Supreme Court clarifies double criminality in jurisdictional overreach case

The recent decision by the Supreme Court marks a significant development in the UK’s extradition laws and sheds light on the concept of “double criminality.” In the case of El-Khouri v Government of the United States [2025] UKSC 3, the court rejected an extradition order for a dual UK-Lebanese national facing insider trading charges in the US, challenging long-standing interpretations of the extraterritorial reach of UK money laundering laws.

The defendant, in this case, is accused of engaging in insider dealing by making payments to middlemen who obtained confidential information about US-listed stocks from bank analysts based in London. These individuals allegedly shared their information in various locations, including London and Paris. The defendant used this information to trade contracts for differences (CFDs) based on anticipated stock price movements on US exchanges. Importantly, all transactions took place in the UK, with no trades being conducted in the US. The connection to US jurisdiction stemmed from payments made by the defendant to a middleman for hotel stays in New York.

While the UK’s Financial Conduct Authority (FCA) investigated the matter and found insufficient evidence for prosecution, a grand jury in New York City indicted the defendant on multiple securities fraud charges. This led to an extradition request to the UK, which was initially approved by the Westminster Magistrates’ Court and subsequently upheld by the High Court despite the defendant’s objections based on the double criminality requirement.

Under the Extradition Act 2003, which governs extradition proceedings from the UK, the US falls under “category 2 territories.” The Act’s Section 137 outlines the conditions under which conduct may constitute an “extradition offence” and includes the essential principle of double criminality. The requirement is twofold: the alleged conduct must constitute a crime in both the requesting state (US) and the requested state (UK).

At the heart of the appeal to the Supreme Court was the interpretation of Section 137(3), which addresses conduct occurring “in” the territory of the requesting state. The defendant contested the application of this section, arguing that the conduct did not meet the requirements set out in Section 137(3)(b) for extradition. The Supreme Court, however, hinted at a possible misinterpretation of the jurisdictional scope at the outset of the hearings, prompting a reevaluation of the case.

Ultimately, the Supreme Court’s decision centered on whether the lower court’s assessment of the extradition offense criteria under Section 137(3)(b) was valid. While the focus of the proceedings initially revolved around Section 137(3), the court raised questions regarding the applicability of Section 137(4) and the validity of prior case law concerning the location of relevant conduct.

In conclusion, the Supreme Court’s ruling in El-Khouri v Government of the United States [2025] UKSC 3 signifies a crucial clarification of the double criminality principle and challenges assumptions about the extraterritorial application of UK laws in extradition cases. This decision serves as a check on potential jurisdictional overreach and underscores the importance of legal precision in cross-border criminal matters.