Cross Border Injunctions after Brexit

In this post, Steven Gee Q.C. of Monckton Chambers considers cross border injunctions after Brexit and the case of Broad Idea International Ltd v Convoy Collateral Limited [2022] 1 AER 289 (Privy Council).

“…increasingly sophisticated foreign-haven judgment proofing strategies, coupled with technology that permits the nearly instantaneous transfer of assets abroad, suggests that defendants may succeed in avoiding meritorious claims in ways unimaginable before the merger of law and equity.” (Justice Ginsburg)

Broad Idea

 In Broad Idea International Ltd v Convoy Collateral Limited [2022] 1 AER 289 (Privy Council) (“Broad Idea”) Mareva relief had been granted in the High Court in BVI against a BVI company, Broad Idea, in respect of shares consisting of a minority interest (18.85%) in a Bermuda exempted company quoted on the Hong Kong stock exchange. which Broad Idea held and which it was argued could be used to satisfy an eventual Hong Kong judgment against Dr Cho which would be enforceable in BVI.  The case argued below was that the shares were owned beneficially by Dr Cho. There was no substantive claim against Broad Idea.

BVI has not been part of the EU or the Brussels-Lugano regime. It had no legislation corresponding to UK’s s. 25 of the Civil Jurisdiction and Judgments Act 1982 (“s. 25 CJJA 1982”). The Court of Appeal of the Eastern Caribbean (“ECCA”), concluded that there was no proper evidence to support the judge’s finding that there was a good arguable case that the shares held by the BVI company were beneficially owned by Dr Cho. Dr Cho had only 50.1% of the shares in the BVI company, there was no evidence that its assets were owned beneficially by Dr Cho and no good arguable case that its assets could be reached on enforcement of a future judgment against him.

There already was a Hong Kong injunction granted on appeal, restraining Dr Cho from disposing of his shares in Broad Idea, and it was not shown on the facts that there needed to be in addition an injunction against Broad Idea to restrain it from disposing of a minority interest (18.85%) in the shares of a Bermuda exempted company quoted on the Hong Kong stock exchange. An alternative theory that the injunction against Broad Idea was necessary to make effective the Hong Kong injunction against Dr Cho had not been argued below, and if it was to be advanced would have required up to date evidence and an application to the Hong Kong and/or BVI court.  If there is Mareva relief over shares against the shareholder, acts which diminish the value of the shares may be in breach of the injunction. These may include disposal of the company’s own assets. An injunction can be granted to prevent dealings with the company’s assets  so as to preserve the value of the shareholding, against which a future judgment could be enforced (normally by charging order). The seven Privy Council judges upheld the ECCA decision and dismissed the appeal because there was no good arguable case on the evidence for supporting the Mareva injunction over these assets on the basis that they were beneficially owned by Dr Cho.

The ECCA had also (1) followed Mercedes Benz AG v Leiduck [1996] AC 284 (“Mercedes”) (Privy Council) and  Siskina (Owners of cargo lately laden on board) v Distos Cia Naviera SA (“The Siskina”) [1979] AC 210 (House of Lords) holding that the injunctions gateway in the rules governing service out of the jurisdiction was limited to claims for final relief based on a substantive “cause of action”; and (2) set aside the Mareva relief on the ground that a BVI court has no power to grant a freezing injunction against a BVI company except as ancillary to proceedings for substantive relief brought in the BVI, overruling Black Swan Investment ISA v Harvest View Ltd (BVIHCV 2009/399) (unreported) 23 March 2010. Legislation had been passed in the BVI the to avoid the consequences of these holdings.

The board agreed with (1) on the gateway, and was divided on its reasoning in relation to (2), Black Swan. Both the majority at [64-70] and the minority [189-201] as ratio declined the invitation to depart from the majority in Mercedes and held that the BVI rule allowing service out of the jurisdiction did not include  a free standing claim for Mareva relief, being a claim not ancillary to a substantive claim to an injunction based on a “cause of action”. It was too long since Siskina and Mercedes to entertain departure from them.  

On (2), the majority accepted that in principle a Mareva injunction may be granted against a party resident in the BVI who controls assets against which a future foreign judgment could be enforced, and expressed the view that the BVI court did have jurisdiction to grant such relief notwithstanding that there could not be leave to serve him out of the jurisdiction with the substantive claim in BVI proceedings. In doing so the majority approved conceptually of free standing proceeding brought against a non party for a Mareva injunction. It considered that where the High Court of the BVI had personal jurisdiction over a person, the court has power to grant a freezing injunction against that person to assist enforcement through that court’s process of a prospective (or existing) foreign judgment, and regardless of whether that person was not a defendant to substantive proceedings in the BVI or abroad. In Broad Idea the prospective Hong Kong judgment would be enforceable in BVI. The injunction could have been granted at [94-95, 101] to ensure that the process of enforcement in BVI would be effective when engaged.

