English Court of Appeal clarifies scope of making orders in support of extra-jurisdictional proceedings

Following Brexit and the landmark decision of the Privy Council in Broad Idea International v Convoy Collaeral [2021], the English Court of Appeal confirmed that it would ordinarily be "inexpedient" to make a worldwide freezing order where respondents are neither resident nor have assets within the jurisdiction.

The Court of Appeal has dismissed an appeal to overturn the setting aside of a worldwide freezing order made without notice against a number of defendants.

Freezing orders

This case concerned a worldwide freezing order, which had been made in support of Scottish proceedings pursuant to section 25 of the Civil Jurisdiction and Judgments Act 1982. 

At first instance, the freezing order had been set aside on the grounds that:

• although the claimant had established a good arguable case on the merits of the claim, it had failed to show a sufficient risk of unjustified dissipation;
• it was "inexpedient" to grant a freezing order in view of the absence of any connection with England and Wales; and
• the freezing order ought to be set aside in any event as the claimant had failed in its duty of full and frank disclosure at the ex parte stage of the injunction proceedings. 

The claimants sought to appeal the decision and rely on new evidence, which had not been available to the first instance court and was obtained as a result of a search order in the Scottish proceedings. 

A connection to England and Wales 

On considering the new evidence, the Court of Appeal held that it was sufficient to demonstrate at that stage (albeit without making a final decision on either points) that the claimant was able to satisfy the requirements of having a good arguable case against and a real risk of dissipation by the respondents. 

However, following a detailed discussion on the position at common law and the impact of legislation introduced following Brexit, the Court of Appeal confirmed the decision of the first instance judge that none of the respondents had any significant or meaningful current connection to England and Wales. As a result, it was inexpedient to grant a worldwide freezing order against them. 

Full and frank disclosure 

Furthermore, the Court of Appeal agreed that there had been serious failures of full and frank disclosure on behalf of the claimant at the time of the without notice injunction application. These failures themselves justified the setting aside of the freezing order and declining to regrant it. 

The court cautioned, however, that litigants would need to identify specific points of issue, as opposed to merely presenting a long 'shopping list' of alleged failures of disclosure that took "as much, if not more, time as the substantive issues". This was not "a sensible or proportionate way in which to address this sort of allegation" (paragraphs 126-127). 

Osborne Clarke comment 

This case is relevant to practitioners considering freezing injunction applications in England and Wales in support of extra-jurisdictional proceedings (including other countries within the United Kingdom). 

In particular, there needs to be sufficient links between the respondents and England and Wales to justify a freezing order being granted. 

Great caution should also be exercised when exercising the duty of full and frank disclosure at the ex parte stage of injunction proceedings as sufficiently material breaches could justify a discharge.