Ciright Inc v Centili Group Limited

An interim proprietary injunction requires a serious issue to be tried. The court should leave disputed evidence and difficult legal questions for trial, assess the adequacy of damages for both parties, and then weigh convenience where either remedy is doubtful. Once the balance of convenience favours an injunction, it is very unlikely that granting it would not also be just and convenient. Material non-disclosure ordinarily starts from discharge, even if the order would otherwise have been made, but the court may continue relief where the interests of justice require it. Fortification requires an intelligent estimate of likely loss, a sufficient risk of loss and a causal link to the injunction; speculative estimates alone are insufficient.

Ciright claimed that approximately US$3.9 million transferred to Centili was held on bare trust and repayable on demand. Centili said the money was advanced under an existing facility agreement and was not repayable until January 2027. After an interim proprietary injunction was granted without notice by Bacon J, Ciright sought its continuation and Centili sought discharge. The court also considered whether Ciright had failed in its duty of full and frank disclosure and whether its undertaking in damages should be fortified.

1. Disposition. The interim proprietary injunction was continued until trial. Centili’s application for fortification of Ciright’s undertaking in damages was dismissed. Costs were left for short further submissions.
2. Injunction principles. Applying American Cyanamid v Ethicon [1975] AC 396, the court did not resolve conflicting witness accounts or difficult questions about the agreements at this interim stage. The competing accounts of the January 2026 transfer, the surrounding documents and the parties’ subsequent conduct raised a serious issue to be tried. Damages would not adequately protect either party in the relevant alternative outcomes, so the court assessed the balance of convenience. It favoured preserving the fund: Centili had not expected or requested the large transfer, and its evidence of attempts to obtain replacement funding was limited. The court also accepted that the separate requirement that relief be just and convenient was very unlikely to defeat an injunction once the balance of convenience favoured it, following Madoff Securities International v Raven [2011] EWHC 3102 (Comm).
3. Full and frank disclosure. Ciright should have told Bacon J that its case was that the facility had been drawn down through the provision of technology rather than cash. The omission materially misled the judge about whether Ciright had previously advanced a further $3 million in cash. The failure was not deliberate, and the facility had not yet become Centili’s central defence. The starting point after material non-disclosure was discharge, even if the injunction would otherwise have been granted. However, the court continued it in the interests of justice, having regard to the limited prominence of the omitted point at the first hearing, the absence of deliberate concealment and the risk of injustice if Centili could use the fund. The breach would instead be marked by a penal costs order.
4. Fortification. Following Jirehouse Capital v Beller [2008] EWHC 725 (Ch), fortification requires an intelligent estimate of likely loss, a sufficient risk of loss and a causal link to the injunction. Centili’s claimed annual loss of $6 million was speculative, and it had not adequately evidenced its efforts to obtain other working capital. The sums it would otherwise have to repay Ciright also provided substantial security against liability under the undertaking.

Bacon J granted an interim proprietary injunction on 31 March 2026. On the return application, this court continued it until trial and left costs for further submissions.