The majority judgment considered that the injunction jurisdiction should not be limited to cases where the applicant has a “cause of action” for substantive relief and an injunction can be granted against a person who can be served within the jurisdiction in respect of assets within the jurisdiction for this purpose. An injunction can be granted for the purpose of preventing conduct which could result in failure to satisfy an eventual English judgment or order, thereby interfering with the due administration of justice in England. This is a legitimate purpose when made out on the evidence, sufficient to justify the granting of an injunction against someone subject to the territorial jurisdiction of the court, subject to questions going to discretion.

It also considered that for Mareva relief it was not necessary to show a right to be paid money or an accrued “cause of action”, disapproving of  Steamship Mutual Underwriting Association (Bermuda) Ltd v Thakur Shipping Co [1986] 2 Lloyd’s Rep 439 (Note) ; Veracruz Transportation Inc v VC Shipping Co Inc (The Veracruz I) [1992] 1 Lloyd’s Rep 353 ; and Zucker v Tyndall Holdings plc [1992] 1 WLR 1127 . This had been based on the Mareva injunction being ancillary to the right to payment or accrued cause of action on which substantive proceedings could be brought.

A distinction must be drawn between what the court can do as a matter of jurisdiction to grant injunctions and how that jurisdiction may be exercised as a matter of discretion: this changes as the world changes. The Court of Chancery at the time of North London Railway Co v Great Northern Railway Co ((1883) 11 QBD 30, 39-40. The majority at [145-146] considered that the judgment of Cotton LJ in that case expressly envisaged that an injunction could be granted under what was s. 25 (8) of the Judicature Act 1873 which would not have been granted under the rules previously applied by the Chancery court.) protected rights of property and identified, accrued substantive rights. The discretion to grant an injunction used to be exercised according to fixed and settled rules. The absence of Mareva jurisdiction provided certainty and was one of those rules. The injunction jurisdiction must be flexible and accommodate changed circumstances in the modern world [41,59-61], a point also made by the minority at [206-209, 213].

The minority of three considered that the board should not decide on the appeal whether there is power, and it is consistent with equitable principles, for the court to grant a freezing injunction against a defendant in aid of foreign proceedings when no substantive claim is made against that defendant in proceedings before the domestic court. The minority considered that it was not appropriate to decide whether there was power to grant free standing Mareva relief against a non party subject to the personal jurisdiction of the BVI court, to preserve assets in contemplation of enforcement in the BVI of a future foreign judgment. This was because it was unnecessary to decide the point for the purpose of deciding the appeal, which failed on its facts. Their abstinence was based on (1) at [221]  on the difference between having to decide a point as a matter of ratio and the position of a court which does not need to decide a point and which may nevertheless include dicta as part of its reasoning, and a concern on whether the majority view would be binding on lower courts; (2) at [222] on whether the Board had heard full argument on what would be the consequences of the majority view  in several jurisdictions which have changed their laws in response to the decisions in The Siskina and Mercedes; and (3) at [223] on the circumstance that the majority had  “..sought to provide a juridical foundation for the entire law of freezing and interlocutory injunctions, when the argument …[had been] limited (at most) to freezing injunctions in general and the circumstances of the Broad Idea case in particular.”

A decision of the Privy Council is persuasive authority in England. It does not entitle the Court of Appeal or lower courts not to follow binding ratio of Supreme Court/ House of Lords/ Court of Appeal decisions. The reasoning of the majority is strong persuasive authority for future cases in England. The ratios of Siskina and Mercedes were confined to the width of the gateway in the relevant rules on service out of the jurisdiction. These have been followed in Broad Idea. The decisions in Veracruz Transportation Inc v VC Shipping Co Inc (The Veracruz I) [1992] 1 Lloyd’s Rep 353 ; and Zucker v Tyndall Holdings plc [1992] 1 WLR 1127 decided that there had to be an “accrued” cause of action. This proposition has been diluted in later case law and subjected to exceptions (e.g it is sufficient for there to be a present debt albeit there has not been a default in payment) , the decisions could be limited to their particular facts, and there is the possibility of a leapfrog appeal to the Supreme Court.

Whilst the minority declined to add their imprimatur, reserving consideration for a future case, the reasoning of the majority is cogent. The words “cause of action” are a convenient legal label which refer to factual ingredients necessary to establish entitlement to substantive relief. There was a time when it was thought that injunctions were to protect property rights or ancillary to an accrued cause of action for substantive relief. In Broad Idea at [52] the majority required “..[1] an interest of the claimant which merits protection and [2] a legal or equitable principle which justifies exercising the power to grant an injunction to protect that interest by ordering the defendant to do or refrain from doing something..” (numbering inserted). Another way of expressing this is that an injunction has to be justified as made for a proper purpose. In modern times the only right may be to apply for the exercise of the jurisdiction to grant an injunction for a proper purpose.  The case shows that what is required for an injunction to be granted is not frozen at some time in the past.  The categories of case are not closed.  Changes in the world require new solutions. Broad Idea at [58] “…pursuant to general equitable principles injunctions may issue in new categories when this course appears appropriate.”   

