Blue Holding & Ors v United States of America

Relief under section 25 of the Civil Jurisdiction and Judgments Act 1982 must have some utility which supports or is ancillary to the foreign proceedings. Enforcement in England is not essential if the relief assists enforcement elsewhere.

A foreign authority cannot use section 25 to circumvent the comprehensive statutory regime governing restraint and recovery of criminal proceeds at the instance of United Kingdom enforcement authorities. Where those authorities have declined to seek a prohibition order, a freezing injunction sought directly by the foreign authority is inexpedient. The scheme’s allocation of discretion, substantive safeguards and compensation provisions must be respected.

The United States brought civil forfeiture proceedings in rem against assets allegedly connected with money laundering. The appellants were Singapore companies whose investment portfolios in England included assets targeted by those proceedings.

Field J continued a freezing injunction under section 25 of the Civil Jurisdiction and Judgments Act 1982. He considered it expedient to preserve the assets pending a possible application by United Kingdom enforcement authorities under the Proceeds of Crime Act 2002 (External Requests and Orders) Order 2005, although those authorities had declined to apply at that time.

The central issue was whether section 25 could be used in that way despite the comprehensive statutory regime for prohibition and recovery orders. The court also considered whether a United States forfeiture judgment would be enforceable at common law and whether an earlier settlement between Nigeria and an alleged wrongdoer affected the application.

1. Appeal allowed. The freezing injunction was discharged. The statutory regime for obtaining prohibition and recovery orders at the instance of United Kingdom enforcement authorities made it inexpedient for the foreign authority to obtain equivalent relief directly under section 25 of the Civil Jurisdiction and Judgments Act 1982.
2. Section 25 confers a broad ancillary jurisdiction. Interim relief must nevertheless have some utility which supports or assists the substantive foreign proceedings. The inability to enforce the foreign judgment in England is relevant but is not invariably decisive. Relief may, for example, assist enforcement in a third jurisdiction.
3. The United States proceedings were exclusively in rem. They sought an adjudication upon the title or disposition of specified property against the world and contained no claim for personal relief. Notice to persons interested in the property, and their opportunity to appear, did not transform the proceedings into proceedings in personam. A resulting judgment concerning assets situated outside the United States would not be enforceable in England at common law.
4. Even if the judgment could be characterised as in personam, it would remain unenforceable because it would enforce a foreign penal law. The proceedings required proof of criminal wrongdoing and sought forfeiture of assets to the United States Government. Their character was penal rather than compensatory. Any later discretionary remittance of proceeds for Nigeria’s benefit did not alter that character.
5. Parts 4A and 5 of the Proceeds of Crime Act 2002 (External Requests and Orders) Order 2005 constituted a detailed and comprehensive regime. It reserved applications to designated United Kingdom enforcement authorities, preserved their discretion, imposed substantive restrictions and provided a compensation mechanism. A foreign authority’s direct application under section 25, particularly without a cross-undertaking in damages, would circumvent those safeguards.
6. The earlier settlement between Nigeria and the alleged wrongdoer did not independently require refusal of relief. Its effect upon the United States forfeiture claim was for the United States court. It did not, however, justify bypassing the statutory regime.

Gloster LJ gave the judgment. Beatson LJ and Sir Colin Rimer agreed.

1. Court of Appeal (Civil Division): The appeal was allowed and Field J’s freezing injunction was discharged: [2014] EWCA Civ 1291.
2. High Court, Queen’s Bench Division: Field J continued the freezing injunction originally granted without notice by Teare J under section 25 of the Civil Jurisdiction and Judgments Act 1982. No neutral citation for Field J’s judgment is stated.