Mex Group Worldwide Ltd v Ford [2024] EWCA Civ 959: Freezing Injunctions and the Need for a Jurisdictional Link

Executive Summary

In Mex Group Worldwide Ltd v Ford, the Court of Appeal upheld a decision to set aside a worldwide freezing order obtained without notice under section 25 of the Civil Jurisdiction and Judgments Act 1982. The substantive proceedings were in Scotland, where the claimant alleged conspiracy against the defendants. Although the court acknowledged evidence of a risk of dissipation of assets, it found that the freezing injunction was improperly granted due to the absence of a sufficient jurisdictional link to England. The ruling reinforces the principle that injunctive relief requires a meaningful connection to the English court’s territorial jurisdiction.

The court also clarified the approach to setting aside freezing orders based on failures of full and frank disclosure. It warned against excessive allegations of non-disclosure and emphasized that only material omissions should be considered.

The Factual Background

Mex Group Worldwide Ltd obtained a worldwide freezing order against the respondents on an ex parte basis, arguing that there was a real risk that they would dissipate their assets to frustrate enforcement of any judgment obtained in Scotland. The application was made under section 25 of the Civil Jurisdiction and Judgments Act 1982, which allows English courts to grant interim relief in support of proceedings in other jurisdictions.

The respondents successfully applied to set aside the order, contending that there was no sufficient jurisdictional basis for the injunction. The claimants appealed, maintaining that the risk of asset dissipation justified the order and that the requirements under section 25 were met.

The case turned on whether there was a requisite territorial connection to England, and whether the claimants had provided full and frank disclosure when obtaining the injunction.

The Law

1. Jurisdictional Requirement for Freezing Injunctions The Court of Appeal reaffirmed that for a freezing injunction to be granted under section 25 of the Civil Jurisdiction and Judgments Act 1982, there must be a substantive connection with England. The requirement stems from both domestic and retained EU law, meaning that Brexit did not alter this fundamental principle.
2. Full and Frank Disclosure in Ex Parte Applications The court provided guidance on setting aside freezing orders where full and frank disclosure is in question. It warned against lengthy lists of alleged disclosure failures, stating that only material omissions should be considered.
3. No Special Treatment for UK Proceedings Outside England The court rejected the argument that a different standard should apply simply because the main proceedings were in Scotland rather than outside the UK. A jurisdictional link with England remained necessary.

The Court’s Decision

1. Setting Aside the Freezing Order The Court of Appeal upheld the decision to discharge the worldwide freezing order. While it acknowledged that the respondents posed a risk of asset dissipation, the lack of a sufficient jurisdictional link to England made granting injunctive relief inappropriate.
2. Guidance on Full and Frank Disclosure The court emphasized that challenges to freezing injunctions should focus on material non-disclosure rather than exhaustive lists of minor omissions.
3. Implications for Cross-Border UK Litigation The ruling confirmed that the principles governing freezing injunctions apply uniformly whether the main proceedings are in Scotland or another foreign jurisdiction. The requirement for a jurisdictional link remains paramount.

Takeaway

Summit Law Solicitor and Partner, Jeremy Boyle comments:

This case serves as a crucial reminder that obtaining a freezing injunction in England requires a meaningful connection to the jurisdiction. Even if a party can show a risk of dissipation, courts will not grant relief without a sufficient territorial nexus. The ruling also underscores the importance of full and frank disclosure in ex parte applications—applicants should focus on the most material aspects rather than overwhelming the court with excessive allegations.

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