In Australia  a freezing order may be made in anticipation that sometime in the future there will be enforcement of a judgment in Australia ( PT Bayan Resources TBK v BCBC Singapore Pte Ltd 258 CLR 1), and the majority took the same view in respect of freezing relief, including Mareva injunctions, in the BVI and in England and Wales. Similar law can be found in other common law jurisdictions. 

Examples of purposes justifying injunctions show how wide the jurisdiction is, not just in a theoretical sense, but also on a practical level:

(i) protecting or enforcing a legal or equitable right, including proprietary rights and rights in respect of trust assets, and enforcing con-tracts including arbitration agreements and exclusive jurisdiction clauses. If there is no right to be protected, no injunction can be grant-ed to protect it. What can be said is that where there is a right which the law protects, the court can grant a remedy (ubi jus ibi remedium); what cannot be said is that because the claimant points to a remedy, therefore he has a right. If there is no proper basis to ground the in-junction, no injunction will be granted. The divorced Earl had no right to prevent his former wife calling herself his Countess and a man has no right to a view.

(ii) ancillary to enforcement of a judgment (also known as “equitable execution”);

(iii) to prevent vexatious, oppressive or unconscionable conduct; This is particularly important with anti suit injunctions and restraining non -parties to the clause.

(iv) to protect the court’s own jurisdiction or processes, or to prevent abuse of process;

(v) to prevent unjustified dissipation of assets resulting in a judgment being left unsatisfied;

(vi) preventing, or reversing the effects of, a contempt of court in respect of an injunction granted to the applicant, or preventing breach of an undertaking given to the court;

(vii) to prevent exorbitant intrusion into the English jurisdiction by a foreign court; e.g. A US court interfering with the winding up jurisdiction and holding directors to account.

(viii) ancillary to make effective other relief granted by the court, and to facilitate the due administration of justice. An example is information orders ancillary to a freezing injunction;

(ix) to protect a child who is at risk;

(x) to implement a statutory regime (e.g. insolvency regimes, prevention of harassment and preventing costs being funded by the company on an unfair prejudice petition under s.994 of the Companies Act 2006);

(xi) to implement an important English public policy (e.g. protecting the right of employees to access an English court or tribunal on an employment claim);

(xii) to reverse the effects of an unlawful or wrongful act; for example to require conveyance back of property disposed on in breach of covenant or in breach of an injunction, or to restore the position to what it was before a defendant altered it by such an act.

(xiii) to grant ancillary relief in aid of proceedings in a foreign court or an arbitration abroad (s.25(1) of the Civil Jurisdiction and Judgments Act 1982 and s.2(3) of the Arbitration Act 1996);

(xiv) to enforce an equitable duty upon a person who had innocently become mixed up in the wrongdoing of another, so as to facilitate that wrongdoing, to provide, upon reasonable request, assistance to the victim of the wrongdoing, and to prevent his facilities being used to commit a wrong;

       (xv) to prohibit specified future wrongdoing by “persons unknown”. They may be unknown because their identity is not known or because they only come within the scope of the order as a result of their future conduct.

Section 25 of the UK Civil Jurisdiction and Judgments Act 1982 was enacted soon after Siskina and provides statutory jurisdiction, originally in aid of proceedings in a Contracting State with subject matter within the Brussels Convention 1968.  It allows the granting of “interim relief” of any kind which [the High Court] has power to grant in proceedings relating to matters within its jurisdiction, other than—

a warrant for the arrest of property; or

provision for obtaining evidence.” 

This does not exclude interim relief designed to give the applicant information, so as to preserve assets or make an injunction effective e.g. about the location of assets which are or may be frozen. Interim relief includes and is not confined to an interim injunction.

This has subsequently been extended by statutory instrument to civil proceedings with widely defined subject matter, in a foreign court anywhere in the world . The person against whom the relief is sought does not have to be a defendant to the foreign proceedings. There is also jurisdiction to grant interim relief in respect of foreign arbitration proceedings . “The power conferred by section 25(1) of the 1982 Act is of enormous breadth. It has even been exercised to grant a worldwide freezing injunction in connection with foreign proceedings against a foreign defendant with no known assets in England and Wales: see Republic of Haiti v Duvalier [1990] 1 QB 202 (where the only link with England and Wales was the fact that the defendant had used the services of an English solicitor)”: Broad Idea at [18]. In view of the statutory instrument it is questionable whether the amendment in contemplation of Brexit made to s. 25 to make it applicable in cases governed by the Hague Convention 2005 on choice of court clauses, was required.

