This judgment was handed down remotely at 10.30am on [date] by circulation to the parties or their representatives by e-mail and by release to the National Archives.
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MR JUSTICE RICHARDS
Mr Justice Richards:
- Two groups of claimants (together the Claimants) have brought proceedings against the First Defendant (Professor Tripathi) and the Second Defendant (Ms Kent) alleging deceit. Those claims concern, in the first instance, the Claimants' purchase of shares from Ms Kent in a company called Signifier Medical Technologies Ltd (SMT) in 2020 and 2021. Professor Tripathi is the co-founder of SMT and was previously its CEO.
- Very broadly, the Claimants allege that prior to those sales, Professor Tripathi and Ms Kent made representations to the effect that (i) Ms Kent was the beneficial owner of the shares and/or would be the ultimate recipient of the sale proceeds and (ii) Ms Kent was selling the shares for personal and family reasons including a divorce and an expected child that meant she needed money at reasonably short notice.
- Those representations, say the Claimants, were significant for at least two reasons. First, they were induced to believe that Ms Kent was selling her shares in a "fire sale" and were being offered an advantageous price. Second, there was a material distinction between Ms Kent and Professor Tripathi being the ultimate recipient or beneficial owner of the sale proceeds. If they had known that the then CEO of SMT was effectively cashing out a large holding of shares, the Claimants say they would have asked whether that was indicative of some problems or difficulties at SMT of which Professor Tripathi was aware but they were not. Since they were told that Ms Kent was the ultimate recipient of the proceeds, they were not put on notice that such questions should be asked and instead were deflected from asking those questions by representations concerning Ms Kent's short-term need for cash.
- Although the representations were given in the context of a sale of shares by Ms Kent, the Claimants say that they also operated to induce them to make further investments in SMT (the Series D Investments and Series E Investments).
- In their substantive claims, the Claimants seek rescission of the contracts by which they acquired shares in SMT, and so seek restitution of the proceeds of sale (the Sale Proceeds). They also seek damages.
- It is now common ground that Professor Tripathi has received a good proportion of the Sale Proceeds or assets into which they can be traced. The Claimants have secured worldwide freezing orders and proprietary injunctions (together the WFOs) against Professor Tripathi. The proprietary aspect of the WFOs seeks to freeze the Sale Proceeds and assets acquired with them on the basis that the Claimants have shown a sufficiently arguable case that these assets belong to them in view of their claim for rescission. The non-proprietary aspect of the WFOs precludes Professor Tripathi from disposing of or dealing with his assets.
- This is my judgment on three applications connected with the WFOs:
i) The Claimants' application of 8 November 2024 (the Tracing Application) for an order requiring Professor Tripathi to provide information and documents concerning alleged proprietary assets.
ii) The Claimants' application of 8 November 2024 (the HST Application) for an order requiring Professor Tripathi to give disclosure of documents concerning a trust (the Trust).
iii) Professor Tripathi's applications of 20 December 2024 (the Set Aside Application) (a) to set aside an order made by Master Clark on 9 October 2024 giving the Claimants permission to use certain information obtained in these proceedings for the purposes of legal proceedings in the British Virgin Islands (BVI) seeking a freezing injunction in relation to assets of JJE Properties Limited (JJE), a company that Professor Tripathi controls and (b) to take steps to discharge the injunction that they successfully obtained in the BVI.
- Since these proceedings are, in legal form, two different actions involving different sets of claimants, it is often the case that applications and orders made in one set of proceedings are mirrored in the other set. For example, what I have described as the Set Aside Application is in fact two separate applications made in the two distinct sets of proceedings. However, for convenience and as a shorthand, I will tend to elide these distinctions unless it is necessary to do otherwise.
The underlying allegations in more detail
- The Claimants' position is that all three applications with which I am concerned have to be considered against the backdrop of what they characterise as fundamentally misleading statements that Professor Tripathi has made throughout the proceedings. A good part of the oral submissions made on behalf of the Claimants were devoted to Professor Tripathi's alleged mendacity.
