Rogachev v Goryainov

A freezing injunction requires a good arguable case for a monetary claim, a real risk of dissipation, and a restraint no wider than necessary. An applicant seeking relief without notice must investigate the case, disclose material facts, and present the evidence fairly. Material non-disclosure may justify discharge where it affected the decision, even if it was not deliberate.

An interim proprietary injunction is governed by the American Cyanamid approach. The claimant must show a serious issue to be tried, that the balance of convenience favours relief, and that it is just and convenient. Damages may be adequate even where proprietary rights are asserted. Delay and inadequate fortification may also justify refusal.

The claimant and defendant had operated a joint venture involving several Moscow markets, including V177. The claimant alleged that the defendant had breached contractual and equitable obligations by failing to transfer V177 into the joint venture holding structure and by negotiating its sale without consent.

The claimant obtained a worldwide freezing injunction without notice. The defendant sought its discharge, relying on non-disclosure, the absence of a good arguable monetary claim, the absence of a real risk of dissipation, and the wider circumstances. The claimant later sought a proprietary injunction restraining dealings with V177.

The issues were whether the freezing injunction should be discharged or granted afresh, and whether an interim proprietary injunction should be granted.

1. The claimant failed adequately to comply with the duty of full and frank disclosure. The without-notice application presented the defendant’s conduct as clandestine, failed fairly to explain the claimant’s prior knowledge and delay, and omitted material aspects of the negotiations, including the 2017 Plan. The failures concerned knowledge, delay, the likely defence, and risk of dissipation. The Kommersant notice and the history of the negotiations were not properly drawn to the first judge’s attention. The freezing injunction was therefore discharged.

2. The claimant could not establish a good arguable case for a monetary claim. The original claim for the amount paid in 2014 was misconceived because the payment was a loan and no misapplication or inducement by misrepresentation was alleged. The later case was internally inconsistent: it alleged both loss of proprietary rights and continuing proprietary rights. No accrued monetary loss had been identified while V177 remained unsold.

3. There was no real risk of dissipation. The sale had been publicly advertised, the parties had engaged in extensive negotiations to terminate the joint venture, and the defendant’s use of companies or nominees did not itself establish concealment. An offer to place at least half the sale proceeds into escrow was inconsistent with a dissipation risk. The court also considered the claimant’s control of other joint venture assets to be substantial security.

4. For an interim proprietary injunction, the claimant had to establish a serious issue to be tried, that the balance of convenience favoured relief, and that it was just and convenient. A serious issue existed as to proprietary or contractual rights concerning V177. However, damages were an adequate remedy. The claimant had produced no evidence that his loss could not be quantified, and his primary case itself sought damages or equitable compensation.

5. The proposed proprietary injunction was also refused because the sale to Lenta might be jeopardised, the existing fortification of the cross-undertaking was inadequate, and the claimant had delayed for almost six months after learning of the proposed sale. The claimant’s applications for a fresh freezing injunction and for a proprietary injunction were dismissed.