The jurisdiction under s. 25 does not depend on a threat to abuse of the process in England nor does it require proof that an eventual foreign  judgment may be enforceable in England. The court normally  (1) has to consider if the facts would justify the relief sought, if the substantive proceedings had been brought in England; in particular, in a Mareva case whether the claimant had shown that there was a good arguable case, and a real risk of dissipation; and (2 if the answer to that question is in the affirmative, then, the court goes on to consider whether, in the language of s.25(2), the fact that the court has no jurisdiction apart from the section (i.e. the fact that the substantive proceedings are abroad) makes “inexpedient” for the purposes of s.25(2) to grant the relief.

The Brussels Lugano regime provides for mutual recognition and enforcement of judgments and orders including or interim orders, the granting of interim relief by an EU court other than the court having jurisdiction on the merits,  and does so without interfering with the court seized with the substantive merits to determine the dispute. Cross border mutual recognition and enforcement of orders by courts of Member States is integral to the Brussels Lugano regime.  Brexit has removed the UK from the regime, and has left in force jurisdiction in the UK under s. 25 CJJA 1982,  and the breadth of the UK injunction jurisdiction including acting ancillary to foreign court or arbitral proceedings anywhere in the world.

Mutual co-operation of courts cross border enables justice to be done. This policy underlies s. 25 and its extending statutory instrument. In relation to interim orders:

The New York Convention 1958 applies to recognition and enforcement of arbitration agreements and arbitral awards. The New York Convention 1958 has 169 “state parties”, including 166 of the 193 States in the United Nations. The readiness of states to ratify is because of its simple universal aims . It does not have provisions for mutual recognition and enforcement of interim  orders made by an Arbitral Tribunal or by a court including the supervisory court at the seat of the arbitration. The need for this is recognised in recognised by state legislation  (e.g. s. 2(3) Arbitration Act 1996 (England);

The Hague Convention on choice of court agreements only applies to exclusive jurisdiction clauses and excludes from its ambit interim orders. It has been adopted in the EU, UK, Mexico and Singapore. Section 25 has been amended so as to apply specifically to Convention cases proceeding abroad.

Restraining a person from committing what arguably would or could be a contempt of court if committed is granted for the purpose of furthering the due administration of justice, by making certain what cannot be done, avoiding unnecessary contempt proceedings  and operating as effective preventative justice.  This and the Mareva jurisdiction are illustrations that protecting the present and future due administration of justice in England can be a proper purpose justifying the use in England of the injunction jurisdiction.

The principles which govern the availability of injunctions provide a measure of certainty, transparency, judicial consistency, and implementation of coherent policies. These include the use of injunctions to protect or enforce substantive property and other legal rights, unaffected by Broad Idea. The principles developed judicially, and so subject to the constraints of precedent, must and do accommodate change. Section 24 (1) of the BVI Act conferring on the court jurisdiction to grant injunctions was substantially in the form of the English legislation conferring jurisdiction to grant injunctions, originally in s. 25 (8) of Judicature Act 1873,  prior to enactment of UK s. 37(1).   In Broad Idea changing circumstances were founded upon by the majority as justifying the decision and other changes in the jurisdiction to grant interim remedies at [59-60]. Major changes identified were the ease with which wealth can be moved, globalisation, and growth in offshore or secret wealth structures.

Cyprus has followed persuasive precedent from England on interim remedies, including Mareva injunctions, injunctions against non parties and Norwich Pharmacal relief. Its injunction jurisdiction is conferred by legislation in similar terms to s. 25 (8) Judicature Act 1873 and its successor, section 45(1) of the Supreme Court of Judicature (Consolidation) Act 1925.  It may soon have to decide new cases on its ambit. 

EU and UK sanctions involving the freezing of wealth have been done through detailed legislation. The issues addressed through that legislation have in civil proceedings and insolvency cases,  been addressed through judge made law and practice, as well as Civil Procedure Rules and Practice, and facilitating legislation. One issue is that relevant assets may not be owned or held by a defendant, or in the case of sanctions, a designated person. Often what has to be targeted under sanctions, and the Mareva jurisdiction, are relevant “resources”.  In the Mareva jurisdiction these can be assets which are not subject to any proprietary claim and which through some legal route or another can be made compulsorily to be made available to satisfy a judgment or be used for the benefit of creditors in an insolvency.

The Mareva Injunction

The Mareva jurisdiction started as an interim remedy against foreigners withdrawing their assets from the jurisdiction.  The decisions of the Court of Appeal presided over by Lord Denning M.R. led to Parliament intervening. Case law in England expanding the use of injunctions was adopted in other common law jurisdictions, and case law in those jurisdictions has also had consequences in the development of English law. It is not based on a claim to property.  It is often used in cases where there are money claims and property claims. Property claims are often in practice constrained by difficulties in tracing and identifying property and local law at where property is located.

