Unitel SA v Unitel International Holdings BV & Anor

To obtain a freezing order, an applicant must show a good arguable case, an objectively assessed real risk that a future judgment will be defeated by unjustified dissipation, and that relief is just and convenient. The preferred view was that the merits test remains the formulation in The ‘Niedersachsen’, although both that approach and the three-limb jurisdictional approach were applied because the authorities are confused. Under the Angolan Commercial Companies Law, filing a joinder application within six months can satisfy the statutory filing requirement. Relevant alleged wrongdoing may establish risk. Existing freezing orders do not preclude further relief where their durability and the defendant’s wider assets remain uncertain.

Unitel SA sought a freezing order against Isabel dos Santos in support of a damages claim arising from loans made to Unitel International Holdings BV and alleged breaches of directors’ duties. Ms dos Santos primarily argued that the claim had not been brought within the period required by Article 80(1) of the Angolan Commercial Companies Law. She also disputed the meaning of good arguable case, risk of dissipation and the utility of an additional order in light of existing freezing orders. The claim had been amended to join her as a defendant by order of HHJ Pelling KC on 25 May 2023, with permission to appeal refused on 4 October 2023. The central issues were whether Unitel satisfied the three requirements for freezing relief and whether the joinder application was filed in time.

The freezing order application was granted. The terms were to be finalised at a further hearing, and a worldwide order appeared appropriate in principle.

1. Applicable criteria. The applicant had to establish a good arguable case on the merits, an objectively assessed real risk that a future judgment would not be met because of unjustified dissipation, and that relief was just and convenient.
2. Good arguable case. The judge preferred the view that the merits test remained the formulation in The ‘Niedersachsen’ [1983] 2 Lloyd's Rep 600. However, the authorities were confused, particularly following Lakatamia Shipping Co. Ltd. v Morimoto [2019] EWCA Civ 2203. The judge therefore assessed the case under both that formulation and the three-limb approach in Brownlie v Four Seasons Holdings Inc [2017] UKSC 80, as explained in Kaefer Aislamientos SA de CV v AMS Drilling Mexico SA de CV [2019] EWCA Civ 10. Under the latter approach, the court should make a relative assessment where it reliably could and use the plausible contested evidential basis fallback only if it could not reach a decided conclusion. Unitel had the better argument on Article 80(1), and in any event had a plausible evidential basis.
3. Article 80(1). The provision concerned the company’s capacity to bring an indemnity claim following a shareholder resolution, rather than limitation. Issuing and filing the English joinder application within six months was capable of being procedurally equivalent to filing an action in Angola. Later joinder and service did not prevent Unitel from showing a good arguable case.
4. Risk of dissipation. The principles in Fundo Soberano De Angola v Santos [2018] EWHC 2199 (Comm), as approved with an adjustment in Lakatamia Shipping Co. Ltd. v Morimoto [2019] EWCA Civ 2203, applied. Deliberate alleged wrongdoing relevant to dissipation was sufficient in this case. The absence of dissipation after notice did not negate the risk, since the nature, liquidity and status of the assets, including unidentified assets, had to be considered. The approach in Tugushev v Orlov [2019] EWHC 2031 (Comm) was applied, while Holyoake v Candy [2018] EWCA Civ 297 was distinguishable on its facts.
5. Existing orders. Following AA v BB [2019] EWCA Civ 2203, existing freezing or restraint orders did not preclude further relief. Their durability was uncertain, and there was insufficient evidence that the additional burden would be disproportionate. A further order, including asset disclosure, was therefore just and convenient.

This was a first-instance application in ongoing Commercial Court proceedings. The claim began in 2020 against Unitel International Holdings BV. HHJ Pelling KC allowed the joinder of Ms dos Santos on 25 May 2023, and Males LJ refused permission to appeal on 4 October 2023. The freezing-order application was heard on 29 and 30 November 2023.