Astor Asset Management 3 Limited & Ors v Ricardo Benjamin Salinas Pliego & Anor

On a without-notice application, the duty of full and frank disclosure includes material disputed allegations where the fact that the allegations were made may affect the court’s decision. The court deciding a discharge application should not conduct a mini-trial to resolve disputed underlying facts, unless they are truly plain. Materiality is assessed by reference to the case as presented when relief was sought. Evidence of ability to pay may include indirect access to assets where willingness to pay is not in doubt. At the without-notice stage, the court must consider whether fortification is needed for realistically foreseeable interim loss. On the evidence, the alleged matters did not materially undermine the claimant’s probity, willingness or ability to pay.

The claimants obtained worldwide freezing orders and proprietary injunctions against the appellants in August 2024. The appellants sought discharge on six alleged failures of full and frank disclosure. Mr Justice Calver rejected all six grounds and dismissed the application: [2024] EWHC 2522 (Comm).

The appeal concerned only the allegation that insufficient disclosure had been made about the first claimant’s wealth and probity. The central issues were whether disputed allegations had to be disclosed despite being contested, and what information was required concerning the claimants’ ability and willingness to repay approximately US$114 million and meet the cross-undertaking in damages.

1. The appeal was dismissed unanimously. Popplewell LJ gave the judgment, with Arnold LJ and Elisabeth Laing LJ agreeing.
2. The duty on a without-notice applicant is a high duty of full and accurate disclosure, fair presentation and proper enquiry. Materiality concerns the effect of the omission on the court’s decision, not whether the evidence could have been improved with hindsight. The court endorsed the proportionate approach described in Mex Group Worldwide Ltd v Ford [2024] EWCA Civ 959 and Tugushev v Orlov [2019] EWHC 2031 (Comm).
3. A disputed allegation may itself be a material fact requiring disclosure. The court will ordinarily refuse to resolve the underlying dispute on a discharge application where that would create a preliminary trial. If the judge’s decision rested solely on the fact that the allegation was disputed, that would be an error where the allegation was otherwise properly disclosable. A defendant must identify the alleged failures clearly; trivial or scattergun complaints will not establish material non-disclosure.
4. Materiality was assessed by reference to the case advanced at the without-notice hearing. The claimants had said that they were willing and able to repay approximately US$114 million for redemption of the collateral shares. That issue remained material despite later events or arguments concerning the sale of the shares and the nature of the loan.
5. Where willingness to pay is not in doubt, ability may be assessed by reference to funds and assets accessible indirectly through other entities. Where willingness is in doubt, the focus is on assets readily amenable to enforcement. Fortification must be considered at the without-notice stage by assessing realistic loss before the respondent has a reasonable opportunity to seek protection. Insufficient evidence of assets would normally result in fortification.
6. The evidence did not establish material non-disclosure. Disputed tax claims, press reports and the long-past SEC settlement did not show a want of probity or undermine the ability to pay. The evidence of substantial shareholdings and wider business interests adequately supported the asserted wealth. The injunctions therefore remained in place.

1. Court of Appeal (Civil Division): dismissed the appeal against the order dismissing the discharge application.
2. High Court of Justice, Commercial Court: Mr Justice Calver rejected the six alleged failures of disclosure and dismissed the discharge application: [2024] EWHC 2522 (Comm) .