The Siskina is 'laid to rest': groundbreaking decision on injunctive relief

The Privy Council has handed down an eagerly awaited landmark decision, which has significant implications for the law relating to freezing injunctions.

The “historically important” decision in Convoy Collateral Limited (CCL) v Broad Idea International Limited et al was handed down on 4 October.

CCL’s appeal case sought to clarify the law relating to freezing injunctions and directly challenged the longstanding authority on injunctions, commonly known as The Siskina – the leading authority on the subject for 44 years.

In 2010, a BVI decision, commonly referred to as Black Swan, created a common law stand-alone right to grant a freezing order in support of foreign proceedings.

However, in May 2020, the Eastern Caribbean Court of Appeal overturned Black Swan in reliance on the The Siskina. It found the BVI court had no jurisdiction to grant injunctive relief in aid of foreign proceedings where no cause of action exists, and the injunction is only being sought to preserve the assets beneficially owned by a party to the proceedings.

Earlier this week, the Privy Council overruled the Court of Appeal on this issue and found that where the BVI High Court has jurisdiction over a party, the court may grant a freezing injunction against that party to assist enforcement through the court’s process of a prospective (or existing) foreign judgment.

It found the Eastern Caribbean Court of Appeal was wrong to rule otherwise and said The Siskina had placed legally unsound constraints on the exercise of the power to grant freezing injunctions. As such, Black Swan had been correctly decided and the power of the court to grant such injunctions remains.

The Privy Council said: “… 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.”

The Privy Council’s decision is now the leading decision on injunctive relief in aid of foreign proceedings (stand-alone or not) and has clarified the law relating to freezing injunction jurisdiction.

Global firm, Harneys, acted for CCL. BVI-based partner, Jonathan Addo, co-led the team along with Hong Kong based partner, Julie Engwirda. Addo said: “Appearing before the Appellate Committee on this matter was a professional privilege. Success on these groundbreaking points demonstrates the intellect and rigour applied by the Harneys litigation team to this historically important case.”

Engwirda 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, Harneys’ head of litigation in the BVI, described the decision as “A victory for clarity and the modern approach to freezing orders and international asset tracing.”