Marketmaker Beijing Co Ltd & Ors v CMC Group Plc & Ors

An interlocutory injunction requires an underlying legal or equitable cause of action, except in limited cases concerned with preserving assets, evidence or the court’s process. The court will not restrain a party from denying an alleged agency without a pleaded right supporting that relief, such as defamation, malicious falsehood or a contractual undertaking. An injunction must also be certain in scope and must not improperly compel a party to communicate statements it considers untrue.

An implied contractual term to comply with foreign criminal law cannot be established where the parties have addressed legal compliance and imposed the obligation on one party בלבד. Nor is interim relief appropriate to resolve a genuine dispute about foreign law, particularly where the proposed order is broad, uncertain and would expose the respondent to committal proceedings.

The claimants sought extensive interim injunctions against CMC Group Plc and Peter Andrew Cruddas. The proposed orders concerned alleged agency, compliance with Chinese law, preservation of records and confidential information, and interim payment of sums said to be due under introducing-broker agreements.

The application followed urgent without-notice relief granted by Fulford J on 7 June 2004, later varied by consent. The claimants alleged several formal and informal agreements and sought to preserve their position pending trial. The second defendant had not been served and was not represented. The central issues were whether the claimants had shown an arguable cause of action supporting each injunction and whether the proposed relief was sufficiently certain and appropriate for interlocutory determination.

1. Agency injunction. The application was dismissed. Under The Siskina [1979] AC 210, an interlocutory injunction is ancillary to a pre-existing cause of action, subject to limited exceptions concerning freezing relief, preservation of evidence and protection of the court’s process. The claimants had not pleaded defamation, malicious falsehood, or any contractual undertaking requiring the defendants to affirm Mr Taher’s agency.
2. The defendants’ acts of holding out did not create a general undertaking or justify a general injunction. Holding out operates in relation to a particular principal, agent and third party. The proposed orders were also impermissibly vague. “Agent” could bear different meanings, the scope of the alleged authority was undefined, and the orders could have prevented the defendants from honestly answering regulators or other authorities. Such relief would seriously interfere with freedom of speech without a clearly established legal right.
3. Chinese illegality injunction. The claimants could not establish an implied term requiring CMC to comply with Chinese law. The concluded agreements imposed compliance obligations on Obair and Forex, but not on CMC. The subject had therefore been considered by the parties and the contractual allocation could not be rewritten by implication.
4. Interim relief was additionally inappropriate because there was a genuine dispute about the content of Chinese law. The English court should not determine that foreign-law dispute on a quia timet basis where it was unnecessary to resolve a properly constituted dispute between the parties. The proposed injunction was also too broad, lacked specified unlawful conduct and lacked evidence of an intention deliberately to infringe Chinese law.
5. The applications for preservation of records and interim payments were unsupported by sufficient evidence and would risk inappropriate committal proceedings. The confidential-information injunction failed because the information was not identified with sufficient particularity. Applying the principles stated in Ocular Sciences Ltd v Aspect Vision Care Ltd & Ors [1997] RPC 289, the claimants had to identify the information said to be confidential. The application was dismissed in its entirety.