Guerrero & Ors v Monterrico Metals Plc & Anor (Rev 1)

On an inter partes application to continue a freezing injunction, the court should not finally resolve sharply disputed facts or undertake a detailed determination of contested legal issues. The applicant need show a good arguable case, not establish the claim on the balance of probabilities. The court must then decide whether injunctive relief is just and convenient, taking account of the risk of dissipation, proportionality, the likely value of the claim and the effect on legitimate commercial activity. A cross-undertaking in damages may be required even where the applicants are impecunious, although it need not be fortified. The court may allow a realistic sum for damages, costs and after-the-event insurance, but should discount speculative or overstated amounts.

The claimants, Peruvian protesters, alleged that they had been detained and mistreated during protests concerning a proposed mine in Peru in 2005. They claimed damages against Monterrico Metals plc and its subsidiary, Rio Blanco Copper SA, alleging direct, vicarious and negligence-based liability under English and Peruvian law.

Burton J granted a worldwide freezing injunction against Monterrico on 2 June 2009. Irwin J continued it on 16 June 2009. The claimants sought its continuation, disclosure orders, joinder of further claimants and directions. Monterrico alleged material non-disclosure, failure to show a good arguable case and disproportionality. The central issues were whether the injunction should continue and, if so, in what amount and on what terms.

1. Continuation of injunction. The claimants had not presented the fullest account of the evidence on the without-notice application. In particular, the court should have been told about the alleged shooting of a police officer, uncertainty about the place of a death, doubts concerning the presence or involvement of company executives and the defendants’ translation of a press release. Those shortcomings did not, however, disentitle the claimants to relief because the principal evidence still disclosed a good arguable case that the police had committed unjustifiable violence and degrading treatment, and the critical question of company responsibility remained genuinely disputed.
2. Good arguable case. For an interim freezing injunction, the court should not undertake the detailed resolution of contested facts or extensive determination of limitation, foreign-law and corporate-responsibility issues. The evidence concerning Monterrico’s possible participation or responsibility was sufficiently arguable to found a cause of action, despite substantial weaknesses. A focused Part 24 application was the more appropriate procedure for detailed arguments on legal liability.
3. Risk and discretion. There was a real risk that Monterrico would not retain assets within the jurisdiction sufficient to satisfy a judgment. In the circumstances, continuation of some freezing relief was just and convenient under section 37(1) of the Supreme Court Act 1981, now the Senior Courts Act 1981. The order should preserve ordinary and proper business dealings and should extend, in practical effect, to the relevant subsidiary assets.
4. Quantum and safeguards. The court reduced the damages figure to £1.6 million, discounted projected costs to £2.85 million and allowed £565,000, representing 50 per cent of the estimated after-the-event insurance premium. The appropriate freezing amount was therefore £5,015,000. The claimants were required to use best endeavours to obtain the proposed insurance and to give an unfortified cross-undertaking in damages. Further disclosure would be considered if security was not provided.

The judgment itself describes prior interlocutory orders:

• High Court (Queen’s Bench Division): Burton J granted a worldwide freezing injunction on 2 June 2009.
• High Court (Queen’s Bench Division): Irwin J continued the injunction on 16 June 2009.
• High Court (Queen’s Bench Division): the present court continued relief in a reduced sum of £5,015,000, subject to further argument on the precise order.