- Professor Tripathi is, of course, correct to submit that the applications are not for summary judgment nor a trial of his conduct of the litigation. However, the Claimants argue that they have an understandable lack of confidence in Professor Tripathi's willingness to provide truthful information to them which serves to explain their position on the applications that are before me. Since the Claimants put their case in that way, I will give a brief flavour of the allegations they make.
- The Claimants note that they are not the only ones who have taken legal action based on allegedly deceitful statements made by Professor Tripathi in connection with sales of SMT shares. In November 2023, Al Waha Capital PJSC (Al Waha) issued proceedings against Professor Tripathi and the trustee of the Trust (Highvern) relating to Al Waha's purchase of SMT shares from Highvern in 2022. The Claimants point to what they characterise as striking similarities between these proceedings and the Al Waha proceedings. The claimants in the Al Waha proceedings asserted that they were induced to purchase shares in SMT that were registered in the name of a Ms Pandey by Professor Tripathi's representations to the effect that Ms Pandey was a "friend" of his and an "early investor" in SMT who was selling her shares because she had a pressing need for money for personal reasons. As well as emphasising the similar representations that are said to have been made in this case, the Claimants assert that Professor Tripathi failed to tell the Al Waha purchasers that Ms Pandey was, in fact, his sister. They also assert that he failed to tell the Al Waha purchasers that he was a beneficiary of the Trust and so could be expected to have an interest in the proceeds of sale.
- The Al Waha litigation has been settled on terms that are confidential although the Claimants believe that the settlement was on terms that Al Waha was paid the full amount of its claim.
- The Claimants also point to Professor Tripathi's early response to their claims. On 6 October 2023, Professor Tripathi's solicitors, Mishcon de Reya, wrote to the Claimants' solicitors, Proskauer Rose, stating that, to the best of their knowledge, Ms Kent was the owner of the shares that she sold to the Claimants and that Professor Tripathi had not benefited directly or indirectly from the Sale Proceeds. The Claimants do not criticise Mishcon de Reya for this explanation as they assume that it was given following instructions from Professor Tripathi. However, they submit that Professor Tripathi must have known at the time that the confirmation was untrue since it is now common ground that of the Sale Proceeds of around USD 10.6m, Ms Kent retained just around USD 200,000 and paid the rest to Professor Tripathi in a series of transfers.
- The Claimants also express scepticism at Professor Tripathi's explanation of the large sums that Ms Kent transferred to him out of the Sale Proceeds. They say they were initially told that the money continued to belong to Ms Kent and that Professor Tripathi was going to help her to invest it advantageously using his access to sophisticated providers of wealth management services such as Goldman Sachs. The Claimants state unequivocally that they disbelieve that explanation. They argue that it is inconsistent with Professor Tripathi's lavish spending of sums transferred to him: for example, some USD 900,000 on American Express and several hundreds of thousands on a single yacht charter. They also say that, if the money truly did initially continue to belong to Ms Kent, Professor Tripathi would have been maintaining records as to what he did with that money and so would not suffer the difficulties that he claims to suffer in undertaking the tracing exercise required following the WFOs.
- The Claimants express similar disbelief of Professor Tripathi's explanation that, when Ms Kent's father died, she came into a large sum of money and was happy for the sums paid over to Professor Tripathi to be reclassified as loans. They characterise that explanation as untrue and as opportunistically relying on the death of Ms Kent's father. They also submit that even this rationalisation does not explain why Professor Tripathi was spending the money so lavishly in the period in which it was said to belong to Ms Kent.
- As I have noted, I make no determination as to whether Professor Tripathi has told the truth about the circumstances in which he received money from Ms Kent. That is a matter for trial. I conclude only that the Claimants genuinely believe that information and explanations that they have received from Professor Tripathi are not just wrong, but the result of calculated deceit. There is a rational basis for the Claimants' belief.
