Court of Appeal expresses serious doubt as to whether injunctions granted in support of foreign proceedings should be “left in the air” once the highest court has made a determination in those proceedings

Emma Cross

In considering the claimant’s application for leave to appeal the first instance decision in Joint Stock Company Ukrisbbank v Polyakov, Lord Justice Longmore expressed serious doubt as to whether freezing injunctions which are granted in support of foreign proceedings should be “left in the air” once a determination by the highest court is made in the foreign proceedings and emphasised that appeals on the question of good arguable case are not to be encouraged.

As previously reported on this blog, on 17 December 2014, Mr Justice Blair declined to continue a freezing injunction granted under section 25 of the Civil Jurisdiction and Judgments Act 1982 in support of Ukrainian proceedings by the claimant on the basis that the claimant had not shown a good arguable case that it would get judgment against the defendant.

In its application for leave to appeal, the claimant maintained that the case depended on considerations of Ukrainian law and therefore was different from typical freezing injunction cases in which the court has to assess whether there is a good arguable case. The claimant argued that Blair J had applied too high a threshold of good arguable case in his analysis. The claimant’s expert, who had produced a report for the application before Blair J, had not been cross-examined and therefore her assertions of a high chance of success should have been taken at face value.

Lord Justice Longmore refused leave to appeal, commending Blair J’s “very carefully considered decision” and noted that the matters raised by the claimant were all matters which came before Commercial Court judges every day of the week: “judges of the Commercial Court can be expected to recognise a good arguable case when they see one. In any event, the claimant’s assertion that good arguable case means no more than a serious issue to be tried was inconsistent with the Court of Appeal’s approach in Kazakhstan Kagazy Plc and other v Arip [2014] EWCA Civ 381.

In his judgment, Lord Justice Longmore stressed that freezing injunctions are “extremely powerful weapons” and that, in his opinion, freezing injunctions given in support of foreign proceedings should be regarded as having lapsed once the final court has made a determination in those proceedings, even if other parties can continue those proceedings and even if those proceedings might have some ultimate benefit to the defendant.

As this point was not taken before Blair J, and the original order granting the freezing injunction stated that the injunction should continue until further order, Lord Justice Longmore was not able to proceed on that basis. However, it will be interesting to see to what extent these comments are followed by future judges who are required to decide on this matter.

JSC Ukrsibbank (a Company incorporated in Ukraine) v Polyakov [2015] EWCA Civ 67.

The judgment in this case is available to Practical Law subscribers here.

Post By Emma Cross (8 Posts)


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