Back on the right course: Privy Council rules on The Siskina
The eagerly awaited Privy Council full board decision in Convoy Collateral Limited v Broad Idea International Limited et al was handed down on 4 October 2021 by the Appellate Committee. This was an appeal brought by Harneys on behalf of its client CCL seeking clarification on the law of freezing injunctions. A central part of the appeal was a direct challenge to the longstanding House of Lords authority commonly known asThe Siskina, which has been the leading authority on injunctions for the past 44 years.
In a groundbreaking decision, that will reverberate through the common law world for years to come, the Privy Council agreed with Harneys’ arguments and found that “… it is necessary to dispel the residual uncertainty emanating from The Siskina and to make it clear that the constraints on the power, and the exercise of the power, to grant freezing and other interim injunctions which were articulated in that case are not merely undesirable in modern day international commerce but legally unsound. The shades of The Siskina have haunted this area of the law for far too long and they should now finally be laid to rest.” A consideration of The Siskina was central to the question arising on the appeal of whether the 2010 BVI decision, commonly referred to as Black Swan, which created a common law stand-alone freezing injunction, was good law. The Eastern Caribbean Court of Appeal had overturned Black Swan in 2020, in reliance on the The Siskina, finding that absent a substantive cause of action issued in the BVI, there was no jurisdiction to grant injunctive relief in aid of foreign proceedings.
Through an examination of the evolution of injunctive relief, the Privy Council found that The Siskina had placed legally unsound constraints on the exercise of the power to grant freezing injunctions and therefore Black Swan was correctly decided and overruled the findings of the Court of Appeal on this issue.
The Privy Council’s decision alters the landscape with regard to the grant of freezing injunctions and now stands as the leading decision on injunctive relief in aid of foreign proceedings (whether stand-alone or not) and has clarified the freezing injunction jurisdiction, breaking it free from the often misunderstood and resulting narrow intellectual straitjacket that has plagued this relief since 1977.
BVI based Partner Jonathan Addo, who co-led the legal team with Hong Kong based Partner Julie Engwirda, commented: “Appearing before the Appellate Committee on this matter was a professional privilege. Success on these groundbreaking points demonstrates the intellect and rigour applied by our litigation team to this historically important case.”
Julie commented: “I am so proud of the legal team who have worked tirelessly on this for close to four years. We were convinced that the original BVI decision in Black Swan was correctly decided and overturning this common law jurisdiction through legislative interpretation was not in line with either the intent of the legislation or modern practice. That it took an Appeal to the Privy Council to confirm that such a common law power exists, despite legislative development, underscores the intricacies of this area of law.”
Andrew Thorp, Head of Litigation in the BVI, labelled the decision: “A victory for clarity and the modern approach to freezing orders and international asset tracing.”
For further information on the background to the law and the importance of the decision, read our analysis here.