High Court continues $3.9m proprietary injunction in Ciright v Centili despite disclosure failure

The High Court has continued a proprietary injunction restraining Centili Group Limited from dealing with approximately US$3.9 million transferred to it by Ciright Inc, notwithstanding a finding that Ciright had failed to give full and frank disclosure at the without notice hearing at which the injunction was first granted.

In Ciright Inc v Centili Group Limited [2026] EWHC 1865 (Ch), Mr David Rees KC, sitting as a Deputy Judge, considered competing applications by the two technology companies over funds transferred into Centili's bank account in January 2026. Ciright, a Pennsylvania-incorporated cloud software provider, contended the money was held on bare trust following a telephone conversation between its chief executive, Joseph Callahan, and Centili's founder, Courtney Javarone. Centili, an English mobile payments company, argued the funds represented a drawdown under a pre-existing facility agreement not due for repayment until January 2027.

The dispute arose against a backdrop of earlier commercial dealings, including a facility agreement and a software licence agreement entered into in January 2025, and a subsequent disagreement over whether various cash transfers fell within those arrangements. An interim proprietary injunction had been granted by Bacon J on a short notice basis on 31 March 2026, and Centili subsequently applied for its discharge, alongside applications for relief from sanctions, fortification of Ciright's cross undertaking in damages, and confidentiality orders.

Applying the American Cyanamid framework, the deputy judge found there was clearly a serious issue to be tried. He declined to treat Ciright's case as implausible, noting the absence of clear contemporaneous documentation, the ambiguous language used by both sides in their communications, and Centili's failure to assert reliance on the facility agreement until more than a week after the injunction was granted. He also concluded that damages would not adequately compensate either party, though he found the balance of convenience favoured continuing the injunction, given that the disputed funds appeared to represent an unanticipated windfall to Centili and that Centili had produced limited evidence of alternative funding sources.

The judgement addressed at length Centili's argument that Ciright had breached its duty of full and frank disclosure before Bacon J. The deputy judge rejected most of the eight grounds advanced, including arguments concerning Ciright's alleged wider campaign against Centili, on the basis that these matters had not been articulated at the time of the original hearing. However, he found that Ciright had failed to explain to Bacon J that, on its case, the facility agreement had been drawn down through the provision of technology rather than cash, leaving the judge with a materially incorrect impression. Applying the principles set out by Carr J in Tugushev v Orlov, he held that while the default position on such a finding is discharge of the injunction, the interests of justice justified its continuation here, with the non-disclosure instead to be marked through a costs sanction, provisionally indicating Ciright should bear its own costs and contribute to Centili's.

Centili's application for fortification of Ciright's undertaking in damages was dismissed. The deputy judge found the $6 million loss estimate advanced by Centili to be speculative and unsupported by evidence, and noted that Centili retained substantial security in the form of sums it would in any event be liable to repay to Ciright.

The proprietary injunction will therefore continue until trial, with the parties to make further submissions on the precise costs order arising from the disclosure finding.