Home Information Cases Itsalat International Co Ltd v Allied TC Plc & Ors (2009)

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Itsalat International Co Ltd v Allied TC Plc & Ors (2009)

Summary

The grant of a without notice freezing injunction on the basis of a real risk of asset dissipation had been correctly granted and allegations of material non-disclosure were manifestly unsustainable.

Facts

The third and fourth defendants (X and Y) applied to set aside a freezing order imposed against them in favour of the claimant company (C). The second defendant accountant (O) applied to strike out C's claim against him for alleged breaches of fiduciary duty. C, a company incorporated in Saudi Arabia, had brought a claim against X and Y, alleging that they had committed a substantial fraud against C. To that end, C had successfully applied for a without notice freezing injunction against X and Y on the basis that there was a real risk that those parties would seek to dissipate their assets, and for a search order against O. O had been employed as a company accountant for one of C's subsidiaries, a subsidiary that had been bought by C from X and Y and was, thereafter, controlled by X and Y. C alleged that O had been complicit in X and Y's fraudulent activities and had, as a result, breached fiduciary obligations owed to C. C and its subsidiary company also applied for permission to amend the Particulars of Claim so as to make further claims against O. X and Y submitted that C had obtained its freezing injunction on the basis of a number of material non-disclosures. O argued that the claim against him was misguided and should be struck out on the basis that he had never been employed by C and could not, as a result, owe it a fiduciary duty, he also contended that the search and freezing orders should be set aside as against him.

Held

(1) The allegation that C had failed in its obligation to provide the necessary disclosure to justify the imposition of a freezing injunction as against X and Y was, having regard to the evidence that had been ventilated before the judge, manifestly unsustainable, Brink's-MAT Ltd v Elcombe (1988) 1 WLR 1350 CA (Civ Div) applied. Even if that was wrong and there had been a material non-disclosure sufficient to raise a question about the sustainability of the basis upon which the injunction had been granted, C had plainly established that there was a real risk of asset dissipation sufficient to warrant, had it been necessary, a re-grant of such an injunction. (2) O had never been employed by C in any capacity; on that basis, C had no prospect of being successfully able to sustain a claim against O for breach of fiduciary duty. C's claims against O were struck out. The freezing and search orders were set aside as against O. (3) C and the subsidiary company's applications for permission to amend the Particulars of Claim so as to make further claims against O were refused.

First application refused, second application granted, third application refused

Chancery Division
Judge Pelling QC
Judgment date
14 May 2009
References

LTL 14/5/2009