Nederlandse Financierings-maatschappij Voor Ontwikkelingslanden N.V. v Société Bengaz S.A.

On a return date for interim injunctions, the court may continue the injunctions while allowing a respondent a defined period to seek discharge without proving a change of circumstances, where procedural fairness requires further time but immediate protection remains appropriate.

Where an injunction applicant is domiciled abroad and has not shown sufficient assets within the jurisdiction, the court may require fortification of the cross-undertaking in damages. The court need not require proof on the balance of probabilities that loss will occur, but must have a proper basis for concluding that a significant and realistic risk of loss exists. The amount of fortification should reflect the evidence and should not be speculative.

The claimant obtained without-notice injunctions, including a freezing injunction, from Mr Justice Bright on 5 July 2023. On the return date, the first defendant sought an adjournment to obtain English legal advice and representation in relation to extensive English-language materials.

The court also considered the second defendant’s request for fortification of the claimant’s cross-undertaking in damages. The second defendant relied on the risk of competing foreign orders, penalties and related costs. The central issues were whether the injunctions should continue, whether the first defendant should have further time to challenge them, and whether the cross-undertaking required security.

1. Continuation and liberty to apply. The injunctions were continued. The court declined simply to adjourn the hearing because notice had been given and the parties had attended, but recognised that the first defendant might not reasonably have been ready to respond substantively to extensive material. The order continuing the injunctions was made without prejudice to the first defendant’s liberty to apply for discharge without showing a change of circumstances. Any such application, with supporting evidence, had to be issued within six weeks.
2. Risk supporting fortification. The second defendant faced a realistic risk of losses from competing foreign claims and orders affecting the restrained funds. The court accepted that legal costs incurred in foreign proceedings could fall within the relevant risk, while costs of the English proceedings would ordinarily be addressed through security for costs.
3. Amount. The applicant need not prove on the balance of probabilities that loss had been or would be caused by the injunction. It was nevertheless necessary to identify a proper basis for concluding that a significant loss might arise. The proposed US$2 million figure was speculative. The evidence supported a more limited figure of approximately £300,000.
4. Foreign assets. The claimant’s substantial assets in the Netherlands did not answer the application because there was no evidence of assets within the jurisdiction. The court applied the principle identified in Tarasov v Nassif that the key question was whether assets were within the jurisdiction. The claimant’s foreign domicile and the uncertainty surrounding enforcement after the United Kingdom’s withdrawal from the European Union justified security.
5. Order. Fortification of the cross-undertaking was required in the sum of £300,000, by a first-class bank guarantee from a London bank or another convenient form.