- The Claimants also point to what they characterise as inaccurate and misleading information that they have received from Professor Tripathi as part of the process by which he performed the tracing analysis required by the WFOs. Professor Tripathi accepts that there has been the occasional mistake in that analysis but submits that to be inevitable given the scale of the exercise he has to undertake. Professor Tripathi also argues that some of the allegations of non-disclosure that the Claimants advance are positively misconceived.
The WFOs
- For reasons that I have given in paragraph 8, there are two sets of WFOs. The claimants in BL-2024-000036 (the 036 Claimants) obtained a WFO on 17 January 2024 on a without notice basis from HHJ Jarman KC, sitting as a judge of the High Court (the Jarman Injunction). Claimants in BL-2024-000401 (the 401 Claimants) obtained a without notice injunction on 25 March 2024 from Mr Nicholas Thompsell, who is now Thompsell J, but was then sitting as a deputy judge of the High Court (the Thompsell Injunction).
- Professor Tripathi did not seek to set aside or vary either the Jarman Injunction or the Thompsell Injunction. Both injunctions have been ordered to continue until trial or further order. While there are some differences between the Jarman Injunction and the Thompsell Injunction, as both were varied by various interlocutory orders along the way, it is common ground that the differences are not significant for the purposes of the present applications. I therefore take the text of the provisions below from the Thompsell Injunction.
- As will be seen from the discussion below, the parties are far from agreed on the correct construction of various provisions of the WFOs. Neither side referred me to authorities setting out general propositions on the construction of orders, though I have in mind my own judgment in Banca Generali v CFE (Suisse) SA and others [2023] EWHC 323 (Ch). Both the Claimants' and Professor Tripathi's submissions proceeded on the premise that the WFOs contain provisions in largely "standard" form so that previous authorities on the meaning of similar standard form provisions in different orders can determine what the WFOs themselves mean. I was shown no authority for that proposition. However, since the parties' common assumption strikes me as sensible I will proceed on the same basis.
- The central prohibition in the WFOs is set out in paragraphs 4 to 6 of the Thompsell Injunction which provides, so far as material, as follows:
4. Until the Return Date or further order of the Court, the Respondent [i.e. Professor Tripathi] must not:
(a) in any way dispose of or deal with any proceeds of sale received by the Respondent following the sale of shares in Signifier Medical Technologies Limited, registered to Ms Silvie Kent, to the Applicants in 2020 or 2021 (the "Sale Proceeds");
(b) in any way dispose of, deal with, or diminish the value of any investments or other assets acquired with the Sale Proceeds;
(c) remove from England and Wales any of his assets which are in England and Wales up to the value of £14,318,731.36 (the "Injuncted Sum") … or
(d) in any way dispose of, deal with or diminish the value of any of his assets whether they are in or outside England and Wales up to the same value.
5. Paragraph 4 applies to all the Respondent's assets whether or not they are in his own name and whether they are solely or jointly owned. For the purpose of this order the Respondent's assets include any asset which he has the power, directly or indirectly, to dispose of or deal with as if it were his own. The Respondent is to be regarded as having such power if a third party holds or controls the asset in accordance with his direct or indirect instructions.
6. The prohibition at sub-paragraphs 4(c) and 4(d) above includes the following assets in particular:
(a) shares or any other interest held by the Respondent in [JJE];
(b) the property known as [the Property] or the net sale money after payment of any mortgages if it has been sold;…
- Some salient points arising from these provisions are as follows:
i) The "Injuncted Sum" is intended to be a proxy for the total pleaded and quantified claims of both the 036 Claimants and the 401 Claimants. It does not include sums that two of the 401 Claimants (in their trustee capacity) invested as part of the Series E Investment as neither Thompsell J nor David Bailey KC (sitting as a judge of the High Court) was satisfied that the claim in that regard was sufficiently arguable. The Injuncted Sum does not include elements of the Claimants' claims (for example lost investment opportunity) that have not been quantified to date.
