5.2.1 An Overview of the Current Framework

In this category of cases, it is usually straightforward for a claimant to satisfy the jurisdictional preconditions. When does jurisdiction exist to grant the injunction? According to the traditional view, a freezing injunction operates in personam and hence it is necessary to establish personal jurisdiction over the defendant. Section 37(3) of the Senior Courts Act 1981 provides that the power to grant freezing injunctions under section 37(1) of the 1981 Act ‘shall be exercisable in cases where that party is, as well as in cases where he is not, domiciled, resident or present within that jurisdiction’. Jurisdiction to determine the merits of the substantive claim also provides personal jurisdiction over the defendant to grant the injunction.Footnote ¹ If the English court has jurisdiction over the defendant in relation to the substantive claim, there is no need for a claimant to identify a separate ground of jurisdiction for the purposes of the application for a freezing injunction. What about jurisdiction over the assets? CPR rule 25.1(1)(f)(ii) makes it clear that English courts have jurisdiction to grant a worldwide freezing injunction in support of English proceedings.Footnote ²

In what circumstances would the English court exercise its jurisdiction to grant the injunction? One of the most important factors at this discretionary stage seems to be the ability of the court to enforce the order.Footnote ³ Where the English court has no means to enforce the order, it is highly likely that the injunction would be refused. When considering whether to grant an injunction extending to the defendant’s assets located abroad, the court will also take into account whether there are sufficient assets in England to satisfy the claim.Footnote ⁴ There is usually no mention of the principle of comity in cases involving English substantive proceedings.Footnote ⁵ This may be due to the courts’ implicit view that the fact that the substantive proceedings are in England provides the English court with ‘sufficient interest or connection’ with the claim for interim relief and consequently there is no possibility of infringement of comity.Footnote ⁶ Such an inference depends on one particular interpretation or theory of comity. For the avoidance of doubt, it should also be noted that at the discretionary stage there is no need to consider whether it would be ‘inexpedient’ to grant a freezing injunction.Footnote ⁷ Furthermore, even if assets located abroad are involved, there appears to be no requirement for the court to apply the principle of forum non conveniens in the sense that there is no need to consider whether a foreign court would be a more appropriate forum to determine the merits of an application for a freezing injunction or equivalent relief.Footnote ⁸

5.2.2 Application of Jurisdictional Theories

The current preconditions relating to the existence of jurisdiction do not sufficiently differentiate between purely domestic cases and international cases involving assets located abroad or a foreign party. In both domestic and international cases, jurisdiction to grant a freezing injunction exists if the court has personal jurisdiction over the defendant for the purposes of the substantive claim. Personal jurisdiction is based on a power theory and is established if the defendant can be lawfully served either within or outside the jurisdiction. If the order is sought in support of English substantive proceedings, the requirement of personal jurisdiction will be made out. In the context of anti-suit injunctions, Lawrence Collins LJ (as he then was) made it clear that ‘[w]here a party is properly before a court, an anti-suit injunction is not a separate claim requiring its own basis of jurisdiction’.Footnote ⁹ The same applies to freezing injunctions. Thus, under the current approach, the English courts are only concerned with the narrow question of whether the defendant can be summoned before the English court (personal jurisdiction). The courts are not concerned with the question of whether the English court has jurisdiction over the assets in respect of which the injunction is sought (jurisdiction in rem). It is my position that both personal jurisdiction over the defendant and jurisdiction in rem should be required for the injunction to be within the scope of the state’s right under international law to regulate the defendant’s conduct using its domestic law on freezing injunctions. Jurisdiction over the assets (jurisdiction in rem) is necessary in order to enable the English courts to avoid encroachment upon the sovereignty of foreign states and protect defendants from the possibility of having to defend against multiple applications for asset preservation relief.

Let us illustrate the features of the current English approach with one of the key cases involving English substantive proceedings. Derby v. Weldon (Nos. 3 and 4)Footnote ¹⁰ was a pre-judgment case in a long-running litigation saga concerning allegations of fraud in connection with dealings in the cocoa market. One of the issues in the Court of Appeal was whether a pre-judgment worldwide freezing injunction should be granted against foreign defendants who had no assets within the jurisdiction. The leading judgment was given by Lord Donaldson MR. His Lordship rejected the argument that the existence of assets within the jurisdiction was a precondition for obtaining worldwide relief and observed that: ‘The existence of sufficient assets within the jurisdiction is an excellent reason for confining the jurisdiction to such assets, but, other consideration apart, the fewer the assets within the jurisdiction the greater the necessity for taking protective measures in relation to those outside it.’Footnote ¹¹ Putting aside the proviso for the protection of innocent third parties, the Court of Appeal was not concerned about the absence of significant connections between the defendants’ assets located abroad and the English court. As the defendant companies were validly served out, the court had personal jurisdiction over the defendants. The Court of Appeal did not consider the strength of connections with other countries. It was irrelevant whether another court had jurisdiction to regulate the defendants’ conduct in relation to their assets located abroad. This illustrates the application of a unilateral approach to the question of whether there is jurisdiction to grant a freezing injunction. In my view, the English courts need to recognise that personal jurisdiction over the defendant does not automatically give rise to jurisdiction to grant a freezing injunction. Jurisdiction of the English court to hear the merits of the substantive claim against a defendant should be regarded as a separate question from jurisdiction to grant a freezing injunction. This is a necessary step to restrict the scope of freezing injunctions to assets located in England. Such a restriction would reduce the possibility of conflict of procedural laws.Footnote ¹² This would in turn have the effect of reducing the ability of unscrupulous claimants to take advantage of the current regime through abusive forum shopping. For example, it would reduce the potential for relitigating legal issues relating to the substantive preconditions for a freezing injunction (or equivalent relief) in respect of the same assets. Eliminating such abusive forum shopping is an aim consistent with equipage equality, one of the key functions of freezing orders. The more room for abusive forum shopping, the further we are away from achieving a level playing field between claimants and defendants. In light of its link with equipage equality, the creation of a separate jurisdictional basis for asset preservation relief would provide due recognition to the important role of injunctive relief in commercial litigation.

In Derby v. Weldon (Nos. 3 and 4), the third defendant was a Panamanian company which had no assets in Panama. At first instance, Sir Nicholas Browne-Wilkinson V-C refused to grant any order against the third defendant because there was no evidence that a freezing injunction could be enforced in Panama, even if it had any assets there. The Court of Appeal disagreed with his conclusion. Lord Donaldson MR considered that the fact that the court could bar the defendant’s right to defend provides a sufficient sanction.Footnote ¹³ Moreover, Panama was not the only forum in which the claimants would seek to enforce a future judgment against the third defendant. For these reasons, he said that it was a mistake to spend time considering whether English orders and judgments could be enforced against Panamanian companies in Panama.Footnote ¹⁴ Lord Donaldson MR’s refusal to take into consideration the regulatory regime of a legal system with a clear connection to the case underlines the unilateral nature of the English jurisdictional preconditions for freezing injunctions.