An exception in common law jurisdictions on the availability of Mareva relief are the Federal courts in the United States. The argument that US Federal Courts had a preliminary injunction jurisdiction to grant Mareva relief conferred by the Judiciary Act 1789 was rejected by the US Supreme Court in a majority opinion of 5 justices given by Justice Scalia in Grupo Mexicano de Desarrollo, S. A. v. Alliance Bond Fund, Inc., 527 U.S. 308 (1999). In that case there was no defence to the claim, the default on the bonds was uncontested there were numerous bond holders, and the Mexican debtor was in fact satisfying Mexican creditors to the exclusion of others. Unchallenged evidence indicated that the debtor was so rapidly disbursing its sole remaining asset that, absent provisional action by the District Court, the plaintiff and other bond holders would have been unable to collect on the money judgment to which they were entitled . Interim relief was held not to be available  by the majority  on grounds that such an equitable jurisdiction was not in fact exercised in 1789 by the High Court of Chancery and that any change was a matter for Congress.  It is a static, frozen jurisdiction,  determined on what would have been done by the Chancery court  pre Revolution: “…Because such a remedy was historically unavailable from a court of equity, we hold that the District Court had no authority to issue a preliminary injunction preventing petitioners from disposing of their assets pending adjudication of respondents’ contract claim for money damages ..”. An additional supporting argument that the question was a matter for State law in a diversity case and not Federal law, had not been argued below and was not considered.

Justice Ginsberg speaking also for Stevens J, Souter J and Breyer J, dissented, agreeing with the Second Circuit Court of Appeals and the District Court, found jurisdiction in a changed world, as had the English courts :

“….We have consistently interpreted [the US Judiciary Act 1789 as conferring] on the district courts authority to administer … the principles of the system of judicial remedies which had been devised and was being administered” by the English High Court of Chancery at the time of the founding.

….. Chancery may have refused to issue injunctions of this sort simply because they were not needed to secure a just result in an age of slow-moving capital and comparatively immobile wealth. By turning away cases that the law courts could deal with adequately, the Chancellor acted to reduce the tension inevitable when justice was divided between two discrete systems. …… But as the facts of this case so plainly show, for creditors situated as [the plaintiff] is, the remedy at law is worthless absent the provisional relief in equity’s arsenal. Moreover, increasingly sophisticated foreign-haven judgment proofing strategies, coupled with technology that permits the nearly instantaneous transfer of assets abroad, suggests that defendants may succeed in avoiding meritorious claims in ways unimaginable before the merger of law and equity. …

The development of Mareva injunctions in England after 1975 supports the view of the lower courts in this case, a view to which I adhere. …[P]reliminary asset-freeze injunctions have been available in English courts since … 1975 ….. [T]he better-reasoned and more recent decisions ground Mareva in equity’s traditional power to remedy the “abuse” of legal process by defendants and the “injustice” that would result from defendants “making themselves judgment-proof” by disposing of their assets during the pendency of litigation…..”.

Justice Ginsburg echoed what had been stated by Lord Nicholls in Mercedes [1996] A.C. at p. 309:  “As circumstances in the world change, so must the situations in which the courts may properly exercise their jurisdiction to grant injunctions. The exercise of the jurisdiction must be principled, but the criterion is injustice. Injustice is to be viewed and decided in the light of today’s conditions and standards, not those of yester-year.” The reasoning is the same as a central part of the reasoning of the majority in Broad Idea. It is unaffected by the decision of the US Supreme Court based on its view under the 1789 Act the injunction jurisdiction given to the Federal courts was frozen to what in fact would have been done by the Chancellor before that date, as opposed to jurisdiction over a system of remedies governed by principles,  including within them the flexibility to accommodate change.

Freezing Injunctions against Non parties

The cases against non-parties started with a series of tax cases in Australia. In TSB Private Bank v Chabra ([1992] 1 W.L.R. 231. Third parties against whom there is no cause of action may be referred to as Chabra defendants) an injunction was granted over assets of a third party company which might be beneficially owned by the defendant.  Subsequently the Court of Appeal granted relief against a wife whose affairs had become mixed up with those of her judgment debtor husband. Its reasoning included reference to the Norwich Pharmacal jurisdiction. In Victorian times wharfingers and warehousemen could find themselves in possession of goods infringing a trade mark, sent by sea from abroad by persons unknown. The injunction jurisdiction was used against named persons within the jurisdiction who had possession of infringing articles,  to provide an effective remedy.  The need for this gave rise to an injunction jurisdiction regardless of whether the wharehouseman was an infringer.