ii) Paragraph 5 is in the usual standard form. In appropriate cases, the first sentence of paragraph 5 is supplemented by the words "…and whether the Respondent is interested in them legally, beneficially or otherwise" (see, for example JSC BTA Bank v Kythreotis [2011] 1 WLR 888). That "Kythreotis wording" does not appear in the Thompsell Injunction or any of the other WFOs.
iii) Even though the Kythreotis wording is not included, paragraph 5 of the Thompsell Injunction nevertheless extends the concept of the "Respondent's assets" beyond the ordinary meaning of that term (the Extended Definition).
iv) The property referred to in paragraph 6(b) (the Property) is a substantial and valuable property in London which Professor Tripathi occupies as a family home. Professor Tripathi does not himself own the Property. Rather, the registered proprietor of the Property is JJE. Professor Tripathi is the sole shareholder in JJE. JJE has two corporate directors that are incorporated in Jersey. The parties do not agree on whether the Property falls to be treated as an "asset" of Professor Tripathi by virtue of the Extended Definition.
v) The Property is thus, by paragraph 6(b) specifically made subject to the prohibitions in paragraphs 4(c) and 4(d) even though it is an "asset" of JJE rather than of Professor Tripathi in the ordinary sense of the word (ignoring the disputed effect of the Extended Definition). However, the parties did not agree on the effect of this treatment in circumstances where paragraphs 4(c) and 4(d) impose restrictions on Professor Tripathi's ability to deal with the Property, without apparently restricting JJE's ability to do so.
- Paragraphs 8, 9 and 12 contain relaxations of the prohibitions in paragraph 4:
8. If the total combined value free of charges or other securities ("Unencumbered Value") of the Sale Proceeds, and any investments or other assets acquired with the Sale Proceeds (the "Traceable Assets") and the Respondent's assets in England and Wales exceeds the Injuncted Sum, the Respondent may remove any of those assets from England and Wales (other than the Sale Proceeds or the Traceable Assets) or may dispose of or deal with them so long as the total Unencumbered Value of the Respondent's assets still in England and Wales remains above the Injuncted Sum.
9. If the total unencumbered value of the Respondent's assets in England and Wales does not exceed the Injuncted Sum, the Respondent must not remove any of those assets from England and Wales and must not dispose of or deal with any of them. If the Respondent has other assets outside England and Wales, he may dispose of or deal with those assets (other than the Sale Proceeds and the Traceable Assets) outside England and Wales so long as the total unencumbered value of all his assets whether in or outside England and Wales remains above the Injuncted Sum…
12. This order does not prohibit the Respondent from spending £5,000 a week towards his ordinary living expenses and also a reasonable sum on legal advice and representation. But before spending any money the Respondent must tell the Applicants' legal representatives where the money is to come from. For the avoidance of doubt:
a) This paragraph does not apply to the Sale Proceeds and/or any investments or other assets acquired with the sale proceeds…
- Some salient features of these provisions are as follows:
i) The above provisions treat Sale Proceeds and "Traceable Assets" bought with Sale Proceeds differently from other assets. That is because the injunction restricting Professor Tripathi from dealing with Sale Proceeds is proprietary in nature reflecting the Claimants' case that the Sale Proceeds, and assets that represent them, currently belong to them in equity.
ii) By paragraph 9, the presence of "Respondent's assets" within England and Wales with an unencumbered value above the Injuncted Sum gives Professor Tripathi headroom to dispose of assets other than Sale Proceeds/Traceable Assets. Thus, if Professor Tripathi has unencumbered "Respondent's assets" within England and Wales of £15m (more than the Injuncted Sum) paragraph 8 permits him to dispose of assets (other than Sale Proceeds/Traceable Assets) to the value of £681,264.64. If he chose he could spend that sum on living expenses as the £5,000 limit in paragraph 12 applies only to expenditure that would otherwise involve a breach of the Thompsell Injunction.
iii) Paragraph 8 could perhaps be more clearly expressed, but the parties agree on one aspect of its interpretation. Very broadly, to the extent that Professor Tripathi holds Sale Proceeds/Traceable Assets, those sums operate as a "credit" against the Injuncted Sum and so give Professor Tripathi headroom to dispose of assets other than Sale Proceeds/Traceable Assets.
iv) In deciding whether paragraphs 8 or 9 afford Professor Tripathi headroom to dispose of assets in the manner set out in paragraph ii) or iii) above, the value of the "Respondent's assets" in England and Wales is important. The parties do not agree on whether the Property counts as a "Respondent's asset" for these purposes.