Several related characteristics of the current approach should be emphasised with reference to jurisdictional theories. First, the English courts adopt a unilateral, vertical and domestic approach to the existence of jurisdiction to grant a freezing injunction in support of English substantive proceedings. The focus is only on the relationship between the English court and the defendant. It is irrelevant whether another foreign court also has jurisdiction to grant a freezing injunction or similar relief. No comparison is made with the connections that other countries have with the dispute over the availability of interim relief. Second, there is no distinction between jurisdiction to decide on the substance of the dispute and jurisdiction to determine whether or not injunctive relief should be granted. This is based on the incorrect assumption that the same connections are always relevant for two different claims. The very existence and need for jurisdiction to grant freezing injunctions in support of foreign substantive proceedings shows that the relevant jurisdictional connections for the substantive claim and the claim for preliminary relief can be mutually exclusive.

The consequence of the automatic existence of jurisdiction to grant worldwide freezing injunctions in cases where the substantive proceedings are in England is the possibility of granting ex parte injunctions despite a weak connection with the application for preliminary relief. Moreover, at the time of the hearing for injunctive relief, the issue of jurisdiction over the defendant for the purposes of the substantive claim in England may be very far from its final resolution. This is demonstrated by VTB Capital v. Nutritek,Footnote ¹⁵ where Roth J (at first instance) granted an ex parte worldwide freezing injunction against Mr Malofeev (the fourth defendant) even though service of the claim form had not yet been effected in Russia.Footnote ¹⁶ Given the possibility of obtaining a worldwide freezing injunction despite a weak or no connection with England, the current state of the law is unsatisfactory because the claimant can undermine the defendant’s legitimate expectations regarding the applicable regulatory scheme for preserving assets. It is submitted that in cases involving English substantive proceedings, as a general rule, the English court should not have jurisdiction to grant a freezing injunction in respect of assets located abroad. For the English court to have jurisdiction to grant a freezing injunction, it should be necessary to establish both personal jurisdiction and jurisdiction over the assets.

5.2.3 The Quasi-Proprietary Nature of Freezing Injunctions

It was inconsistent with the international systemic perspective on the purpose of private international law rules for the English courts to extend the international scope of freezing injunctions to assets located abroad. The courts should recognise that freezing injunctions always indirectly regulate the rights and obligations arising from the property or contract covered by the order. The dispute between the claimant and the defendant over whether the defendant’s conduct justifies a freezing order is effectively a dispute about whether the defendant should be temporarily deprived of the benefits under the law that governs the property or contract in question. A defendant against whom the injunction has been granted is deprived of the two essential features of property rights: the ability to freely transfer the asset and to exclude third parties from interfering with the asset.Footnote ¹⁷ For these reasons, a freezing injunction could be classified as a quasi-proprietary form of relief which involves an indirect interference with contractual or property rights. It is true that armed with a freezing injunction, a claimant does not have a proprietary right to the defendant’s assets.Footnote ¹⁸ However, as Tomlinson LJ explained, ‘in many cases … a freezing order has the practical if not theoretical effect of giving security to the claimant for its claim’.Footnote ¹⁹

In order to provide further justification for this proposed classification, it is useful to emphasise the ability of claimants to combine a freezing injunction with other orders to facilitate future enforcement against the assets covered by the freezing injunction. Such other orders include receivership orders and orders to transfer assets from one jurisdiction to another. In Derby v. Weldon (No. 6),Footnote ²⁰ it was held that the English courts even have power to order the defendant to transfer their assets from one jurisdiction to another. The Court of Appeal’s reasoning was that the in personam jurisdiction of the English court is ‘unlimited’. Dillon LJ stated that the jurisdiction extended to

If the defendant company is merely subject to English court’s personal jurisdiction, this ought to be treated as insufficient connection as a matter of international law to enable the court to order the defendant to take positive steps in another jurisdiction in relation to a bank account not governed by English law. The decision in Derby v. Weldon (No. 6) provides a clear example of an order directly and actively interfering with the defendant’s rights under a contract governed by foreign law. Writing extra-judicially, Browne-Wilkinson has explained that ‘the fiction that [a freezing injunction] only operates in personam becomes very thin indeed when the English court appoints a Receiver. Such an order does not operate only in personam: under English law the Receiver is entitled to take possession of the assets’.Footnote ²² The appointment of a receiver was made in Derby v. Weldon (Nos. 3 and 4), which we have considered. Agreeing with and reinforcing the views of Browne-Wilkinson, Wilson points out that:

The distinction between in personam and in rem becomes even less significant when we consider the claimant-friendly attitude of the English courts towards enforcement of worldwide freezing orders in certain jurisdictions. For a claimant to enforce a worldwide freezing order in another jurisdiction, it is necessary to first obtain permission from the English court. When considering whether to give such permission and how to exercise its discretion, the court will apply the guidelines developed in Dadourian Group International Inc. v. Simms,Footnote ²⁴ known simply as the ‘Dadourian guidelines’. The guidelines, inter alia, specifically ask the court to take into account the nature of the relief sought from the foreign court and in particular whether that relief would be ‘superior’ to the existing relief obtained from the English court. Taken at its face value, it appears from this guideline that the in personam nature of English freezing orders should not be converted into a superior form of local relief with proprietary consequences. However, the practical reality is that an English court may well take a pro-claimant stance on this issue. This is evident from the decision of Males J (as he then was) in Arcadia Energy (Suisse) SA et al. v. Attock Oil International Ltd et al.Footnote ²⁵ The defendants (including former company officers) argued that the claimants (petroleum companies) should be refused permission to enforce the worldwide freezing order in Switzerland and Lebanon. One of the defendants’ submissions was that the remedies sought from the Swiss and Lebanese courts were in rem and therefore superior to the English order. Males J acknowledged that the relief sought from the Swiss courts operated in rem but nevertheless rejected the defendant’s argument, observing that it was common practice to grant permission for enforcement in such circumstances. His Lordship noted that the superior form of foreign relief was not an absolute bar to permission. As an example of circumstances in which permission might be refused on grounds of superiority, it was observed that the foreign order should not prevent the use of funds in accordance with the provisos in the English order (such as the ability to use the funds for the purposes of legal costs and living expenses). Although the liberal approach of the court in Arcadia Energy may have been influenced by the seriousness of the allegations of widespread fraud against the defendants, it cannot be denied that the common practice in the Commercial Court of granting permission in circumstances where the foreign order operates in rem dilutes the importance of the distinction between in personam and in rem.Footnote ²⁶

