Home Information Cases Harley Street Capital v Tchigirinsky & Ors (2005)

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Harley Street Capital v Tchigirinsky & Ors (2005)

Summary

The defendants had not disclosed a sufficient risk of loss during the relevant period to justify the fortification of a cross-undertaking from a claimant who had obtained a freezing injunction against them.

Facts

The first, third and fourth defendants applied for the fortification of a cross-undertaking in damages and for the provision of further information. The fourth defendant company (D) was involved in oil exploration and production in Russia. The first defendant (X) was the indirect beneficial owner of 43 per cent of D through the third defendant (C). The claimant company (H) acquired 200 shares in D. H had applied for permission to bring a derivative action against the defendants alleging fraud. Prior to the hearing of the application H had obtained a without notice freezing injunction restraining X, B and C from dealing with shares in C and D, which injunction was supported by a cross-undertaking in damages of £25,000 fortified by a bank guarantee. X, C and D sought an uplift in the fortification to £10 million and sought the disclosure of the identities of the officers and members of H. X, C and D argued that (1) the grant of the injunction and its publicity had caused D's share price to drop by over seven per cent, which was greater than the general fall in the market, representing a recoverable loss and (2) the information sought was necessary to its application under CPR Part 19.

Held

(1) X, C and D had not disclosed sufficient risk of loss during the relevant period to justify fortification, Sinclair Investment Holdings SA v Carlton Ellington Cushnie (2004) EWHC 218 (Ch) applied. (2) The disclosure of the identity of the stakeholders and funders was plainly relevant to the main issue that would arise under the CPR 19 application. The information requested was to be disclosed to the defendants' solicitors on terms that it would not go beyond the defendants' legal team.

Application granted in part.

Chancery Division
Michael Briggs QC
Judgment date
24 May 2005
References

​LTL 24/5/2005