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Commercial disputes, Banking and financial services, Civil fraud and asset recovery, Insolvency, International / offshoreThursday 9 June 2022

Raiffeisen Bank part 1: Cayman Court of Appeal upholds €153m worldwide freezing injunctions

  1. On 30 December 2021 the Cayman Islands’ Court of Appeal (“CICA”) handed down judgment following a two-day appeal heard in September 2021 concerning two worldwide freezing and notification injunctions granted by Parker J in May 2020. The two appellants, Scully Royalty Limited and one of its subsidiaries, appealed on seven grounds, including as to whether a good arguable case had been established against them by the respondent Raiffeisen Bank International AG (“RBI”), whether a real risk of dissipation had been established, and whether the injunctions (which had been granted by Parker J in unlimited form) should have been ‘capped’ at a maximum sum.
  2. The background to the judgment below, RBI’s claims and the causes of action upon which it relies under the Cayman Islands’ Fraudulent Dispositions Act (“FDA”) and in conspiracy are set out here.
  3. The sole reasoned judgment of the CICA was given by Birt JA, with whom Morrison and Moses JJA agreed at paragraphs 213-4. The 80-page judgment can be found in full here.  Perhaps the most notable findings are as follows:
  4. First, the CICA tightened the approach for fresh evidence on appeal. The CICA overturned its previous decision in Columbraria v. Beteta [2000] CILR Note 2 as to the approach where a party seeks to rely on fresh evidence in an appeal of an interlocutory matter (such as a freezing injunction).  Going forwards, the principles set out in Ladd v. Marshall [1954] 1 W.L.R. 1489 at 1491, whilst not a jurisdictional gateway, should be considered by the CICA when any such application is made in an appeal following trial or of an interlocutory matter.  This is considered across paragraphs 27 to 45 and see esp. paragraphs 32 to 42.
  5. Second, the CICA gave guidance as to when it would be appropriate to include no maximum sum, and (relatedly, on the facts of this appeal, as to the amount of the maximum sum) as to the proper interpretation of the FDA, s6. Parker J held below that the circumstances of the case were sufficiently exceptional, by analogy to the decision of the English Court of Appeal in London & Quadrant v. Prestige [2013] EWCA Civ 130, to justify a departure from the usual practice that a freezing order should be capped. The CICA accepted that an uncapped order could be justified on rare occasions where there were exceptional reasons but ultimately overturned the Judge and imposed a €153m cap; distinguishing the present case from the facts in London & Quadrant.  In setting the cap at €153m, the CICA accepted that RBI had established at least a good arguable case that its claim under the FDA was not limited to the sums owed to it, but to those owed to all creditors: see paragraphs 197 to 212, esp. 199 to 204.
  6. Third, the CICA clarified the requirement for a cause of action. As Ground 6 of the appeal, the CICA considered whether it could be said that RBI had a cause of action against the appellants in circumstances in which both of the causes of action on which RBI relied turned on a matter that was the subject of a foreign arbitration.  The CICA determined the point primarily from first principles, holding this did not affect that RBI had causes of action against both appellants under the FDA and in conspiracy (paragraphs 167-181).  The point also involved an early application of the recent decision of the majority of the Privy Council in Broad Idea v. Convoy [2021] UKPC 24; handed down shortly after the oral hearing.  The CICA held that had it felt unable to distinguish the authority on which the appellants relied, it would have followed the reasoning in Broad Idea to the effect that those authorities (namely Steamship Mutual v. Thakur [1986] 2 Lloyd’s Rep 439 and The Veracruz 1 [1992] 1 Lloyd’s Rep 353) should no longer be followed on this point (paragraphs 182-184).
  7. The judgment also considered and contains a helpful summary of the principles (following a number of recent English decisions) as to the threshold to establish a good arguable case on the merits (paragraphs 47-57) and a real risk of dissipation (paragraphs 153-162), and as to how each of those is to be approached on an appeal (see the same respective references). In both instances the CICA held this was a case in which it should reconsider the matter and exercise its own judgment as to whether the respective threshold had been met, although the appeal was ultimately dismissed on all of these grounds (paragraphs 59 to 152 and 163 to 166).

Tim Penny KC, Jamie Holmes and Caspar Bartscherer acted with Ogier and Mishcon de Reya for RBI.  John Wardell KC and Jia Wei Lee acted with Mourant and LK Law for the appellants.


The views expressed in this material are those of the individual author(s) and do not necessarily reflect the views of Wilberforce Chambers or its members. This material is provided free of charge by Wilberforce Chambers for general information only and is not intended to provide legal advice. No responsibility for any consequences of relying on this as legal advice is assumed by the author or the publisher; if you are not a solicitor, you are strongly advised to obtain specific advice from a lawyer. The contents of this material must not be reproduced without the consent of the author.

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