Uconinvest LLC v Jysan Holding LLC & Ors

For a without-notice freezing injunction, the applicant must make a full, accurate and fair presentation of all material facts, including facts which may support an anticipated defence. Material non-disclosure ordinarily requires discharge of the injunction, even if the order might otherwise have been granted.

The court retains a discretion to grant fresh or continued relief where the interests of justice require it. That discretion is exercised sparingly and requires a proportionate assessment of the non-disclosure, deterrence, the merits, the risk of dissipation and the prejudice to each party.

For a stay under section 9 of the Arbitration Act 1996, the court identifies the substantial matters in issue and then decides whether each falls within the arbitration agreement. An agreement covering disputes connected with a shareholders’ agreement does not ordinarily extend to distinct fiduciary-duty, unlawful-distribution, fraud or shareholder lock-in allegations remote from that agreement.

The petitioner, a minority shareholder in Jusan Technologies Limited, presented a petition under section 994 of the Companies Act 2006 alleging unfair prejudice arising from transactions, remuneration, post-settlement payments, an undervalue sale of Kazakh assets and the alleged exclusion of its shares from a proposed sale.

Following a without-notice application, the court granted freezing relief against the company and its majority shareholder. The respondents sought discharge for material non-disclosure, stays in favour of LCIA arbitration under section 9 of the Arbitration Act 1996, and related orders concerning service out and privacy.

The central questions were whether the petitioner was bound by the relevant arbitration agreements, whether the petition matters fell within their scope, whether the freezing order had been fairly obtained, and whether any fresh injunction should be granted.

1. Arbitration agreements. The petitioner was bound by the arbitration clauses in the two share sale agreements. It was not proved to be bound by the shareholders’ agreement or either deed of adherence. A deed of adherence was a single multilateral novation requiring execution and delivery by all identified parties. The absence of QAZ42’s execution therefore prevented the deeds taking effect. The evidence did not establish a later agreement, estoppel or detrimental reliance sufficient to alter that conclusion.
2. Scope and stay. Applying the two-stage approach in Republic of Mozambique v Privinvest Shipbuilding SAL (Holding) [2023] UKSC 32, the substantial matters in issue were identified by reference to the substance of the dispute, including foreseeable defences. None fell within the sale agreements. Had the petitioner been bound by the shareholders’ agreement, only the wrongful-settlement issue would have fallen within its arbitration clause, because of the arm’s-length disposal obligation concerning material subsidiaries. The other allegations were remote from the agreement. No stay was granted.
3. Fair presentation. The petitioner had seriously failed to disclose material facts, including its controller’s involvement in settlement negotiations, knowledge of proposed payments, involvement in company transactions and the true position concerning the proposed sale of its shares. The duty required disclosure of potentially adverse facts whether or not the petitioner considered them ultimately decisive. The failures were not innocent, although deliberate deception was not found. The freezing injunction was therefore discharged.
4. Fresh relief. The court considered the interests of justice, the importance of deterrence, the revised and substantially lower arguable value of the claim, the risk of dissipation and the absence of creditor prejudice. It refused relief against Jysan but granted a fresh injunction against the company, limited to US$8.4 million in the Bangladesh bank account, subject to ordinary-business expenditure on two clear working days’ notice. The order was not granted as security for the claim.
5. Service and privacy. Permission to serve Jysan out of the jurisdiction was maintained because the non-disclosure did not undermine the arguable case, the jurisdictional gateway or Jysan’s status as a necessary and proper party. The proceedings could be heard and handed down publicly once the stay applications had been refused.

First-instance decision. The judgment does not state any prior appellate decision.