Kensington International Ltd. & Anor v Republic of the Congo

The court may grant interim relief in support of substantive enforcement proceedings abroad, including proceedings concerning the enforcement of judgments. Under section 25 of the Civil Jurisdiction and Judgments Act 1982, the court should first ask whether the relief would be available if the foreign proceedings were domestic. It must then consider whether the absence of wider jurisdiction makes relief inexpedient. The jurisdiction must be exercised with caution and respect for third parties. Relief may include orders preserving assets or providing information about them, although it cannot be used merely to obtain evidence for trial. A third party debt order requires a debt due or accruing due to the judgment debtor; it cannot accelerate payment or improve the creditor’s position. Interim injunctions may properly support foreign attachment proceedings where there is a strong public interest in enforcing judgments and evidence of deliberate judgment evasion.

The claimant, a judgment creditor of the Republic of the Congo, obtained without-notice injunctions and disclosure orders against Vitol Services Ltd and Vitol Broking Ltd. The orders restrained payments and dealings connected with Congolese oil cargoes and supported attachment proceedings in Switzerland.

The third parties applied to discharge the orders, sought damages under the claimant’s cross-undertaking, and requested a declaration that they were free to trade with Congolese entities provided transactions were not at an undervalue under section 423(1) of the Insolvency Act 1986. The central issues were the jurisdiction to grant ancillary relief and disclosure, the scope of section 25 of the Civil Jurisdiction and Judgments Act 1982, and whether the injunctions were appropriate at an interlocutory stage.

1. Disposition. The application to discharge the injunctions was dismissed. The injunctions continued in amended form until 28 days after judgment in the Swiss proceedings concerning Kensington’s complaint, unless further extended. The proposed declaration was refused at the interlocutory stage.
2. Third party debt orders. A third party debt order requires a creditor-debtor relationship between the judgment debtor and the third party. There must be money due or accruing due. The order cannot accelerate payment or place the judgment creditor in a better position than the judgment debtor. The court had jurisdiction under section 37 of the Supreme Court Act 1981 to grant ancillary relief in support of a prospective interim third party debt order.
3. Foreign enforcement proceedings. Section 25 of the Civil Jurisdiction and Judgments Act 1982 extends in principle to substantive proceedings concerned with enforcement of judgments. The Swiss attachment and related complaint therefore fell within the section. The court rejected the argument that they were merely ancillary to the English proceedings.
4. Section 25 test. The court must first ask whether the facts would justify the relief if the substantive proceedings were brought in England. If so, it must ask whether the absence of jurisdiction apart from section 25 makes relief inexpedient. Relief may include information about asset location and orders preserving assets, but section 25(7)(b) excludes measures directed solely to obtaining evidence for the merits.
5. Discretion. The jurisdiction must be exercised with caution, restraint and respect for third-party interests. Relevant considerations included the strong public interest in recognition and enforcement of competent judgments and the need to expose deliberate schemes designed to evade enforcement. The evidence required close investigation, but justified continued interim protection pending determination by the Swiss court.
6. The declaration sought by the third parties was inappropriate without a full trial, disclosure and cross-examination. Kensington was required to pursue the Swiss complaint with reasonable expedition, increase security for its cross-undertaking in damages to US$1 million, and provide the judgment to the Swiss court. The parties remained at liberty to apply, including on enforcement of the cross-undertaking.

The judgment describes earlier orders made by Gloster J on 5 and 10 April 2006. The third parties’ application to discharge those orders was dismissed, with amendments to the injunctions and related undertakings.