On October 21, 2015, the UK Supreme Court considered the case of United States of America v Nolan. The case gave thought to whether a statutory instrument made under section 2 of the European Communities Act 1972 could effectively be deemed to amend a UK Act of Parliament. It was held that the ECA was wide enough for a statutory instrument to be effective in this way, however the Court found that the question was “difficult and borderline”. The EU Financial Collateral Directive was implemented in the UK via the Financial Collateral Regulations 2003, a statutory instrument that was also made under the same section of the ECA. The Directive relates to title transfer financial collateral arrangements and security financial collateral arrangements made between certain classes of qualifying persons. Lord Mance considered previous case law on section 2 of the ECA, and in particular the decision taken in Cukurova Finance International Ltd v HM Treasury which related to the FCR. Lord Mance considered that Cukurova's unsuccessful challenge was “greatly underestimated”, suggesting that it may have been wrongly decided and casting doubts on the enforceability of certain aspects of the FCR. In our view, these remarks are obiter dicta, given that the particular situation of these regulations was not at issue in the case.

The decision in USA v Nolan is available at: http://www.bailii.org/uk/cases/UKSC/2015/63.html.