or anyone else having locus standi to apply to the court for the writ of mandamus to force the President to appoint the person.
55. In the recent case of James Michel et al and Justice Domah v Viral Dhanjee SCA 5 and 6/2012 the majority of the Court of Appeal held that, in a case concerning reappointment under Article 131(4) (which as argued above is discretionary), the President could appoint for a longer term as the one recommended by the CAA.
56. Twomey J stated at : “[I]t is the President and not the CAA who appoints and decides on the length of the term of appointment. The CAA's duties are to recommend in exceptional circumstances for reappointment the non-Seychellois judge. It is not their prerogative to dictate to the President how long the term should be.”
57. I believe this is correct. This, however, does not apply to instances where the President has no discretion to re-appoint. In those cases the President's role is, essentially, one of rubber stamping (though he is free to ask the CAA to reconsider). It is the CAA that really does the appointing and so the President is bound to give effect to the term proposed by the CAA (of course, once again, he is free to ask the CAA to reconsider).
58. In most instances, including in particular cases about appointment of judges, the President has no discretion to refuse to appoint a person proposed by the CAA, unless the CAA has acted ultra vires. In addition, the President has to appoint for the length of time suggested by the CAA. Furthermore, the CAA does not have to give him a list of people to choose from.
59. If the President refuses to appoint, then the courts can issue a writ of mandamus forcing him to do so. The President may, however, ask the CAA to reconsider but the CAA is entitled to insist on its initial proposal.
60. There are limited cases where the President has a discretion about whether to act on the CAA's proposals. These, however, all concern cases where independence is not required or the threat to independence is minimal. All other instances are mandatory or give limited discretion to the President. This is done to protect independence.
61. This conclusion is consistent with the fact that the CAA is named the Constitutional Appointments Authority and not the Constitutional Recommendation Authority.
Rajiv Shah is a third year law student at University of Cambridge (Downing College). He holds a Bachelor's degree in Mathematics from Warwick University.
By Ms Teresa Micock
On the 24th of July 2012, the National Assembly conducted its first reading of the Legal Practitioners (Amendment) Bill 2012, a Bill which aims to amend the laws governing the practice of lawyers in Seychelles. Practicing lawyers and the Bar Association of Seychelles are aware of the need to advance the legal profession to make Seychelles more competitive in the global market, in particular in relation to financial services. However, this Bill in its proposed form will negatively affect clients and Seychellois students:
1. Some lawyers may not be required to complete Seychelles legal training to practice Seychelles ‘corporate and finance law’;
2. Seychellois, including law students studying at the University of Seychelles are required to meet more stringent qualification requirements than non-Seychellois.
1. Seychelles law is unique in that it incorporates elements of both the French civil code and the English common law system. This is particularly the case with business transactions. When a lawyer reviews an investment that a client is making, whether it is for a mortgage when a client is taking out a loan or when setting up a company and writing up contracts for a business, the lawyer must review these transactions in view of Seychelles’ particular system of law. Most lawyers in Seychelles studied outside of Seychelles. Therefore a system of 2 years practical work experience (pupilage) was established so that a qualified practicing lawyer can help a new lawyer obtain the skills necessary to practice, not just as an attorney at law, but also as an attorney at law in Seychelles.
The new law allows a barrister or solicitor from a commonwealth jurisdiction with at least three years experience to be exempt from pupilage on the condition that they practice a foreign law or Seychelles corporate or finance law only. This has two significant problems. First, is that corporate and finance law is defined in the Bill by listing a number of acts. In doing this it ignores the underlying laws upon which all of the laws are based, in particular the commercial and civil codes. It is during pupilage that Seychelles lawyers are guided by experienced lawyers to accustom themselves with the basics of our laws. Second, under the Bill, lawyers exempt from pupilage do not have to undertake any test to show knowledge of Seychelles law. Nor do they even have to show experience in ‘corporate and finance law’ in the country they are from. Corporate and finance law would require a higher level of competence rather than a watering down, as this Bill seeks to do. Clients, when investing their money, need to be sure that their lawyers are competent in Seychelles.
2. A new system as drafted will create two classes of lawyers. Law students of the University of Seychelles, and all Seychellois who have studied law at an undergraduate level must complete vocational training and pupilage before they can be registered as attorneys at law. Seychellois lawyers will be required to complete the full legal training requirements when foreign attorneys will be able to immediately practice. The legal market will be flooded with substandard lawyers, whilst Seychellois students will be completing their full training.
These are two problems with the Legal Practitioners (Amendment) Bill 2012 that will directly affect clients and Seychellois students. There are many other problems with the Bill ranging from careless drafting mistakes to other substantive problems which directly affect the profession. Clients trust that legal professionals are competent to deal with their transactions. Lawyers admitted under this Bill cannot guarantee this.
Teresa Micock is an Attorney-at-Law of the Supreme Court of Seychelles and practices at the law firm of Pardiwalla Twomey Lablache. She completed her LLB at the University of Sussex and was called to the Bar at Gray's Inn. She is the Treasurer of the Bar Association of Seychelles.
(End Note: The Bill was subsequently withdrawn at the second sitting with the Leader of Government Business stating that more time was needed to consult upon the effects of the Bill).
Was the President right in re-appointing Mr. Justice Dr. Domah as a Justice of the Seychelles Court of Appeal?