- Paragraph 10 of the Thompsell Injunction obliged Professor Tripathi to provide details of his assets. That was supplemented by a consent order (the Bailey Order) of David Bailey KC of 9 April 2024, sitting as a judge of the High Court, requiring Professor Tripathi to undertake a tracing analysis.
- Paragraphs 24 and 25 of the Thompsell Injunction contain standard provisions dealing with the effect of the order on persons outside England and Wales. It is common ground that these paragraphs mean that neither JJE nor its corporate directors are themselves bound by the WFOs.
- The Claimants argue that this means that they have little or no protection should JJE seek to dispose of the Property. They also express concern at the prospect of JJE or its directors undertaking manoeuvres involving JJE's share structure that could result in the economic value in JJE's shares being held by someone other than Professor Tripathi so that they are no longer frozen by the WFOs. It was concerns such as this that led to the Claimants seeking the freezing order in the BVI referred to in paragraph 7.iii).
- Paragraph 18 of the Thompsell Injunction provides that:
A Respondent who is an individual who is ordered not to do something must not do it himself or in any other way. He must not do it through others acting on his behalf or on his instructions or with his encouragement.
- Finally, so far as material for the purposes of the present applications, the Thompsell Injunction contained, in paragraph 7 of Schedule B, an undertaking by the Claimants inter alia, not to enforce the Thompsell Injunction in any country outside England and Wales. I refer to this as the Non Enforcement Undertaking without in any way prejudging the scope of that undertaking which is a matter of significant dispute.
The Property
Value and encumbrances
- I take judicial notice of a developing trend over the past 20 years or so for high value residential properties to be "enveloped" in special purpose companies with transfers of the benefit of those properties being effected by transfers of shares in the special purpose company rather than in the property itself. The development of this trend led Parliament to enact an "Annual Tax on Enveloped Dwellings" in 2013.
- The Property is such an enveloped dwelling. Professor Tripathi acquired the shares in JJE, which was the special purpose company holding the Property, for around £19m in 2022. I infer that was considered to be the market value of the Property at the time and this is borne out by a valuation prepared by Knight Frank on 3 September 2018.
- The register of title for the Property at HM Land Registry discloses no material encumbrances with the exception of some restrictive covenants and the restrictions described below which the Claimants have registered following the WFOs. The evidence filed in advance of the hearing suggested a disagreement about the current unencumbered value of the Property. However, that disagreement largely fizzled out and Mr Matthews KC confirmed that he does not seek to argue that the unencumbered value of the Property is materially less than Professor Tripathi asserts it to be. I will proceed on the basis that the Property has an unencumbered value of at least £19m (significantly more than the Injuncted Sum).
- After the WFOs were made, the Claimants registered two unilateral notices (a UN1) on the title to the Property (one for each set of Claimants) in the following terms:
Under an order of the High Court of Justice … no disposition by the proprietor of the registered estate is to be registered except with the consent of [two named individuals at the Claimants' solicitors] or under a further order of the Court.
- If JJE's only asset is the Property and it has no liabilities then the shares in JJE that Professor Tripathi holds would have an unencumbered value of at least £19m. However, I do not know whether JJE has other assets or liabilities. In addition, since 26 January 2024, there has been significant correspondence between the solicitors for the Claimants and Professor Tripathi as to whether the JJE shares truly are unencumbered.
