El-Khouri v Government of the United States of America [2025] UKSC 3 (12 February 2025)

Mr El-Khouri, a UK/Lebanese national, faced US extradition for alleged insider dealing. The Supreme Court ruled the conduct occurred outside the US, requiring the stricter double criminality test under section 137(4) of the Extradition Act 2003, which was not satisfied. His extradition was refused.

Facts

Mr El-Khouri, a dual UK/Lebanese national residing in the United Kingdom, was accused by the United States of insider dealing. The US sought his extradition to face prosecution for securities fraud, wire fraud, and conspiracy. The allegations were that he received inside information about prospective mergers from middlemen connected to investment bank employees in London, and used this information to trade contracts for difference (CFDs) with a UK-based broker, making profits of nearly US$2 million. Almost all the alleged conduct occurred in the United Kingdom; only a hotel payment in New York was made on US soil.

UK Investigation

The Financial Conduct Authority investigated Mr El-Khouri between 2016 and 2018 but concluded there was insufficient evidence to prosecute.

Issues

The central issue was whether Mr El-Khouri’s alleged conduct constituted an ‘extradition offence’ under section 137 of the Extradition Act 2003, specifically whether the double criminality requirement was satisfied. The key questions were:

• Did the conduct occur ‘in’ or ‘outside’ the United States for the purposes of section 137?
• Which subsection (section 137(3) or section 137(4)) applied?
• Was the relevant double criminality test satisfied?

Judgment

The Supreme Court unanimously allowed the appeal and ordered Mr El-Khouri’s discharge.

Interpretation of Section 137

The Court held that subsections 137(3) and (4) are mutually exclusive. The word ‘conduct’ refers to where physical acts were done, not where their effects were felt. The Court departed from obiter dicta in Office of the King’s Prosecutor, Brussels v Cando Armas [2006] 2 AC 1, which had suggested conduct could occur ‘in’ a territory if its intended effects were felt there.

Application to the Facts

Since all relevant conduct occurred in the United Kingdom (not the United States), section 137(4) applied, not section 137(3). The test under section 137(4)(b) requires that equivalent conduct occurring outside the United Kingdom would constitute an extra-territorial offence under UK law.

Double Criminality Not Satisfied

The Court found that equivalent conduct would not constitute insider dealing under section 52 of the Criminal Justice Act 1993 because none of the territorial conditions in section 62(1) would be met on the transposed facts. The Court also rejected arguments that offences under section 329 of the Proceeds of Crime Act 2002 have extra-territorial effect, disapproving the decision in R v Rogers [2015] 1 WLR 1017.

Implications

This judgment clarifies the operation of the double criminality rule in extradition cases under the Extradition Act 2003. It establishes that the location of conduct must be determined by where physical acts occurred, not where their effects were felt. The decision provides important guidance on distinguishing between section 137(3) and section 137(4), ensuring that extra-territorial jurisdiction claims by requesting states are properly scrutinised against UK standards. The case also corrects previous misinterpretation of the extra-territorial scope of money laundering offences under the Proceeds of Crime Act 2002.

Verdict: Appeal allowed. Mr El-Khouri was discharged and the extradition order was quashed. The conduct did not constitute an extradition offence as the double criminality requirement under section 137(4)(b) of the Extradition Act 2003 was not satisfied.

Source: El-Khouri v Government of the United States of America [2025] UKSC 3 (12 February 2025)