The decision of the High Court of Australia in Cardile v LED Builders Pty Ltd ( (1999) 198 C.L.R. 381), basing itself on the inherent jurisdiction of the court to prevent abuse of its process, established a preservative jurisdiction which applies to any assets anywhere, which may, through one route or another, be applied to satisfy a judgment.  Cardile has been followed and applied in England. Offshore trust structures and companies, and Lichtenstein foundations, do not confer immunity against enforcement of a judgment. What appears to be a trust may be no trust at all.  A settlor may have side arrangements with lawyers or others enabling him to control who gets the benefit of the assets. Transfers into a structure might be avoided under s. 423 Insolvency Act 1986, a worldwide jurisdiction which replaced and extended the previous regime based on the Statute of Elizabeth I (13 Eliz. I c.5) on Fraudulent Conveyances. The majority in Broad Idea at [109] held that in principle an injunction could be granted against a transferee of assets where the transfer had been done to frustrate enforcement of a future judgment against those assets in the hands of the transferor and could potentially be reversed.  Assets are preserved leaving final decisions to be made on whether they can be reached, to be taken in proceedings for execution of a judgment, or in insolvency proceedings.

Orders for disclosure of documents and other information against Non Parties

The disclosure jurisdiction , before and after judgment, requires information from the defendant about assets subject to the order, so that the injunction can be policed. This can be more important than a freezing order.

The High Court of Chancery before its abolition through the Judicature Acts 1873-1875 exercised a freestanding jurisdiction to order disclosure of documents, in aid of proceedings before another court.  It does not apply to “a mere witness” (EUI Ltd v UK Vodaphone Ltd [2021] EWCA Civ 1771 at [4]), even where the information could be relevant to or even fundamental for resolution of a civil claim. In 1973 the House of Lords found sufficient precedent to justify ordering discovery against Customs and Excise which had been innocently involved (“mixed up”) in the process of the importing of goods infringing a patent, because they controlled the goods albeit they did not have possession of them. The “Norwich Pharmacal” principle has enabled there to be orders compelling production of information from non -parties. That information can be for the purpose of effective redress for a wrong. It is not confined to identifying wrongdoers so that they can be sued. There are limits- it cannot be used against a non party who has had no involvement in wrongdoing (EUI Ltd v UK Vodaphone Ltd [2021] EWCA Civ 1771. There is a discretionary jurisdiction under CPR 31.17 to make disclosure orders against non parties for the purpose of using the information at trial), and it is not a substitute for statutory means of obtaining evidence abroad for use at trial, where the statute imposes a substantially different regime (R. (on the application of Omar) v Secretary of State for Foreign and Commonwealth Affairs [2014] Q.B. 112).

Civil Procedure Rules

The example order is the starting point for drafting freezing injunctions and disclosure orders.  It is a key to the jurisdiction. It affects what relief is in practice granted. What it means is the subject of a series of decisions before and after the Supreme Court decision in JSC BTA Bank v Ablyazov (No.10) ([2015] 1 W.L.R. 4754.). The standard form is similar throughout Australia. Rules governing service and considerations of comity can also constrain the availability of interim relief.  In England there is a proposal before the Rules Committee to have a specific service out of the jurisdiction gateway to enable a non party out of the jurisdiction to be made subject to a disclosure order.

Interim Anti-suit Injunctions

Anti-suit injunctions control where disputes are to be determined. In England for an interim antisuit injunction restraining proceedings in a foreign court based on contract, there has to be a high degree of probability that there is such a contract.  Interim relief may be needed in a foreign court (a) to protect a court having jurisdiction on the merits; (b) to enforce an antisuit injunction granted by another court. The injunction jurisdiction must be exercised with due restraint to avoid trespassing into the jurisdictions properly to be exercised by a foreign court. There are rules governing territorial jurisdiction, and principles governing comity and subject matter jurisdiction. There are cases where the court defends its jurisdiction against exorbitant intrusion by foreign courts or interference with the English court exercising a jurisdiction reserved to it as a matter of public policy, or by statute, for example dealing with the consequences of an insolvent liquidationor entertaining the claim of an employee.  There is the defensive anti-suit jurisdiction enabling the court to assert its jurisdiction notwithstanding an intrusive order of a foreign court, or the threat of it. That jurisdiction is the subject of the judgment of Judge Wilkey in the DC Courts of Appeals in the Laker litigation (Laker Airways Ltd v Sabena BelgianWorld Airlines (1984) 731 F 2d 909 (DC Circuit Court of Appeals), considered in 14-025). This has been considered in the context of enforcement of a foreign judgment in England against English assets in SAS Institute Inc v World Programming Ltd ([2020] EWCA Civ 599).  There is the jurisdiction to award damages, which may be for the costs incurred as a result of the foreign proceedings, or to compensate for the consequences of a foreign judgment. There is also jurisdiction to restrain by injunction pursuit of arbitration proceedings including a foreign arbitration.

