Blake Morgan LLP act as Privy Council agents for Emmerson International Corporation in successful appeal

Blake Morgan recently acted for Emmerson International Corporation, the successful appellant in an important Privy Council case which considered what constitutes an injunction.

In a dispute relating to various power generation and distribution assets in Russia, an issue of legal procedure arose concerning whether or not Emmerson (a BVI-registered company) needed permission to appeal against a particular order. It was a particular question of British Virgin Islands’ legislation, but was more widely important because, in order to answer it, the Privy Council had to grapple with the issue of what an “injunction” is.

A freezing order had been made by the first instance court. As well as the operative provisions freezing assets, the order contained disclosure obligations. A later order varied the disclosure provisions of the first order. The procedure rules stated that an appeal against the second order would not need the Court’s permission if, among other things, it was an “injunction”.

It was accepted on both sides that parts of the freezing order constituted injunction, but Renova argued that the disclosure provisions did not constitute an injunction.

The Privy Council agreed with Emmerson that “the disclosure provisions, as varied by the variation order, are an inherent and non-severable part of that order.”

Disclosure obligations are often vital elements of freezing orders, because the freezing order cannot be fully effective if the Respondent is not required to provide information about the assets to be frozen. Further, it would be impractical for parties to have to review an order on a line-by-line basis and consider whether each provision is or is not an injunction.

Emmerson was therefore successful in the appeal.

The Privy Council also concluded that they did not need to decide whether the disclosure obligations in the second order constituted an injunction in and of themselves, and so that argument is left open for another occasion.