Trade

Prohibition on trading with Iraqi residents transaction with defendant resident in Iraq defendant subsequently changing residence transaction illegalShanshal v Al-Kishtaini CA: Lords Justices Mummery and Rix and Mr Justice Holman: 23 February 2001The Control of Gold, Securities, Payments and Credits (Republic of Iraq) Directions 1990 (SI 1990/1616), by article 2, prohibited payment to any person resident in Iraq at the time the directions came into force or at any later time while they were in force.The claimant sought to recover DM113,569 as money owed under a contract made in 1990.

At the time of the making of the contract the defendant was resident in Iraq, although he had ceased to reside there by the time the transaction was executed.

The defendant argued that the claim was based on illegality because the transaction contravened the 1990 directions.

The judge held that because the defendant had ceased to reside in Iraq by the time that the transaction had taken place there was no illegality.

The defendant appealed.Martin Young (instructed by Browne Jacobson) for the claimant; Philip Marshall (instructed by Gordon Dadds) for the defendant.Held, allowing the appeal, that the natural and ordinary effect of the language of the legislation was that persons who are resident in the specified country at the time the directions came into force or at any later time were and remained affected by the direction and those persons could not escape the consequences of residence at the specified times by later changing their residence to another country, unless and until the requisite Treasury permission was obtained; that the prohibition on trading with residents of Iraq did not cease to apply, in relation to a person resident there when the prohibition came into force, when that person ceased to be a resident in Iraq; and that, in accordance with this, the claimants claim was held to be illegal