High Court refuses to register Nigerian freezing injunction as English judgment

Rachel Price

In Standard Chartered Bank v Zungera Power Ltd, the High Court considered an application made by Standard Chartered Bank Limited (“SCB”) to set aside an order whereby a Deputy Master had ordered that a freezing injunction with ancillary disclosure order made by a court in Nigeria should be registered as an English judgment under the Administration of Justice Act 1920 (the “Act”).

The facts

The background facts to the application were as follows:

  1. The order stemmed from a claim which was brought in Nigeria by Zungera Power Limited (“Zungera”) arising from a dispute in relation to a hydroelectric power project.
  2. The claim brought by Zungera in Nigeria was effectively that it had not been paid the amounts it asserted were due for its work in connection with the hydroelectric power project.
  3. In the Nigerian action, Zungera asserted that an extremely large sum of money remained outstanding to it from various defendants (in excess of $272m).
  4. Zungera applied to the High Court in Nigeria for a Mareva injunction/freezing order, with an ancillary order regarding asset disclosure, which order was duly granted (the “Nigerian Order”).
  5. The intended effect of the Nigerian Order was to freeze all assets worldwide of a number of the defendants and to freeze assets up to the extent of the $272m said to be owed to Zungera.
  6. An ex parte application was made by Zungera in the English High Court before a Deputy Master for the Nigerian Order to be registered as an English judgment under the Act.
  7. The Deputy Master granted Zungera’s application and the order was duly registered as a judgment of England and Wales (the “Registration Order”).
  8. SCB applied to have the Registration Order set aside or, alternatively, for the High Court to make a declaration that SCB was not bound to observe the terms of the Nigerian Order.

The court’s decision

The High Court allowed SCB’s application to set aside the Registration Order on the basis that:

  • Zungera’s application for the Registration Order had been made under the Act. However, for a judgment to qualify for registration under the Act, section 12 of the Act makes “absolutely plain” that it must be a money judgment. Reddihough J concluded: “in my judgment the nature of the Nigerian orders, the Mareva freezing order and the ancillary order, cannot possibly be described as a judgment whereby any sum of money is made payable“.  As a result, the judge was satisfied that the Deputy Master had made the Registration Order when he did not have the power under the Act to do so.
  • Furthermore, the ancillary disclosure order appeared to be directed to any person on whom the Nigerian Order was served, including SCB. However, the order could not be registered as a result of section 9(2)(b) of the Act, which states: No judgment shall be ordered to be registered under this section if the judgment debtor, being a person who was neither carrying on business nor ordinarily resident within the jurisdiction of the original court, did not voluntarily appear or otherwise submit or agree to submit to the jurisdiction of that court“.  Not only was SVB not a “judgment debtor”, the court was satisfied by SVB’s evidence that it was neither carrying on business nor ordinarily resident in Nigeria, was entirely unaware of the proceedings in Nigeria, was not given notice of the Nigerian Order and had in no way agreed to submit to the jurisdiction of the Nigerian court. In respect of the ancillary disclosure order, the judge was consequently also satisfied that the Deputy Master had made the Registration Order when he did not have jurisdiction under the Act to do so.

Commentary

The judgment should provide comfort to parties to foreign proceedings which give rise to the grant of injunctive relief that the underlying orders should not be registered as English judgments under the Act, not being concerned with judgments for sums of money. The sensible approach of Reddihough J should act as reassurance that freezing injunctions made by foreign courts will not be registrable in England and Wales on an ex parte basis.

Standard Chartered Bank v Zungera Power Ltd [2014] EWHC 4714 (QB)

The judgment in this case is available to Westlaw subscribers.

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