Anti suit injunctions and non parties

Third parties such as subrogated insurers may find themselves restrained from bringing proceedings abroad when the rights claimed are subject to an arbitration or jurisdiction clause. This is based on contract. The Supreme Court decision in Enka Insaat Ve Sanayi A.S. v OOO “Insurance Company Chubb”  concerned subrogated insurers bound by an arbitration clause. The law on injunctions includes the rules on conflicts of law. The case concerned identification of the proper law governing an arbitration agreement, and emphatically endorse the anti-suit jurisdiction of the English court in respect of London arbitrations being available before a foreign court decides whether it should entertain a claim. Intervention is justified because of a contract not to sue in that court. 

There is also the anti-suit jurisdiction where there is no “cause of action”.  A claimant abroad may not be a contracting party,  but is not permitted to outflank, and to emasculate, the clause.

In Sea Premium Shipping Ltd v Sea Consortium ([2001] W.L. 1040197 (David Steel J), followed in Hai Jiang 1401 Pte Ltd v Singapore Technologies Marine Ltd [2020] SGHC 20) proceedings were brought abroad by charterers based on a local statute that the new owners of a vessel were bound to respect the terms of a charter-party entered into with the former owners. The new owners were granted anti-suit relief on the ground that the claim was based on the charterparty which contained a London arbitration clause and the charterers could not assert the claim based on the charterparty, without respecting its arbitration clause. It has been followed in a series of cases producing a jurisdiction similar to the principle in the United States of “equitable estoppel”. This can be done even when the claimant is positively asserting that he is not a party to the clause.

Internet Blocking Injunctions

In Cartier International AG v British Sky Broadcasting Ltd ([2017] R.P.C. 3 in the Supreme Court in [2018] 1 W.L.R. 3259; the case is reviewed in S. Gee QC, “The Jurisdiction to Grant Injunctions Against Innocent Third Parties, the Internet and Cartier v British Telecommunications Plc in the Supreme Court” (2018) 40(9) E.I.P.R. 571–578.) the internet enabled persons unknown, to use temporary websites to advertise and sell goods infringing the claimant’s trade mark. Websites would spring up, take orders and change their address. The infringers were not identifiable, could not be named in proceedings, and no effective remedy could be obtained directly against them. Proceedings were brought against British Telecom and other providers of internet services to the public, who were committing no wrong.  An injunction was granted requiring them to use internet blocking equipment, at the expense of the claimant.  There could be a remedy, albeit not perfect, which would constrain the wrongdoers.

In Google Inc. v. Equustek Solutions Inc ([2017] 1 S.C.R. 824.),  the Supreme Court of Canada upheld a worldwide injunction against Google, an innocent third party and not a wrongdoer. The search engines available to the public were being used by the wrongdoer, who had taken trade secrets, as a means to carry on its unlawful business, inflicting damage to that of the claimant, and threatening its destruction. An effective remedy was found. This was by injunction against Google, an innocent non-party, requiring the editing out of the wrongdoer’s web sites from search results produced by its search engines, accessible from different jurisdictions. To have required a separate injunction granted in each jurisdiction from which Google search engines could be viewed was impractical and would have prevented justice being done.  The court in each case enforced the claimant’s rights through injunction against the innocent third party.

The cases about the availability of injunctions against non-parties when there is no “cause of action”, concern the rule of law both domestically and internationally. Individuals can be compelled to produce documents and give evidence in a dispute where their role is no more than as a witness. Jury service can be required. Non-parties can be subject to orders of the court when relief against the wrongdoer would be ineffective, and even when the identity of the wrongdoer is unknown. Courts can call upon and require a non-party bystander to assist in the due administration of justice, because “No man is an island” (Meditation XVII, Devotions upon Emergent Occasions, John Donne.).

FRAND and patent infringement actions based on a standard essential patent

The Supreme Court in Unwired Planet International Ltd v Huawei Technologies Co Ltd ([2020] UKSC 37) required the infringer of a UK standard essential patent to take a worldwide licence on FRAND terms decided upon by the English court, because of the impracticality of requiring the patent holder to sue in multiple jurisdictions. This case and those concerning innocent third parties and the use of the internet, show that considerations of comity must take into account whether requiring multiple suits in different jurisdictions would be impractical, and itself work a denial of justice.

Damages under Lord Cairns’s Act

Lord Cairns’ Act was a procedural reform enabling the old High Court of Chancery to award damages in certain cases rather than requiring them to be assessed by a common law court. Section 50 of the Senior Courts Act 1981 confers a damages jurisdiction to run alongside the jurisdictions to grant an injunction or specific performance. It includes cases where otherwise no damages could be awarded. This jurisdiction has been considered in Morris-Garner v One Step (Support) Ltd ([2019] A.C. 649) by the Supreme Court.