5.2.4 A Summary of the Problems with the Jurisdictional Preconditions for Freezing Injunctions in Support of English Proceedings

In light of the analysis in the previous chapter, the current English approach to the existence of jurisdiction to grant a freezing injunction in support of English substantive proceedings is theoretically flawed; it ignores the international systemic view of private international law rules. The current approach fails to fulfil all of the functions of jurisdictional rules. To borrow the language of Michaels, the existence of jurisdiction to grant a freezing injunction should be justified vis-à-vis other states with a plausible claim to jurisdiction rather than vis-à-vis the defendant and their interest in protection from the court.Footnote ²⁷ As we have seen, one of the key flaws with the current approach is the lack of a distinction between jurisdiction over the substantive dispute and jurisdiction to grant a freezing injunction. In the next section we will examine similar problems with the current jurisdictional preconditions for another category of cases: freezing injunctions in support of foreign substantive proceedings.

5.3.1 Overview of the Current Approach

Section 25(1) of the Civil Jurisdiction and Judgments Act 1982 allows the courts to grant freezing orders in support of foreign substantive proceedings. Section 25 of the 1982 Act is silent about the territorial scope of a freezing injunction in support of foreign proceedings. However, the Court of Appeal has made it clear that it is possible for a claimant to obtain a worldwide freezing injunction from an English court in support of foreign substantive proceedings.Footnote ²⁹ In what circumstances would the court exercise its discretion to grant a freezing injunction collateral to foreign substantive proceedings? The short answer is that, applying section 25(2) of the 1982 Act, the court needs to be satisfied that it is not ‘inexpedient’ to grant a freezing injunction. There are several important decisions of the Court of Appeal on the application of the test of expediency.Footnote ³⁰ It appears that an English court would exercise its discretion to grant a collateral freezing injunction even where there is minimal or no connection to the forum.Footnote ³¹ In cases where there is minimal or no connection to the forum, the claimant needs to show some ‘exceptional circumstances’, fraud probably being the best example.Footnote ³² Ordinarily, there is no discussion of the principle of forum non conveniens – in the sense that the court does not expressly consider whether England is the most appropriate forum for the claim or application for a freezing injunction. There are several sets of non-exhaustive ‘guidance’ on the factors that the courts may take into account when making a decision whether to exercise their jurisdiction to grant a collateral freezing injunction. The Court of Appeal in Motorola v. Uzan (No. 2) identified five considerations that may be relevant to the test of expediency at the discretionary stage:

It is not clear how the courts should balance these factors identified in Motorola (No. 2) and whether this is consistent with the other case law on collateral freezing injunctions, including the more recent ‘summary’ of the circumstances in which a court may (or may not) grant a collateral freezing injunction by Popplewell J (as he then was) in ICICI Bank UK v. Diminco NV. The broad structure of the current approach for applications under section 25 is a two-step analysis.Footnote ³⁴ The first question for the court is whether a freezing injunction would be granted if the substantive proceedings were in England. If the answer is in the affirmative, the second step for the court is to decide whether it is ‘inexpedient’ to grant the freezing order. This second step is encapsulated in section 25(2) of the 1982 Act, which provides that:

5.3.2 Application of Jurisdictional Theories

Under the current approach, the reasoning of the courts in some important decisions in this field appears to treat the existence of jurisdiction as a requirement that is automatically satisfied as a result of the very existence of section 25 of the 1982 Act.Footnote ³⁵ The language of section 25(2) itself seems to support this view as the courts are asked to consider ‘the fact that the court has no jurisdiction apart from this section’.Footnote ³⁶ In the aforementioned cases, the courts have proceeded on the assumption that jurisdiction always exists to grant a freezing injunction in support of foreign proceedings. The assumption about the existence of jurisdiction is being adopted even in the circumstances where the defendant has no presence in England because, in the view of the courts, it is always possible to serve the defendant out of the jurisdiction on the basis that an injunction is sought under section 25.Footnote ³⁷ The Court of Appeal has expressly confirmed that ‘in relation to the grant of worldwide relief, the jurisdiction is based on assumed personal jurisdiction’.Footnote ³⁸ It is submitted that, taking into account the need to ensure equipage equality at the international level, the assumption that jurisdiction always exists to grant a freezing order collateral to foreign proceedings would only be logical and legitimate if restricted to assets located in England.

With the exception of some obiter statements in only one case,Footnote ³⁹ the courts have not directly considered the question of whether England is a clearly more appropriate forum to determine the availability of asset preservation relief. In other words, in cases where the claimant has relied on paragraph 3.1(5) of Practice Direction 6B to serve the defendant out of the jurisdiction, the courts have accepted the existence of jurisdiction and avoided the application of the principle of forum non conveniens. On the other hand, it could be argued that the courts have perhaps indirectly addressed the question of whether England is a clearly more appropriate forum through their application of the test of expediency. On this view, any factors that would be relevant for the purposes of a forum non conveniens enquiry are subsumed into the list of five factors identified by the Court of Appeal in Motorola v. Uzan (No. 2) as being relevant for the purposes of the criterion of expediency. Alternatively, or perhaps additionally, whether the English court is a clearly more appropriate forum is an issue which the courts already consider through their application of the principle of comity. There is insufficient evidence to support the last proposition but, even if it is true, it is far from a satisfactory state of affairs because the issue of existence of jurisdiction deserves more attention than the issue of how the English courts should exercise their discretion. Ameliorating the problem of encroachment upon the regulatory authority of other states and excessively claimant-friendly criteria through the discretionary stage (including the principle of forum non conveniens) is an incomplete solution. Unless there is a well-designed, tailor-made rule dealing with the existence of jurisdiction to grant freezing orders in support of foreign proceedings which carefully balances the interests of all stakeholders, the risk of encroachment on the regulatory authority of foreign states and the risk of unfairness to defendants will remain significant. As we have learnt from the analysis of jurisdictional theories in the previous chapter, the various interests that need to be balanced include not only the competing interests of the parties, but also the interests of the connected foreign states. It is inconsistent with the international purpose of the rules of jurisdiction to allow the English courts to make assumptions about the sensitive question of existence of jurisdiction and it is unacceptable to simply apply the forum’s rules (including section 25 of the 1982 Act) whenever it is in the interests of ‘efficiency’ or ‘expediency’ from the English perspective (for example because of the practical inconvenience and costs for the claimant of having to apply for similar orders in numerous other countries). It is equally unacceptable to automatically apply section 25 of the 1982 Act to all cases and justify it by reference to the equitable roots of freezing injunctions (or the characterisation of the rules relating to freezing injunctions as procedural) – that amounts to putting the cart before the horse as it circumvents the proper order of legal issues required under the rules of private international law. Before we apply section 25, it is necessary to check whether it is for an English court or a foreign court to determine whether a freezing injunction (or equivalent relief) is available.