- Professor Tripathi stated in an affidavit of 26 January 2024 that he and his lawyers were:
investigating whether an unsigned charge over the shares in [JJE] creates an interest in these shares. I did not disclose the existence of the unsigned charge in my original list of assets because I did not think that an unsigned charge had any legal value; however my lawyers have informed me that it is possible that an equitable interest has been created.
- Given the Claimants' mistrust of Professor Tripathi this caused them some concern. Considerable correspondence ensued. Eventually Professor Tripathi's solicitors confirmed that the shares in JJE were not subject to any third party equitable charge. However, a letter of 31 May 2024 set a further hare running by suggesting that the JJE shares might be subject to a "possible third party equitable claim". Eventually, Professor Tripathi confirmed in his Fifth Affidavit of 3 October 2024 that:
As at today's date, I am satisfied on advice, that the "possible third party equitable claim" … that is referred to in the 31 May 2024 Letter does not exist.
- It is simply not possible for me to decide at the present hearing whether or not the JJE shares are indeed encumbered by an equitable claim or charge. However, both sides appeared to be proceeding on the basis that the reason Professor Tripathi originally raised the possibility of an equitable claim was because it might be said that he had used the proceeds of sales of shares to Al Waha to fund his purchase of the JJE shares in 2022.
Effect of the Property being listed in paragraph 6 of the WFOs
- The Claimants' position is that there is virtually no significance to the fact that the Property is listed in paragraph 6 of the Thompsell Injunction. They submit that:
i) Although the Property is a substantial asset, it is owned by JJE, a company outside the jurisdiction, against whom the WFOs are not enforceable (see paragraph 26 above).
ii) The Property is not a "Respondent's asset", because (a) it is owned by JJE and not Professor Tripathi and (b) it does not fall within the scope of the Extended Definition (see paragraph 22.iv) above).
iii) Therefore, substantial though it is, the Property does not of itself provide Professor Tripathi with any headroom to effect disposals of assets (see paragraph 24.iv) above). If Professor Tripathi seeks such headroom, he will need to obtain it from assets other than the Property.
- I accept the proposition in paragraph 38.i). However, I accept it as a proposition of law which does not capture some practicalities. The Property, which Professor Tripathi occupies as a family home, is enveloped in JJE. Professor Tripathi paid £19 million to acquire the JJE shares. Logic and reason suggest that, as matters stand, JJE and its present directors will have a high level of regard to Professor Tripathi's wishes when exercising their functions as directors of JJE. That conclusion is supported by Professor Tripathi's statement in his affidavits of assets that he occupies the Property without being obliged to pay JJE rent. In those circumstances, I consider it unlikely that, as matters stand, JJE would decide to dispose of the Property if Professor Tripathi did not wish it to do so. If JJE had freedom of this kind, Professor Tripathi would scarcely have spent £19m to acquire those shares. Therefore, considerations of practical and economic reality suggest that, if JJE as currently owned by Professor Tripathi, and as managed by its current directors, sought to dispose of an interest in the Property, Professor Tripathi's involvement might be sufficient to result in a breach of the WFOs by him personally in the light of paragraph 18 of the Thompsell Injunction (see paragraph 28 above). In addition, even if JJE were minded to dispose of a registrable interest in the Property, the UN1 would restrict its practical ability to do so.
- That said, the way that Professor Tripathi has chosen to hold the Property means that economic interests in it could be disposed of in ways not available to people who hold property directly. Conceptually, the directors of JJE could be changed. Professor Tripathi's holding of shares in JJE could be diluted if shares are issued to others without necessarily involving any "disposal" of Professor Tripathi's existing holding. The law reports contain examples of situations in which companies have been "redomiciled" from one jurisdiction to another, at least allegedly as a means of circumventing freezing orders (see, for example Navigator Equities Limited v Deripaska [2023] EWHC 788 (Comm)). I make no suggestion that Professor Tripathi or JJE have in mind any manoeuvres to circumvent the WFOs, but it is not fanciful to suspect that some manoeuvres may be possible. Moreover, the UN1 does not itself provide any practical protection against JJE disposing of interests in the Property that do not require registration at HM Land Registry.
