Lavinia Deborah Osbourne v Persons Unknown Category A & Ors.

Interim injunctive relief may be granted where there is a serious issue to be tried, damages are inadequate and the balance of convenience favours relief. Cryptoassets, including non-fungible tokens, are at least realistically arguable as property under English law. The court may permit service out of the jurisdiction where the claim satisfies a jurisdictional gateway and England and Wales is the appropriate forum. Where conventional service is unavailable, service by transfer of an NFT containing a link to the proceedings may constitute an alternative method for which there is good reason under the Civil Procedure Rules 1998.

The claimant alleged that two non-fungible tokens had been removed without her consent from a cryptoasset wallet and transferred through unidentified wallets. She sought continuation of an injunction restraining dealings with the tokens, permission to serve the claim and orders out of the jurisdiction, and permission to serve documents by NFT and email.

The injunction had previously been granted and extended by other High Court judges. The issues were whether the injunction should continue, whether the claim satisfied the requirements for service out, and whether NFT-based service should be authorised.

1. Injunction. Applying American Cyanamid Co v Ethicon Ltd [1975] A.C. 396, there was a serious issue to be tried. The claims included restitution and unjust enrichment against the alleged hackers and constructive-trust claims against persons possessing or controlling the tokens.
2. There was at least a realistically arguable case that NFTs are property as a matter of English law. The court adopted the reasoning of Lavender J and agreed with analogous conclusions concerning cryptoassets in AA v Persons Unknown [2020] 4 W.L.R. 35, Ion Science Ltd v Persons Unknown and Fetch.ai Ltd v Persons Unknown [2021] EWHC 2254 (Comm).
3. Damages were not an adequate remedy. The identity and means of the unknown defendants were uncertain, and the tokens had personal and unique value beyond their fiat currency value. The balance of convenience also favoured relief, although it was unnecessary to reach that issue.
4. For service out, the claimant had to show a serious issue to be tried, a good arguable case within a Practice Direction 6B gateway, and that England and Wales was the appropriate forum. There was a good arguable case that the tokens had been located in England and Wales while in the claimant’s wallet. The court left unresolved questions concerning gateways 11 and 15(b), and the construction of gateway 15(a).
5. There was a strongly arguable case that English law governed the alleged constructive trust and the subsequent receipt of the tokens. Gateway 15(c) therefore provided a sufficient basis for service out.
6. Under rules 6.15(1) and 6.27, there was good reason to authorise service by NFT because conventional service was unavailable. The claimant could serve by updating repositories linked through previously airdropped NFTs, transferring NFTs to future possessors, and emailing the third defendant. The injunction and associated service orders were accordingly continued and granted.

The judgment records earlier High Court orders granting and extending the injunction, including orders by HHJ Pelling QC on 10 March 2022 and Lavender J on 12 September 2022. This judgment continued the injunction and made further orders for service out of the jurisdiction and alternative service.