Given the lack of importance attached to the question of existence of jurisdiction, the fact that the only question for the courts is one of expediency clearly demonstrates a unilateral approach to the existence of jurisdiction to grant a worldwide freezing order in support of foreign proceedings. A further aspect of the unilateral approach is that a practice appears to have developed in the Commercial Court whereby the potential conflict with the outcome of an application for similar relief in another jurisdiction is dealt with upon a subsequent application to vary the terms of the order.Footnote ⁴⁰ The courts therefore seem to initially ignore the application in the foreign court and leave it to the parties to deal with any inconsistency with a foreign order once it arises.Footnote ⁴¹ A unilateral approach tends to give disproportionate weight to the forum’s policies and ignores the internationalist and systemic goals of private international law and its public international law roots. A unilateral approach could even be seen as based on the assumption about the superiority of the forum’s regulatory framework or, perhaps from a somewhat cynical perspective, driven by the desire to increase the attractiveness of the forum as a venue for international commercial litigation for the benefit of the economy (and, in particular, its legal services sector). In my view, the likelihood of the English courts making assumptions about the superiority of injunctive relief is perhaps increased in the field of equitable remedies because of the judiciary’s naturally and historically strong attachment to notions of justice, fairness and unconscionability which form the foundations for such remedies.Footnote ⁴²

5.3.3 The Risk of Wrongfully Granted Injunctions

This section will demonstrate that the current jurisdictional preconditions undermine equipage equality due to the lack of a separate jurisdictional basis for freezing injunctions. The failure of the English courts to distinguish between jurisdiction to hear the substantive claim and jurisdiction to grant a freezing injunction leads to an increased risk of wrongfully granted injunctions. Several cases will be used to illustrate this problem. All of the above judgments on freezing injunctions in support of foreign proceedings, including those where the relief was ultimately refused, were the end product of applications by defendants to discharge pre-judgment injunctions which had been granted ex parte. For example, in Refco, the injunction was granted ex parte on 19 December 1997. Despite his finding that the English court should not express its view on the merits of the application for interim relief, on 4 March 1988 Rix J maintained the injunction on a holding basis to allow the claimants to submit the question to the Illinois court. Then, on 3 June 1998, at which stage it was clear that the application to the Illinois court would be bound to fail, Rix J continued the injunctive relief pending the determination by the Court of Appeal of the application for leave to appeal. It was not until 17 June 1998 (more than six months since the ex parte order had been granted) that it finally became clear that the English court had no power to grant the order. The benefit of placing applications for freezing orders on a separate jurisdictional basis and establishing exclusive jurisdiction to grant such orders would be twofold. First, it would reduce the incentive for claimants to make tactically motivated, unmeritorious ex parte applications. Second, it would reduce the unfairness to defendants caused by wrongfully granted injunctions in situations where the court grants the ex parte order but it later emerges that there was no personal jurisdiction over the defendant. Let us take a look at some examples from high-profile commercial cases where different findings on jurisdiction have affected the freezing injunction and thereby caused unfairness to defendants. In VTB Capital v. Nutritek,Footnote ⁹² the worldwide freezing order which had been granted ex parte was maintained by the Commercial Court despite its ruling that there was no jurisdiction over the defendant. Uncertainty over whether the English court should exercise its jurisdiction had to be resolved by the Supreme Court. It was not until the Supreme Court’s ruling that the injunction was discharged. In the Supreme Court, Lord Neuberger observed:

But is there really a straightforward route to complain about the oppressive restraint on the defendant’s economic activities? I submit that the answer is negative due to the possibility of complicated, lengthy and costly litigation about recoverable losses under the cross-undertaking in damages.Footnote ⁹⁴

Alliance Bank JSC v. Aquanta Corporation et al.,Footnote ⁹⁵ a case involving allegations of fraud against the former directors of a Kazakh bank, could be seen as another example of an unmeritorious ex parte application for a worldwide freezing injunction. In the usual, almost automatic manner, the Commercial Court, on the ex parte application, had granted both the worldwide freezing order and permission to serve the claim form out of the jurisdiction on the defendants.Footnote ⁹⁶ In the Court of Appeal, more than one year after the ex parte application, Tomlinson LJ explained that:

It is clear from this paragraph alone that the worldwide freezing order had been wrongfully granted by the Commercial Court. As counsel for one of the defendants suggested, the claimant bank’s principal reason for the English proceedings was to obtain the worldwide freezing order.Footnote ⁹⁸ Similar relief was not available from the Kazakh court.Footnote ⁹⁹ If my bold proposal were to be adopted, the risk of wrongfully granted freezing injunctions would be reduced: on the ex parte application, the Commercial Court would consider the question of jurisdiction to grant the injunction in a straightforward manner. This would involve one primary question: are there any assets located in England? Section 25 of the 1982 Act should not be applicable at all to applications in respect of assets located abroad. In the majority of cases, even on a typical Friday afternoon in the Commercial Court, this would be a simple exercise with a low risk of a different finding on jurisdiction at the inter parte stage or on appeal.

My argument that we need to distinguish between compliance with the substantive preconditions on the one hand and the jurisdictional preconditions for a freezing injunction on the other is supported by some parts of Flaux J’s judgment in Belletti v. Morici.Footnote ¹⁰⁰ In that case, a worldwide freezing order was sought against the parents of the first defendant because of their alleged assistance in hiding the first defendant’s assets. The order had been granted ex parte by Andrew Smith J but was set aside by Flaux J (as he then was), whose conclusion was that it was inexpedient to grant the order. There was no evidence of any connection between the parents and England. The parents were domiciled in Italy and no assets under their control were situated in England. With respect, it is difficult to see how Andrew Smith J found the jurisdictional basis for granting the order and this underlines my argument that we need clear-cut rules to protect defendants from claimant-friendly and knee-jerk decisions at the ex parte stage. Clear-cut rules on the lines proposed in the next chapter would also reduce unnecessary costs for both parties and reduce the volume of applications reaching the appellate courts. A key element of a clear framework for freezing orders is to eradicate the tendency to mix up the substantive preconditions and the English court’s jurisdiction to grant the order. As Flaux J explained:

5.3.4 Cases Involving No Connection with England: ‘Rare’ or ‘Exceptional Circumstances’

The last sentence of the above passage from Belletti leads to the following question: precisely what sort of rare circumstances did Flaux J have in mind? When exactly would it be appropriate (from the viewpoint of the English courts) to grant a freezing injunction against a defendant who has no connection with England and whose assets are located abroad? This particular issue was elaborated to a limited extent in ICICI Bank UK v. Diminco NV,Footnote ¹⁰² a case where an English bank sought a worldwide freezing order and an ancillary worldwide disclosure order in support of Belgian proceedings. The former was granted inter partes by Eder J but Popplewell J (as he then was) set aside the order despite the existence of four bank accounts in London belonging to the defendant (a diamond distributor) which used to contain substantial funds. As the defendant was not subject to the in personam jurisdiction of the English court and the court was not in a position to enforce an order for disclosure, it was inexpedient to grant both the worldwide freezing order and the ancillary worldwide disclosure order. The claimant put forward an argument that a disclosure order is ‘less intrusive and less draconian than a freezing order’Footnote ¹⁰³ but Popplewell J rejected it on the basis of its ancillary nature and the lack of a greater connecting link in comparison to freezing assets located in England. It is notable that in Diminco, Popplewell J’s summary of the principles applicable to applications under section 25 of the 1982 Act confirms that there are ‘exceptional circumstances’ in which the English courts are prepared to grant a freezing order extending to assets located abroad even though the defendant is not subject to their in personam jurisdiction.Footnote ¹⁰⁴ Popplewell J identified at least three requirements that the claimant would need to establish for an order to be granted in such exceptional circumstances. The first requirement is the real connecting link criterion. This criterion has its origins in the case law of the Court of Justice of the European Union in relation to the preconditions for using Article 35 of the Brussels I Recast Regulation as a gateway to national law rules on interim relief.Footnote ¹⁰⁵ Second, ‘the case is one where it is appropriate within the limits of comity for the English court to act as an international policeman in relation to assets abroad; and that will not be appropriate unless it is practical for an order to be made and unless the order can be enforced in practice if it is disobeyed’. Third, the five discretionary factors identified by Potter LJ in Motorola (No. 2) would need to be satisfied. With respect, my view is that such an explanation of the principles leaves questions unanswered. For example, what are the ‘limits of comity’ within which the English court can act as an international policeman? To what extent is there an overlap between the second and third requirements? With regard to his first requirement, is Popplewell J suggesting that the Van Uden test is applicable even outside the scope of the relevant European framework? If so, when and how would the Van Uden test be satisfied in respect of assets located abroad in a situation where the defendant is not subject to the in personam jurisdiction of the English courts? It is unlikely, given his reliance on Banco Nacional v. Empresa in the same paragraph of the judgment, that Popplewell J was suggesting that the presence of assets in England would constitute ‘a real connecting link’ with any assets located abroad and enable the court to extend the injunction to assets located abroad.Footnote ¹⁰⁶ Given the express acknowledgement of the court of the need for ‘exceptional circumstances’ where an order is granted in respect of assets located abroad against a defendant who is not subject to its in personam jurisdiction, it is to some extent surprising that clearer ‘rules’ (or guidelines) have not been laid down about what amounts to ‘exceptional circumstances’.

The exceptional circumstances requirement is even more confusing when one looks back at the judgment of the Commercial Court in Royal Bank of Scotland v. FAL Oil. The English court did not have jurisdiction over the substantive claim and there were no assets within the territorial jurisdiction of the English court.Footnote ¹⁰⁷ Nevertheless, a worldwide freezing order was continued. Applying Popplewell J’s principles set out in Diminco, the only possible category for FAL Oil is that it represents a case where there were exceptional circumstances. However, it is difficult to see what exactly was exceptional in FAL Oil, and the circumstances were not described as being exceptional by the court. Walker J in Mobil Cerro Negro appeared to suggest that allegations of fraud may constitute ‘exceptional circumstances’ and justify a worldwide freezing order despite the absence of any significant connection to England.Footnote ¹⁰⁸ In ArcelorMittal USA LLC v. Essar Steel Ltd, Jacobs J recently provided a more detailed explanation of the meaning and relevance of international fraud and exceptional circumstances:

The problem is that in FAL Oil there were no allegations of fraud or ‘serious wrongdoing’. Given the similarities with the facts of Mobil Cerro Negro, the injunction should have been discharged due to the lack of sufficient connection with the forum. The court primarily placed reliance on what could be described as ‘legal connections’ between the defendants and the forum and in particular the English governing law and exclusive jurisdiction clauses in the loan agreements.Footnote ¹¹⁰ These legal connections would have been directly relevant to establishing jurisdiction in respect of the substantive claim but that was not the legal issue before the court. The actual question was whether the court had jurisdiction to grant a worldwide freezing injunction. The connections relied upon were peripheral to the subject matter of the freezing injunction (the defendants’ assets). The conclusion should have been that the court had no jurisdiction over the defendant’s assets located abroad. There was no attempt to draw upon the reasoning in The Mahakam even though the same judge had delivered the judgment in that case. This reinforces the argument that the exercise of discretion in FAL Oil could not be regarded as a principled exercise of discretion and that the judgment contributes to the uncertainty surrounding the discretionary stage. The decision may have been influenced by the fact that it was not possible for the claimants to obtain a worldwide disclosure order from the UAE courts.

It should be noted that the summary of the principles in Diminco partially lends support to my emphasis on the importance of assets covered by the freezing order; Popplewell J made it clear that, irrespective of whether the court has in personam jurisdiction over the defendant, the English court would be the ‘appropriate’ court to grant ‘a domestic freezing order’ where there is reason to believe that the defendant has assets in England.Footnote ¹¹¹ This is consistent with my argument that equipage equality at the international level would be impossible to achieve unless freezing injunctions are available in such circumstances.Footnote ¹¹²

5.3.5 Evidence of a More Restrictive Approach

In our overview of the case law on worldwide freezing injunctions in support of English proceedings, there was limited evidence of a more restrictive approach to the international scope of the relief. Are there any similar signs of a more restrictive approach in the context of injunctions in support of foreign proceedings? Once again there are very limited examples of such cases. The reasoning in Credit Suisse was relied upon in Yossifoff v. DonnersteinFootnote ¹¹³ to reach the conclusion that a proprietary freezing injunction should not be granted by the English court because it was not best able to make its orders effective: on the facts, the actions sought to be restrained concerned ‘a person resident in Israel in relation to shares located in Israel’.Footnote ¹¹⁴ The court added that a decision whether or not to restrain such actions would require a detailed understanding of the proposed refinancing of the shares in question – something that the Israeli court was best placed to deal with.

