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Offshore Cases

Privy Council Issues Landmark Decision on Freezing Injunction Jurisdiction

December 2021 Appeal

In Convoy Collateral Ltd v Broad Idea International Ltd and Cho Kwai Chee [2021] UKPC 24, the majority judgment of Lord Leggatt in the Privy Council upheld the decision in Black Swan, overruling the Eastern Caribbean Court of Appeal, and decided that it was finally time to move on from The Siskina1. However, from a Bermuda perspective, while this clarification is welcome, issues remain regarding service of defendants outside the jurisdiction.

The applications for injunctive relief

Convoy brought proceedings in Hong Kong, claiming damages and other relief against Dr Cho, a Hong Kong resident, as well as other defendants not including Broad Idea. In the British Virgin Islands (BVI) Convoy applied separately for freezing injunctions against Dr Cho and against Broad Idea, a company located in the BVI.

As against Dr Cho, the obstacle facing Convoy was to identify a provision in the procedural rules of the BVI under which permission may be given to serve a claim form outside the territorial jurisdiction of the court, where the only relief claimed is a freezing injunction. The relevant rules in the BVI were in similar terms to those in Bermuda’ RSC 1985 and allowed service out where: “a claim is made…for an injunction ordering the defendant to do or refrain from doing some act within the jurisdiction.2

The Board decided that it was long-settled that the term “injunction” in the rule could only refer to an injunction as final substantive relief for the invasion of a legal or equitable right of the plaintiff and did not include a freezing injunction or other interlocutory injunction. Accordingly, the Board upheld the decision of the courts below that Dr Cho could not be brought within the jurisdiction of the BVI court by serving him abroad.

This question did not arise in relation to Broad Idea, which was located in the BVI and thereby amendable to personal service. The Board had to decide whether the Court of Appeal was right to overturn Black Swan. While there undoubtedly was personal jurisdiction over Broad Idea, no substantive proceedings had been brought against Broad Idea in the BVI. The purpose of the application of an interim freezing injunction was to support the claim in Hong Kong. Given the absence of a claim against Broad Idea in the BVI, was it right for the BVI court to grant the injunction sought?

 

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Privy Council Issues Landmark Decision on Freezing Injunction Jurisdiction

 

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