Compagnie Noga D'importation Et D'exportation SA & Anor v Australian and New Zealand Banking Group & Ors

Variation of a freezing injunction is governed by the interests of justice. The applicant must show that the variation is appropriate and provide the evidence necessary to justify it.

The court must assess objectively the overall justice of the proposed payment, including its likely effect on the prospect of a future judgment being satisfied. A freezing injunction protects the effectiveness of the court’s process; it does not give the claimant security or create an untouchable fund. Where payment is sought for another person’s recognizance, the court may require that person and those with the relevant assets to seek permission to use their own frozen funds first. The court may scrutinise such applications with particular scepticism where disclosure has been incomplete.

The claimants sought to preserve assets under a worldwide freezing injunction granted in related fraud proceedings concerning bills of exchange and their alleged proceeds. The ninth defendant, Mr Bagudu, applied to vary the injunction so that he could provide CHF 5 million as bail for Abba Abacha, the brother of his business associate and a co-defendant’s brother, in Swiss money-laundering proceedings.

The proposed payment would come from Mr Bagudu’s unfrozen London accounts. The claimants opposed the application, relying on the absence of full evidence about Abba Abacha’s, his wife’s and Mohammed Abacha’s assets, and the failure to seek release of the Abacha family’s frozen assets. The issue was whether the interests of justice required the freezing injunction to be varied.

1. Application dismissed. The court declined to vary the freezing injunction to permit Mr Bagudu to provide the bail.
2. The essential question was whether the variation was in the interests of justice. Because the original injunction had been granted on the basis of a real risk of dissipation, the burden lay on the applicant to establish that the variation was appropriate and to provide the necessary evidence.
3. The court had to examine objectively the overall justice of allowing the payment. Relevant considerations included the likely effect on the prospects of satisfying a future judgment, while recognising that the injunction was not intended to provide security for the claimants or create an untouchable fund.
4. The payment proposed was not an ordinary payment in the course of business or living. It concerned another person’s bail and was supported by evidence that did not establish a compelling social or cultural obligation.
5. Where frozen funds are sought for a recognizance on behalf of another person, the same principle applicable to funding a defence applies. It may be necessary to show that there are no other funds or sources which should, as a matter of objective fairness, be used first. Abba Abacha and members of his family had not sought permission to use their own known or potentially available assets.
6. The court was entitled to approach the evidence with healthy scepticism. There was no direct evidence from Abba Abacha, his wife or Mohammed Abacha, and there had previously been adverse findings concerning the disclosure of Mohammed Abacha’s assets. In those circumstances, the applicant had not shown that the proposed variation was just.