A further example of a cautious approach and a judgment which recognises the need to separate the question of existence of jurisdiction from the question of enforceability of the injunction is that of Walker J in Mobil Cerro Negro v. PDV.Footnote ¹¹⁵ As Walker J explained:

While Walker J made several references to ‘considerations of comity’, it appears that he did not provide a clear explanation of their content and how such considerations have an effect on the court’s exercise of discretion. The explanation could lie in his emphasis on the requirement of a ‘sufficiently strong link’ with England in the absence of exceptional circumstances such as fraud. A possible interpretation is therefore that he equated comity with the requirement of sufficient connection. Walker J expressly pointed out that the court cannot proceed on the assumption that ‘presence of the respondent here will necessarily be sufficient to warrant the exercise of discretion in favour of an applicant – although … it may weigh in favour of granting relief’.Footnote ¹¹⁷ The cautious approach of Walker J should be applauded and his careful separation of jurisdictional and enforcement issues should help to prevent the potential to rely on the injunction’s enforceability in England to obtain an unprincipled extension of the territorial scope of English freezing injunctions. The outcome in Mobil is undoubtedly correct. Nevertheless, the reasoning is still inconsistent with some of the arguments advanced by me. The most significant question – whether the English rules on freezing injunctions were applicable at all – should not be left to the discretionary stage.Footnote ¹¹⁸ If the English court had first addressed the question of its regulatory authority in relation to assets located abroad, it would not have been necessary to spend any time dealing with the arguments about the test of expediency. Given the complete absence of connection between the defendant’s assets and England, it was unacceptable for Mobil to obtain the ex parte injunction in the first place. The English court did not have jurisdiction over the defendant’s assets located abroad and therefore the question of discretion (i.e. whether to exercise jurisdiction) was not applicable at all on the facts of the case.

A more recent example of a cautious approach was seen in Eastern European Engineering Ltd v. Vijay Construction (Pty) Ltd.Footnote ¹¹⁹ That case concerned a dispute between two companies based in the Seychelles about the lawfulness of termination by Eastern European Engineering Ltd (EEEL) of construction contracts in relation to a hotel in the Seychelles. The contracts were governed by Seychelles law and subject to International Chamber of Commerce (ICC) arbitration in Paris. EEEL obtained an arbitration award against Vijay and commenced enforcement proceedings in multiple jurisdictions, including in England. In the English court, EEEL also applied for a worldwide freezing injunction in aid of the enforcement proceedings. Vijay conceded that the English court had jurisdiction to grant a domestic freezing injunction limited to any assets in England. Butcher J refused to grant a worldwide freezing injunction due to the combination of following factors: (1) the insufficient connection of the parties and the dispute with England; (2) the fact that EEEL was not successful in obtaining similar injunctive relief from the Seychelles courts in relation to the assets in the Seychelles; (3) the possibility of inconsistent and conflicting decisions in relation to the same assets contrary to the principle of comity; and (4) the absence of exceptional circumstances such as international fraud. A domestic freezing injunction was granted even though there was limited evidence of the existence of substantial assets in England. Overall, the decision in Eastern European Engineering can be seen as evidence of the Commercial Court’s greater willingness to emphasise the exceptional nature of previous cases where a worldwide freezing injunction has been granted in support of foreign proceedings. The reasoning of Butcher J is consistent with the Court of Appeal’s indirect call for a more restricted scope of freezing injunctions in Masri v. Consolidated Contractors (No. 2).

5.3.6 Injunctions Collateral to Foreign Proceedings: A Summary

A domestic freezing injunction (i.e. an injunction limited to assets located in England) in support of foreign proceedings is not problematic. If the courts were to restrict collateral freezing injunctions to assets located in England and adopt my call for free-standing worldwide disclosure orders, claimants would remain protected. The current factors taken into consideration in relation to the exercise of discretion under section 25 of the 1982 Act are largely driven by functional considerations, including in particular the claimant’s need to extract information about the extent and location of the defendant’s assets located abroad (as evident from Duvalier and Motorola (No. 2)).Footnote ¹²⁰ The courts seem to be keen to provide assistance to claimants to overcome what could be described as ‘gaps’ in, or obstacles to, the availability of protection in other legal systems (as evident from Credit Suisse) but there is insufficient consideration of potential unfairness to defendants and the interests of foreign states. The courts should recognise the role of equipage equality as the theoretical foundation for freezing injunctions instead of promoting a narrow view of freezing injunctions as a weapon against unscrupulous defendants. Although the guidance from the Court of Appeal in Motorola v. Uzan (No. 2) suggests that any conflict with the orders of the foreign courts needs to be taken into account when considering whether to exercise jurisdiction, I have argued that such an attempt to cure the problems associated with encroachment is ‘too little and too late’ to protect defendants and the interests of foreign states. It is insufficient to remove the tactical incentives for financially strong claimants to make speculative ex parte applications to harass the defendant, and it does not prevent from the outset the indirect interference with the regulatory authority of foreign states in this field. A variety of proposals for reform to deal with the existing problems in this area will be made in the next chapter.

5.4.1 Presence in the Jurisdiction, Foreign Assets and English Proceedings

The first category consists of cases where the NCAD is present within the territorial jurisdiction but at least some of the NCAD’s assets are located outside the jurisdiction. This is not a controversial category as there is a strong connection to England. The presence of the NCAD in England means that the English court would have personal jurisdiction over the NCAD as of right by way of lawful service of the application notice. It would be up to the NCAD to challenge the jurisdiction under Part 11 of the Civil Procedure Rules. It is a starting point in English private international law that personal jurisdiction based on presence includes the power to order a party to do or not to do something abroad.Footnote ¹²¹ By restraining the NCAD from dealing with their assets located abroad, the English court would not even regard the injunction as extraterritorial because the widely held view is that a freezing injunction operates in personam rather than in rem.Footnote ¹²² Any non-compliance with the terms of the injunction in relation to the NCAD’s foreign assets would be enforceable in England, such as by way of proceedings for contempt of court.

