Harrington & Charles Trading Company Limited & 7 Ors v Jatin Rajnikant Mehta & 4 Ors

Further disclosure in support of a freezing injunction may be ordered where there is credible evidence of an obvious discrepancy between assets previously held and assets disclosed, together with a real possibility that further assets fall within the injunction. The court must then consider necessity, urgency, proportionality and whether the order is just and convenient. The order should not improperly determine the substantive claim or give relief equivalent to final relief without trial. Where those requirements are met, the existence of existing freezing relief does not prevent further disclosure. Alternative proprietary and Norwich Pharmacal bases need not be determined if the existing jurisdiction is sufficient.

The claimants, companies in liquidation and their liquidators, alleged that the defendants were involved in the misappropriation, laundering and concealment of approximately US$1 billion. Worldwide freezing orders, asset-disclosure orders and passport restraints had been granted without notice by Mr Justice Edwin Johnson on 27 May 2022, under [2022] EWHC 1361 (Ch), and continued by consent.

On the adjourned return hearing, the claimants sought further disclosure concerning the whereabouts of alleged fraud proceeds, relying on the existing freezing order, proprietary and tracing claims, and Norwich Pharmacal relief. The defendants challenged the relief and its procedural basis. The court also considered whether passport restraints should be extended.

1. Further disclosure. The court ordered further disclosure in support of the existing freezing and disclosure orders. Credible evidence showed an obvious discrepancy between assets previously held by the defendants and assets disclosed, and a real possibility that further assets were subject to the freezing order.
2. The relevant discretionary considerations were whether further information was necessary despite the existing injunction, whether the need was urgent, whether the order was proportionate given its potential burden, and whether it was otherwise just and convenient. The requested disclosure merely required the defendants to state what they already knew about the whereabouts of specified assets and was not unduly onerous.
3. The court considered that delay, the existing freezing relief and the risk of dissipation did not justify waiting until the effective return hearing. It was unnecessary and undesirable to determine the alternative proprietary and tracing arguments, or the Norwich Pharmacal application, since the existing jurisdiction sufficed. The court expressed no preliminary view on those unresolved issues.
4. Passport restraints. It was just and convenient to extend the passport orders for 14 days after the further disclosure. The restraint was exceptional but, in the circumstances, caused no material interference with the liberty of the first, second and fourth defendants. The third defendant could retain his passport during his rescheduled holiday and was then required to surrender it pending the further period.
5. The issue concerning further disclosure of the sources of funding for legal and living expenses remained unresolved. Costs were provisionally reserved to the effective return date.

This was a first-instance decision on applications made during ongoing proceedings. The judgment records that worldwide freezing and related orders had previously been made without notice by Mr Justice Edwin Johnson under [2022] EWHC 1361 (Ch). The present court continued the relevant interim protections and made further disclosure and passport orders.