Discharge of freezing injunction; application discharged when significant piece of information during without notice application was not disclosed
Fundo Soberano De Angola (“FSDA”), the sovereign wealth fund of the Republic of Angola, and seven of its subsidiaries applied for the continuation of a worldwide freezing and proprietary injunction against Jose Filomeno Dos Santos & 20 Ors (the “First 20 Defendants”)
FSDA had obtained an ex parte freezing injunction against the First 20 Defendants, which restrained the First 20 Defendants from disposing of or dealing with assets up to the value of USD 3bn. The underlying claim related to an alleged dishonest conspiracy between the First 20 Defendants, where FSDA entrusted USD 5bn to the First 20 Defendants to manage and invest. FSDA claimed that the First 20 Defendants had invested some of the money in its own projects and had used the rest for its own purposes. FSDA also claimed that they had been charged an unjustifiable amount in fees for the First 20 Defendants’ purported services.
The First 20 Defendants argued that they were victims of a change in political regime in Angola and that FSDA was trying to acquire money that had been properly invested by the previous regime and that, amongst other things, this was a material non-disclosure and warranted the injunction to be discharged.
The Court held that FSDA had not made full and frank disclosure of the material facts on their without notice application. Full and frank disclosure depended on whether the presentation of material in the application had been fair in all respects, taking into account the complexity of the case. FSDA should have made full disclosure as to the political regimes in Angola and the impact of this on its investments, and failure to do this meant that FSDA had breached its duty in asking the court to infer dishonest conspiracy and risk of dissipation on the First 20 Defendants’ part. Additionally, the Court held that the duty to make full and frank disclosure also applied to FSDA’s legal advisers, who were obliged to ensure that lay clients were aware of their duty and what it meant in practice, though there had been no deliberate breach by FSDA’s legal team.
The injunction was discharged.