5.4.2 English Proceedings and Service Out of the Jurisdiction

The second category consists of cases where the claimant intends to commence (or has already commenced) court proceedings against the CAD in England and the NCAD is not present in England. In such cases, the claimant needs to establish personal jurisdiction over the NCAD by service of the application notice out of the jurisdiction. One of the requirements for obtaining the court’s permission for service out is for the claimant to establish, up to the standard of a good arguable case,Footnote ¹²³ that one of the grounds of jurisdiction (or gateways) is applicable.Footnote ¹²⁴ Given that the claimant would not have a substantive claim against the NCAD, it would be difficult to find an applicable ground of jurisdiction. Possible options include the necessary or proper party gateway and the gateway for claims made to enforce any judgment or award.Footnote ¹²⁵

With regard to paragraph 3.1(10), the presence of the NCAD’s assets in England would provide a powerful argument that a Chabra injunction would be in aid of future enforcement proceedings in England.Footnote ¹²⁶ This is consistent with the Court of Appeal’s observations in Linsen International,Footnote ¹²⁷ where Stanley Burton LJ stated that: ‘The object of [paragraph 3.1(10)] is to enable enforcement of a judgment against assets within this country that belong to a defendant who is out of the jurisdiction.’Footnote ¹²⁸ A possible counter-argument in the future could be that paragraph 3.1(10) should not apply to pre-judgment Chabra injunctions and should only be used for post-judgment applications.Footnote ¹²⁹ Post-judgment freezing injunctions are more closely related to enforcement proceedings in comparison to pre-judgment injunctions.Footnote ¹³⁰ The courts have always taken a more liberal approach to post-judgment applications. This is illustrated by the Court of Appeal’s judgment in DST v. Shell International Petroleum,Footnote ¹³¹ where Sir John Donaldson MR explained:

A pre-judgment application for any type of freezing injunction should be treated with a greater degree of caution from the court as the risk of a wrongfully granted injunction cannot be completely eliminated. There is no reason why a cautious approach should not extend to the interpretation of paragraph 3.1(10) given that service out of the jurisdiction represents an exercise of long-arm jurisdiction over a foreign defendant. If we make the assumption that paragraph 3.1(10) does apply to pre-judgment Chabra injunctions, the authorities support the view that this provision would only enable the claimant to obtain an order limited to the NCAD’s English assets.Footnote ¹³³ There is some room for debate whether this territorial limitation on paragraph 3.1(10) is a matter of discretion or the existence of jurisdiction. The better view is that it is an issue relating to the existence of jurisdiction as the English courts should have no discretion to interfere with a foreign third party’s foreign assets. Such discretion can be regarded as contrary to the principle of international comity as it would enable the English courts to encroach upon the regulatory authority of sovereign foreign states in circumstances where there is insufficient connection with England. Further support for restricting the territorial scope is found in the courts’ interpretation of the ‘necessary or proper party gateway’. The judgment of Aikens J in C Inc. plc v. LFootnote ¹³⁴ suggests that service out is possible under paragraph 3.1(3) but that the injunction has to be limited to the NCAD’s English assets.

5.4.3 Foreign Proceedings and Service out of the Jurisdiction

The English courts have confirmed that they have a power to grant Chabra injunctions in support of foreign substantive proceedings, including against NCADs who are not present in England.Footnote ¹³⁵ In such cases, the foundation for the court’s power to grant the injunction is section 25 of the Civil Jurisdiction and Judgments Act 1982. There seem to be no difficulties for the claimant to find a ground of jurisdiction as the English courts have readily accepted the argument that paragraph 3.1(5) of Practice Direction 6B can be used for service out on a NCAD. It is clear from Linsen International v. Humpuss that the gateways in paragraphs 3.1(3) and 3.1(10) would not be available if the substantive proceedings are not in England.Footnote ¹³⁶

The application of section 25 of the 1982 Act involves a two-stage process.Footnote ¹³⁷ First, the court needs to be satisfied that a Chabra injunction would be available if the substantive proceedings had been in England rather than abroad. If it is available, at the second stage the court will have to determine, as a matter of discretion, whether it would be expedient or inexpedient to grant the injunction. The test of expediency is riddled with uncertainty despite a substantial number of judgments where it was applied, the vast majority of which are not Chabra cases but injunctions against CADs.Footnote ¹³⁸ It is useful at this point to make a comparison between Chabra and non-Chabra freezing injunctions in relation to the manner in which discretion has been exercised under section 25 of the 1982 Act. In applications for Chabra injunctions collateral to foreign proceedings, arguably the courts have already taken a more cautious approach. This is evident from Belletti v. Morici,Footnote ¹³⁹ where a Chabra injunction had been granted ex parte by Andrew Smith J but was set aside by Flaux J (as he then was), whose conclusion was that it was ‘inexpedient’ to grant the order. The reasoning was that the parents were domiciled in Italy and no assets under their control were situated in England. Even though the Chabra injunction was set aside by Flaux J at the return date hearing, the fact that Andrew Smith J granted the injunction means that the law in this area is far from satisfactory. It is submitted that the English courts need to go further in order to protect third parties and prevent illegitimate interference with the regulatory authority of the foreign courts. The most effective solution would be to introduce a mandatory requirement for the English courts to have jurisdiction over the assets in all cases where a Chabra injunction is sought in support of foreign substantive proceedings. Put differently, the proposal is to restrict all Chabra injunctions under section 25 of the 1982 Act to English assets and to treat this as a requirement relating to the existence of jurisdiction. Under this proposal, Andrew Smith J in Belletti v. Morici would have had no choice but to refuse the Chabra injunction at the ex parte stage as the NCADs (the Italian parents) had no assets in England.

Unsurprisingly, the proposal to restrict the scope of the jurisdiction under section 25 is not entirely consistent with the current practice, as illustrated by JSC VTB Bank v. Skurikhin.Footnote ¹⁴⁰ In that case, Burton J granted a worldwide order against two NCADs (English companies with foreign assets). The order was made in support of Russian substantive proceedings. Unlike the NCADs, the CAD was not present in England and the court only granted an injunction in respect of his English assets. Burton J’s decision to grant a worldwide order in support of foreign proceedings highlights the potential danger of treating the territorial scope of the Chabra injunction as a matter of discretion (i.e. exercise of jurisdiction). The case confirms that the English courts will exercise their discretion under section 25 to grant a Chabra injunction even in respect of the NCAD’s foreign assets as long as the NCAD is present in England. Although at first glance this may seem an attractive position, the somewhat murky reality is that there are numerous problems of policy and principle with granting worldwide orders collateral to foreign proceedings in any application for a freezing injunction,Footnote ¹⁴¹ let alone one where there is no substantive claim against the party sought to be restrained. One of these problems is that it ignores what used to be an important exception to the scope of the court’s jurisdiction up until the end of the Brexit transitional period: cases involving foreign substantive proceedings in an EU member state where Article 35 of the Brussels I Recast Regulation was applicable.Footnote ¹⁴² Where a Chabra (or any other type) of freezing injunction was sought in support of proceedings in an EU member state, it was necessary for the claimant to establish a ‘real connecting link’ between the subject matter of the order and the territorial jurisdiction of the English court.Footnote ¹⁴³ It was a matter of debate whether the presence of the CAD and/or the NCAD in England can constitute the real connecting link.Footnote ¹⁴⁴ The preferable view was that, at least as far as Chabra cases were concerned, providing evidence of English assets was the only means to meet the threshold.Footnote ¹⁴⁵ It follows that the proposal to restrict the territorial scope of Chabra injunctions under section 25 of the 1982 Act to English assets would ensure consistency with the approach under the EU regime. Indirect support for the proposal is the fact that there are a number of cases where it has been suggested that the real connecting link criterion is applicable outside the scope of the EU regime.Footnote ¹⁴⁶ If correct, this would mean that the end of the Brexit transitional period would not affect the application of the real connecting link criterion. Most recently, in Motorola Solutions, a case concerning application for various interim relief (including a Chabra injunction) in aid of enforcement of an Illinois judgment, Jacobs J observed:

