Grigori Fishman v Viktor Mangazeev

For a freezing injunction, the applicant must show a serious issue to be tried, a real and objectively assessed risk that assets will be unjustifiably dissipated before judgment, and that relief is just and convenient. The risk must be established by solid evidence; allegations of dishonesty, offshore structures and speculative business activity do not by themselves suffice. The court must distinguish improper dissipation from ordinary business expenditure. Relief should be proportionate and tailored to the assets and conduct giving rise to the risk. An injunction may therefore be limited to assets within the jurisdiction, with safeguards for reasonable legal, living and normal business expenses.

The claimant sought worldwide freezing relief in support of a claim for up to US $19.71 million arising from an alleged repudiatory breach of a loan agreement. The loan was intended to be protected by negative covenants concerning a residential property and an agreed share charge, although the share charge was never executed.

The defendant contended that a subsequent deed of settlement released the loan liabilities. The claimant disputed that construction and alleged that the defendant had charged the property without consent, failed to provide the share charge, and was likely to dissipate assets. The issues were whether there was a serious issue to be tried, whether there was a real risk of improper dissipation, and whether relief was just and convenient.

1. Serious issue to be tried. The scope of the releases in the Deed of Settlement raised a realistic issue requiring careful examination of the parties’ relationship, existing liabilities and the deed’s overall effect. The court expressed no provisional view on the merits of the competing constructions. The claimant therefore crossed the serious-issue threshold.
2. Real risk of dissipation. The applicable principles required an objectively assessed and substantial risk that a future judgment would be defeated by unjustifiable dissipation. Solid evidence was required. Ordinary business use of assets was not improper dissipation. Allegations of dishonesty, failure to dissipate during a period of awareness of the claim, establishment in the jurisdiction, and the use of offshore structures were relevant but not determinative.
3. The defendant’s covert decision to charge the property to Hilco without notifying the claimant, together with his refusal to provide the agreed share charge and his evasive explanations, amounted to sharp and underhand commercial conduct. It demonstrated a willingness to act covertly to obtain an advantage from assets within the jurisdiction. The Hilco borrowing was not itself dissipation, but it created a real risk of further charging or borrowing against the property.
4. The evidence also established a real risk that the remaining Barclays funds or other assets in the jurisdiction would be used otherwise than for proper business purposes. There was insufficient evidence that assets already outside the jurisdiction would be placed beyond reach. The defendant’s permanent residence and family connections in England did not eliminate the risk.
5. Just and convenient. A worldwide injunction in the terms sought would be disproportionately prejudicial. Relief was therefore limited to assets within the jurisdiction, including the property, shares in Wadjet and identified digital assets, subject to an aggregate value of £19.71 million. The order preserved reasonable legal, living and normal business expenditure, required notice or certification for substantial expenditure, and required fortnightly Barclays-account updates.
6. The defendant was permitted to give appropriately worded undertakings concerning the property and Wadjet shares, supported by confirmation that the consequences had been explained to him personally and by his signature. Otherwise, an injunction would operate to the same effect. The claimant was required to fortify its undertaking in damages by payment into court of £500,000 or alternative security.

First-instance application. No appellate history was stated in the judgment.