Freezing injunctions and contribution claims

A nice point about freezing injunctions in the High Court today, in which Leggatt J provided some joy for honest but hard-pressed litigants. Kazakhstan Kagazy (KK), a British company with big interests in paper & recycling in Kazakhstan, sued a number of its subsidiaries’ employees, including A and Z, for dishonestly siphoning off something over $100 million to themselves and their chums in Central Asia (the serious litigation is booked for next year). KK settled with Z for what one suspects was a tidy sum plus an agreement to co-operate in chasing the other defendants. Proceedings against Z were duly stayed.

A issued a Pt 20 notice claiming contribution from Z in the event that he was held liable to KK. As an adjunct he also sought a freezing injunction against Z. In fact the contribution notice was bad for other reasons, but Z also raised an interesting argument on the freezing injunction. According to The Veracruz [1992] 1 Lloyd’s Rep 353, there can be no freezing injunction until you have a right against the defendant: it won’t do to say, however convincingly, that you almost certainly will have a right next week and that there won’t then be a cat in hell’s chance of making it good if the defendant can hide his assets. Well then, said Z: this must protect me. Any right A may have against me for contribution will arise only when A has been sued by, or settled with, KK; until then there is no right but merely the prospect of one.

Apparently logical: but if correct, this would effectively mean that freezing injunctions would be a dead letter in contribution claims. Leggatt J was having none of it. To get freezing relief, he said, all you needed was to have the ability to bring proceedings which wouldn’t automatically be struck out. Since you can Part 20 a third party as soon as you are sued, and indeed A had done just that, it followed that had the  contribution notice been good, there could have been an asset-freeze. As I say, much relief for hard-pressed litigants.

See Kazakhstan Kagazy Plc v Zhunus & Ors [2016] EWHC 1048 (Comm), available on BAILII.

Andrew Tettenborn

 

Oil and Nigeria. Two new cases.

  1. In Federal Republic of Nigeria v MT Asteris (Charge FHC/L/239c/2015) the Federal High Court convicted a vessel and its crew of charges that included conspiracy to deal, dealing with, attempting to export and storing crude oil without lawful authority or a licence. The vessel had been arrested while drifting in Nigeria’s exclusive economic zone and Lloyds List data showed that the vessel had been trading in Nigeria. The vessel had 3,423.097 metric tons of petroleum products on board but no documents confirming their origin.
  2. Following Shell’s £55m settlement of an oil spill claim in the Bodo community in Nigeria, two new claims have been filed against Shell in the High Court by London solicitors, Leigh Day, in respect of spills in the Ogale and Bille communities.In the Ogale action, it is alleged that leaks are due to pipelines and infrastructure being several decades old and in a poor state of repair. In 2011 the United Nations Environmental Programme (UNEP) published an Environmental Assessment of Ogoniland which included extensive testing of the Ogale Community. UNEP’s recommended: (i) Emergency measures to provide adequate sources of drinking water to impacted households; (ii) Immediate steps to prevent existing contaminated sites from causing further pollution and; (iii) A substantial programme of clean up and decontamination of impacted sites. It is alleged that Shell has failed to comply with the recommendations of the UNEP Report and to clean up the sites polluted by their oil.In the Bille action it is alleged that creeks, mangroves and island communities have been devastated by oil leaks since the replacement of the Bille Section of the pipeline in 2010. The key issue in the claim will be whether Shell can be liable for failing to protect their pipelines from damage caused by third parties.On 2 March 2016 at the Technology and Construction Court, His Honour Judge Raeside QC, ruled that formal legal proceedings against Shell can now be served on Shell Nigeria (the Shell Petroleum Development Company of Nigeria Ltd) who will be joined to the English proceedings alongside Royal Dutch Shell plc.

New book published by IISTL Member

A new book for a new year!

 

Human Rights and Corporate wrongs

This monograph on transnational human rights litigation against multi-national corporations in the US and the UK has now been published by Edward Elgar Ltd. For further details go to:

Contents:

1. Corporations and International Law

2. Suing in the US (1). Jurisdiction

3. Suing in the US (2). The Alien Tort
Statute 1789 and Statutory Causes of Action

4. The ‘Law of Nations’ as a Cause of Action in the US

5. Tort Caims Against MNCs in the US

6. Tort Claims Against TNCs in the UK

7. Customary International Law as a Cause of Action Outside the US

8. Voluntary Codes and the UN Guiding Principles

Conclusion

Index
304 pp Hardback 978 0 85793 475 8
Dec 2015 £80.00 (UK/RoW) • Feb 2016 $125.00 (N/S America)
Elgaronline 978 0 85793 476 5
Corporations, Globalisation and the Law series