Imaging Orders

Search orders are changing. Advances in computer technology allow data to be imaged, avoiding orders aimed at finding and taking documents. There is the prospect of imaging orders, which are effective for retrieving and preserving data, with less intrusion complexity and expense (TBD (Owen Holland) Ltd v Simons [2020] EWCA Civ 1182), leaving the disclosure exercise to be done subsequently.

Persons unknown

There can be an interim injunction against persons unknown. The possibility of this was not excluded by the English Civil Procedure Rules.  These include injunctions against  paparazzi and demonstrators, and injunctions contra mundum. An order can be made such that an individual become a defendant and immediately in contempt of court on performing a prohibited act.  Service is governed by the provisions in the order which when complied with are sufficient to ground contempt proceedings against the infringer. This is based on the principle that an order is valid and effective unless and until it is set aside, and it is only when it is set aside that it ceases to be effective.  Lack of actual knowledge of the order is considered as mitigation only.

It may be granted in an intellectual property case where the infringer is using the internet and concealing his identity. It can arise where a large sum of money has gone missing for example through hacking, and the perpetrators are unknown.  Hacking technology can leave no trace on the recipient computer.

CMOC v Persons Unknown, ([2017] EWHC 3599 (Comm) (interim relief) and [2019] Lloyd’s Rep. F.C. 62 (trial)) shows how the money can be traced with orders against banks in proceedings against persons unknown. When the perpetrators are identified they can be added to the proceedings, they can be served, and final relief obtained against them.  

Interim Injunctions and s. 44 Arbitration Act 1996

Arbitration depends on support from the courts, in the period prior to arbitration and before the appointment of a tribunal, during an arbitration including for interim relief, and for the period after publication of an award and for its enforcement London is a centre for implementing agreements and providing a neutral forum in international arbitrations. There are the jurisdictions of the arbitral tribunal, and the inter-relationship of these with those of the court. The law on injunctions has a key role in arbitration.

Section 44 Arbitration Act 1996 confers an English statutory jurisdiction to grant interim relief in aid of an English arbitration.  Issues have arisen on the scope of s. 44(2) of the Arbitration Act 1996 and to what extent it allows orders against non-parties to the arbitration. Section 37 (1) provides a separate jurisdiction enabling the granting of an injunction regardless of whether s. 44 applies.  An antisuit injunction can be granted under s. 37(1) based on an arbitration agreement regardless of whether arbitral proceedings have been or are about to be commenced. Such injunctions may be granted against non parties under s. 37 (1) so as to make effective an injunction against a party, or to prevent its purpose being outflanked.

Contribution Claims between tortfeasors

The Court of Common pleas in 1799 in Merryweather v Nixan rejected a contribution claim made between tortfeasors.  Common law jurisdictions have enacted legislation reversing the effect of the decision, prescribing in each state when contribution can be claimed and subject to what limitation period. In the UK this was originally done somewhat unsuccessfully in 1935 and replaced by legislation in 1978.  It is common for several persons to be liability as joint tortfeasors which requires more than an insignificant involvement in the tort.  The minority in Broad Idea at [214] said that it was not “…appropriate to review areas of law that do not arise in this case” and noted that “…in Kazakhstan Kagazy plc v Zhunus [2017] 1 WLR 1360, Longmore LJ held at [25–26] that an injunction could be granted [in contribution proceedings] despite the fact that no cause of action in the strict sense yet existed.”  In that case contribution proceedings had been issued and there was an entitlement to issue them. Under the 1978 Act contribution proceedings can be brought at any time including before time has commenced to run on limitation under UK s.10 Limitation Act 1980.  It is common under different  state laws, for limitation not to commence on a contribution claim  until an event such as a judgment holding the contribution claimant liable for the tort to the person injured, or a settlement agreement and payment to that person. This may not happen until many years have elapsed since the tort was committed.  Those contribution proceedings may be in a court different from that seized with the original tort claim.

 Mareva relief may be needed to preserve assets for enforcement of a judgment ordering contribution, notwithstanding that the claimant to contribution is actively denying liability to the person allegedly injured, a position which if correct would have the consequence that a contribution claim would fail.

The Underlying Principle

All injunctions rest upon a single principle. It is stated in UK s. 37 (1) of the Senior Courts Act 1981 and its statutory predecessors. The principle underpins the worldwide jurisdiction under UK s. 25 (1) of the Civil Jurisdiction and Judgments Act 1982 and s. 2(3) of the Arbitration Act 1996, to act in support of courts, and arbitral tribunals, anywhere in the world. It is within the constraints of comity and the rules governing territorial and subject matter jurisdiction, to do justice. This requires doing justice to everyone, whoever they may be, and wherever they are, without exception.  Courts in different common law jurisdictions may reach the same conclusions based on the persuasive force of precedent and pursuit in those jurisdictions of similar policies.  The Mareva injunction and the development of interim remedies illustrates this.  Life is like riding a bicycle: to keep your balance you must keep moving. There is nothing permanent except change.  

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