- The proposition in paragraph 38.ii) is supported by the judgment of the Court of Appeal in Lakatamia Shipping Co Ltd v Su [2015] 1 WLR 291 (Lakatamia Shipping). In that case, their Lordships were considering whether identical wording to the Extended Definition caught assets owned by companies which a defendant controlled, and of which he was the sole director. All three of their Lordships said not. Rimer LJ held at [51] that (i) even the Extended Definition is concerned only with assets beneficially held by a defendant and (ii) a controlling shareholder and sole director may well have the practical ability to procure the relevant company to deal with assets in a certain way but has no authority to instruct a company on how to do so.
- I do consider it possible that the correct interpretation of the Extended Definition has changed following the judgment of the Supreme Court in JSC BTA Bank v Ablyazov (No 10) [2015] 1 WLR 4754 (Ablayazov). Paragraph [49] of Lord Clarke's judgment suggests some disagreement with Rimer LJ's proposition (i) that I have set out in paragraph 41, although does not deal with proposition (ii). The editors of Gee on Commercial Injunctions (7th Edition) consider that the law has moved on since they write at 3-009:
Also it is common for a defendant as a matter of fact to control offshore companies and their subsidiaries, and to use the assets of those companies as if they were the defendant's own. Such a situation would come within the [Extended Definition]. Earlier decisions to the contrary are inconsistent with the reasoning of the Supreme Court [in Ablyazov].
- However, I do not consider that I need to resolve that tension in the authorities. While suggesting that Ablyazov may have overruled Lakatamia Shipping, Mr Baradon KC did not invite me to determine the issue and I have heard little argument on the question. For present purposes, I will follow the authority, Lakatamia Shipping, that bears directly on the question. I therefore proceed on the basis that the Property does not fall within the Extended Definition and I treat the inclusion of the Property in paragraph 6 as fortifying Professor Tripathi's obligation not to dissipate the value of his JJE shares by disposing of, or purporting to dispose of, any interest in the Property (see by analogy [53] of Rimer LJ's judgment in Lakatamia Shipping).
- The proposition in paragraph 38.iii) strikes me as difficult to resolve. If the Claimants are right, then despite (i) the Property being located in England and Wales and being mentioned specifically in the WFOs, (ii) the Property having a value on its own significantly in excess of the Injuncted Sum, and (iii) Professor Tripathi being at risk of contempt proceedings if the Property is disposed of, the Property offers Professor Tripathi no headroom to effect other disposals of assets. That is at least arguably contrary to the scheme of the Thompsell Injunction which envisages that the presence of frozen assets within the jurisdiction gives Professor Tripathi headroom to make other disposals (see paragraph 24.ii) above).
- However, Professor Tripathi's contrary position on paragraph 38.iii) is also not without its difficulties. The Property is not Professor Tripathi's asset. It will not, therefore, be directly available to satisfy enforcement of any judgment that the Claimants obtain against Professor Tripathi. It might be regarded as anomalous for the presence of an asset against which the Claimants could not enforce judgment to provide Professor Tripathi with licence to effect disposals of, or dissipate, assets that would be available to satisfy any such judgment.
- The difference of opinion set out in paragraph 38.iii) might have to be resolved if, for example, Professor Tripathi was arguing that the Property gave him headroom to spend sums on living expenses in excess of the £5,000 per week permitted by paragraph 12 of the Thompsell Injunction. However, no such dispute is presently before the court and I conclude that I do not therefore need to determine that difference of opinion.
THE SET ASIDE APPLICATION
Background
- The Claimants were concerned about the suggestion that there might be "equitable charges" or "equitable claims" in respect of the JJE shares. They came to the view that the WFOs gave them insufficient protection against dissipation of the Property or the shares in JJE. Those concerns prompted the Claimants to apply to the Eastern Caribbean Supreme Court High Court of Justice, Virgin Islands (the BVI Court) for an order that, among other matters, prevented JJE from disposing of the Property or making changes to its share capital or constitution.
