Glidepath Holding BV & Ors v John Thompson & Ors

The court retains an inherent jurisdiction to grant interlocutory relief in support of an intended arbitration where necessary to preserve assets or evidence, or where it is just and convenient to do so. That jurisdiction is wider than the statutory power under Arbitration Act 1996, which does not permit disclosure directed to substantive issues. A later agreement to arbitrate does not retrospectively remove jurisdiction properly exercised at the interim stage. Orders obtained without full and frank disclosure are not automatically discharged: the court must assess materiality, gravity, remediability, explanation, prejudice, proportionality and the overriding objective. Where no arbitrator has been appointed and no arbitration has begun, the court may also grant Norwich Pharmacal relief to assist tracing and protect a prospective remedy.

Three corporate claimants brought claims against four individuals and two companies arising from the collapse of a business venture. The claims included fraud, mismanagement, financial compensation and proprietary relief. Holland J had granted freezing, disclosure and disk-imaging orders, later varied by Andrew Smith J.

The first and sixth defendants sought to set aside those orders for want of jurisdiction and material non-disclosure, to recover documents and compliance costs, and alternatively to invoke section 44(6) of the Arbitration Act 1996. They also challenged Norwich Pharmacal orders made against third parties. The claimants accepted that the proceedings should be stayed to arbitration and sought appointment of an arbitrator under section 18. The central issues were whether the interim orders had been within the court’s jurisdiction, whether disclosure failures justified discharge, and whether the statutory appointment power was available.

1. Jurisdiction for interim relief. The court’s inherent jurisdiction, now reflected in section 37 of the Supreme Court Act 1981, enabled it to grant interlocutory relief despite arbitration clauses where there was an arguable case and a reasonable apprehension of dissipation. That jurisdiction was not retrospectively removed by the claimants’ later concession to a stay. The March orders were therefore not made without jurisdiction. The statutory jurisdiction under section 44 of the Arbitration Act 1996 was narrower and would have permitted preservation of assets or evidence, but not disclosure relating solely to substantive issues.
2. Non-disclosure. The applicants did not have to prove that the orders would necessarily have differed, or that the non-disclosure was in bad faith. In a complex without-notice application, merely mentioning arbitration clauses might be insufficient. However, the matters identified here were not material non-disclosures. Advancing legal arguments which later failed did not itself amount to material misrepresentation. In any event, setting aside the orders would have been disproportionate and would have turned the full-disclosure rule into an instrument of injustice, applying the considerations identified in Memory Corporation v. Sidhu [2000] 1 W.L.R. 1443.
3. Norwich Pharmacal relief. The orders against third parties were within the court’s jurisdiction. No arbitration clause governed those third parties, and where no arbitrator had been appointed and no arbitration had begun, the court could assist by ordering information and documents relevant to tracing in circumstances involving alleged fraud and possible dissipation.
4. Arbitration and appointment. The proceedings had to be stayed under section 9 of the Arbitration Act 1996. The alleged July 2004 ad hoc agreement had not been concluded. Section 18 was unavailable because no appointment procedure had failed, and the statutory requirements, including the relevant notice under CPR Part 62, had not been fulfilled. The application to set aside was dismissed, the section 18 application was dismissed, and costs relating to the arbitration were reserved to the arbitrator; the defendants received their costs of the 5 May variation.

Not stated in the judgment.