Kieran Gallahue & Ors v Akhilesh Shailendra Tripathi & Anor

For a freezing order, the applicant must establish a good arguable case, an objectively assessed real risk that assets will be dissipated so that a judgment may go unsatisfied, and grounds for believing that the respondent has assets against which enforcement may take place.

A worldwide order additionally requires grounds for believing that assets within the jurisdiction are insufficient and that further assets may exist abroad. The court must assess whether the scope of relief is just and convenient, including its intrusiveness and any protective exceptions.

A proprietary injunction may be granted where there is a serious issue as to a proprietary interest, the balance of convenience favours relief, and it is just and convenient to preserve the assets pending trial.

The claimants sought without-notice relief in support of claims arising from the purchase of shares in Signifier Medical Technologies Limited. They alleged that representations concerning the ownership of the shares and the destination of the sale proceeds were fraudulent or negligent, and that the proceeds had ultimately been transferred to the first defendant.

They sought a worldwide freezing order and a proprietary injunction over the proceeds or traceable substitutes. The application also concerned losses said to arise from later Series D and Series E investments. The central issues were whether the threshold for freezing relief was met, whether worldwide relief was justified, and whether the alleged rescission gave rise to a sufficient proprietary claim.

1. Freezing order. The court was satisfied that the claimants had a good arguable case concerning the share sales. The Series D claim was sufficiently strong to be included, but the Series E claim was excluded from the freezing-order quantum because reliance was less clear and was not specifically pleaded or expressly evidenced.
2. The court found an objectively real risk of dissipation. The alleged dishonest conduct, the apparently untrue statement that the first defendant had not benefited from the sales, and his use of offshore structures supported that conclusion.
3. There were good arguable grounds for believing that the first defendant had assets within and outside the jurisdiction. The evidence justified a worldwide order because assets within the United Kingdom were unlikely to satisfy the claim. The existence of an earlier freezing order did not prevent a further order, although the additional burden on the defendant had to be considered.
4. The order was just and convenient. Its usual exceptions for living expenses and reasonable legal fees materially reduced its potential prejudice, and the claim had been brought promptly after the relevant information was discovered.
5. Proprietary injunction. The alleged fraudulent misrepresentations and rescission gave rise to a good arguable case that the claimants held a proprietary interest in the sale proceeds through a constructive trust and could trace them. Applying the American Cyanamid principles, there was a serious issue to be tried, the balance of convenience favoured preserving the assets, and relief was just and convenient to hold the ring pending determination of ownership.
6. The court was prepared to make the worldwide freezing order and proprietary injunction, subject to finalisation of the wording and the reservation concerning the Series E subscription. A prompt return date was ordered so that the first defendant could challenge the relief.

First-instance decision. No earlier appellate decision is stated in the judgment.