High Court has wide discretion as to conditions for continuing freezing injunction

George Bentall

In Brainbox Digital Ltd v Backboard Media GmbH and another [2017] EWHC 2465 (QB), the court considered whether a freezing injunction obtained by the claimant should be continued and, if so, on what conditions.

Facts

Brainbox Digital Ltd (“Brainbox“) brought a claim against Backboard Media GMBH (“Backboard“) and Christian Hansen and obtained a freezing injunction against both defendants. Backboard argued that as Brainbox was no longer a viable business and was being wound down, continuation of the injunction should be subject to the provision of an unlimited undertaking in damages from a third party with means to support one. Brainbox had already provided a cross-undertaking of £125,000 and opposed any such condition.

Continuing the injunction

The court confirmed that a party must show a good arguable case that further fortification is required. That does not involve, however, proof on the balance of probabilities.

It is possible that the court may require an unlimited cross-undertaking as a condition for continuing or granting an injunction.

The judge underlined the court’s wide discretion as to the conditions on which it may grant or continue an injunction. Noting that judicial discretions should not be fettered by rigid rules. The question of the extent of the cross-undertaking remains a matter of discretion for the judge who grants the injunction: see JSC Mezhdunarodniy Promyshlenniy Bank v Pugachev [2015] EWCA Civ 139, [2016] 1 WLR 160, per Lewison LJ at [68]-[69], [73].

The judge concluded the defendants had not shown that there was a good arguable case that there was a sufficient risk that the loss which they would suffer, as a result of the injunction if wrongly granted would exceed £125,000. Therefore, the judge held that requiring Brainbox to provide further fortification would be disproportionate in the circumstances.

Comment

This case serves as a reminder that the court has wide discretion for granting and extending injunctions, and a reminder that the court can order an unlimited cross-undertaking in damages in return for granting a freezing injunction.

Brainbox Digital Ltd v Backboard Media GmbH and another [2017] EWHC 2465 (QB)

Post By George Bentall (2 Posts)

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