The problem with some of the earlier cases, such as RBS v. FAL Oil, is that the interpretation of the real connecting link criterion appears to be considerably wider than my view and that of Males J (as he then was) in Cruz City 1 Mauritius Holdings v. Unitech. The inconsistency of the case law on this issue is undesirable for all stakeholders. It should be resolved by a single definition of a real connecting link with the effect of bringing the territorial scope of Chabra injunctions under section 25 in line with the position under the Brussels I Recast Regulation.

5.4.4 Arbitration Proceedings and Service out of the Jurisdiction

It is necessary to examine this category of cases because there are potentially insurmountable obstacles to service out of the arbitration claim form which do not exist in the context of court proceedings. One implication for commercial parties is that Chabra injunctions may have a more limited availability in any disputes subject to arbitration. Until we have an unequivocal statement from the Court of Appeal, it will remain controversial whether there is a sufficient justification for the rules on service out to vary in their scope depending on the type of proceedings (i.e. arbitration or litigation). Indeed, some claimants have sought to argue that there is a ‘lacuna’ in the rules on service out.Footnote ¹⁴⁸

There are inconsistent statements from the English courts on the availability of Chabra injunctions in support of arbitration proceedings where the NCAD is outside the jurisdiction. The root of the problem appears to be the scope of the potential gateways for service out of the jurisdiction in CPR rule 62.5. The uncertainty in this area is exacerbated by further disagreements on the scope of section 44 of the Arbitration Act 1996, including the issue of whether a one-size-fits-all approach should be applied to the different paragraphs of section 44(2). In PJSC Vseukrainskyi Aktsionernyi Bank v. Maksimov,Footnote ¹⁴⁹ Blair J took a broad view of the scope of the court’s powers stating that:

By contrast, in Cruz City 1 Mauritius Holdings v. Unitech,Footnote ¹⁵¹ Males J (as he then was) held that claimants may rely on CPR 62.5(1)(c) only against a party to the arbitration agreement. Obiter, the judge also considered that section 44 of the Arbitration Act 1996 and the corresponding gateway in CPR 62.5(1)(b) do not include any power to grant an injunction against a non-party.Footnote ¹⁵² One of the reasons for his narrow view of the scope of section 44 of the 1996 Act was that it was ‘unlikely that Parliament intended to give the English court jurisdiction to make orders against non-parties in support of arbitrations happening anywhere in the world’.Footnote ¹⁵³ Similarly, in DTEK Trading v. Morozov,Footnote ¹⁵⁴ Sara Cockerill QC came to the same conclusion in respect of CPR 62.5(1)(b) in the context of an application by the claimant against a third party for an interim order for preservation and inspection of a settlement agreement. The judge warned about the dangers of camouflaging this important issue as a matter of discretion:

The issue of whether service out is possible against NCADs was considered in January 2020 by the Commercial Court in Trans-Oil International SA v. Savoy Trading LP.Footnote ¹⁵⁶ The underlying arbitration proceedings related to a contract for the sale of wheat by Savoy Trading to the claimant. That contract was signed by Mr Melnykov, who had a power of attorney from Savoy Trading. Although Mr Melnykov was neither a party to the contract of sale nor personally liable, the claimant sought a Chabra injunction against him in respect of his foreign assets. Moulder J held that, in the light of the judgments in Cruz City 1 and DTEK, it was not possible to grant a Chabra injunction against Mr Melnykov as the gateway in CPR 62.5(1)(b) is not available against a non-party. It is significant to note that Mr Melnykov was not present in England and had no assets in the jurisdiction. It is submitted that, regardless of whether the gateway in CPR 62.5(1)(b) can be used to serve out a NCAD, the absence of any connection with England should be fatal to any application for a Chabra injunction. In order to ensure the English courts do not illegitimately encroach upon the regulatory authority of foreign states, there should be no possibility of obtaining a Chabra injunction against a foreign NCAD in respect of their foreign assets. By way of analogy with Sara Cockerill QC’s warning in DTEK, it is not enough to control such encroachment by a cautious exercise of discretion. Apart from protecting the interests of foreign states, a clear rule delimiting the existence of jurisdiction would protect NCADs from the dangers of multiple applications for Chabra relief in different jurisdictions.Footnote ¹⁵⁷

Most recently, the Court of Appeal in A v. C,Footnote ¹⁵⁸ in the context of an application in aid of foreign arbitration proceedings, held that under section 44(2)(a) of the 1996 Act it is permissible to make an order for the taking of evidence by way of deposition from a non-party witness. The Court of Appeal explained that this was the correct position regardless of the scope of the other heads of the subsection and whether or not they also apply in relation to non-parties. The court distinguished both Cruz City 1 and DTEK because the narrow views were concerned with section 44(2)(e) and section 44(2)(b) respectively. Males LJ commented that there was no reason to doubt the correctness of the decisions in Cruz City 1 and DTEK but reserved his opinion on the issue.Footnote ¹⁵⁹ It is submitted that, when assessing the scope of the different heads of section 44(2), the courts should take into consideration the fact that the degree of invasion of the rights of a non-party differs depending on the type of the measure sought. Given the analysis in Chapter 2 of the various extensions to its substantive scope, there is no doubt that a Chabra injunction is one of the most invasive types of relief that a claimant can apply for under section 44. Indeed, as the litigation in Cruz City 1 illustrates, a claimant applying for a Chabra injunction may choose to ‘throw the kitchen sink’ by also applying for disclosure and receivership orders. From this perspective, in addition to the convincing and detailed reasons given by Males J in Cruz City 1, the appellate courts should not hesitate to confirm that section 44(2)(e) does not include the power to grant orders against non-parties.