- The Claimants wished to place in evidence before the BVI Court information that they had received as a result of the WFOs and the claims they had made against Professor Tripathi. For example, they wished to refer to information and documents that Professor Tripathi had disclosed referring to the potential existence of the equitable charge or equitable claim over the JJE shares. They wished to deploy information they had received about Professor Tripathi's receipt of Sale Proceeds in support of an argument before the BVI Court that without an injunction JJE might dissipate assets.
- That required the Claimants to obtain the permission of the English court for collateral use of that information. That requirement arose partly under Practice Direction 57AD, and possibly under CPR 31.22 and CPR 32.12, although there was some suggestion that at least part of the information in question had been referred to, or read by, an English court at a hearing held in public. Most relevantly, the requirement to obtain the consent of the English court arose pursuant to undertakings that the Claimants had given pursuant to the WFOs (see paragraph 6 of Schedule 2 of the Thompsell Injunction).
- There was also a possible issue with the Non-Enforcement Undertaking in the WFOs that read as follows:
(7) The Applicants will not without the permission of the Court seek to enforce this order in any country outside England and Wales or seek an order of a similar nature including orders conferring a charge or other security against the Respondent or the Respondent's assets.
- The Claimants applied to Master Clark on a without notice basis for permission for collateral use. That application was supported by the Sixth Witness Statement of Steven Baker, a partner at Proskauer Rose (Baker 6). Baker 6 contained sections that sought to satisfy the duty of full and frank disclosure.
- The application to Master Clark was only for permission for collateral use. The Claimants did not seek the English court's permission in relation to the Non Enforcement Undertaking. In the section of Baker 6 dealing with full and frank disclosure, Mr Baker addressed the possibility that such additional permission was needed but dismissed it saying:
… as a matter of English law, [the Non Enforcement Undertaking] merely prevents the Claimants from applying without permission for foreign interim relief that directly or effectively enforces the English Injunctions. It does not pertain to this application, by which the Claimants ask for interim relief to be granted by this Court in the exercise of its own independent jurisdiction: see Bankas Snoras v Antonov [2018] EWHC 887(Comm) at [53]-[54].
- Master Clark, in her order of 9 October 2024, gave the Claimants permission to rely on specified documents and information for the purpose of the proposed application to the BVI Court. Since she had not been asked for any permission pursuant to the Non Enforcement Undertaking, she gave no such permission.
- Shortly after Master Clark gave them that permission, the Claimants applied, on a without notice basis, to the BVI Court for an injunction.
- The application to the BVI Court was not for "enforcement" or "recognition" of the WFOs in any conventional sense. The BVI Court was not being invited to make what Mr Baradon KC described in his oral submission as an "exequatur": an order that treated the WFOs as having effect in relation to persons subject to the jurisdiction of the BVI Court. Indeed, I took the parties to agree that there is no legal basis under the law of the BVI for the making of such an exequatur order. Nor was the BVI making any order to the effect that the WFOs were "declared enforceable" against JJE so that they affected JJE in the sense explained in paragraph 25(c) of the Thompsell Injunction.
- Rather, the BVI Court was being requested to exercise its own discretionary power to make its own order imposing obligations on JJE. Moreover, it is common ground that the BVI Court was being invited to impose some obligations on JJE that were additional to obligations imposed on Professor Tripathi pursuant to the WFOs. For example, the proposed injunction in the BVI restricted JJE from making changes to its share structure or the identity of its directors. No such obligation appears in the WFOs.
- The BVI Court was not being invited to exercise its discretion so as to prevent any judgment given in BVI legal proceedings going unsatisfied as a consequence of asset dissipation. The Claimants issued no proceedings in the BVI against JJE and were not required to do so as a condition of obtaining an injunction in the BVI since statute law in the BVI (s24A of the Eastern Caribbean Supreme Court Act) permitted the BVI Court to grant freezing relief in support of non-BVI proceedings. The judge of the BVI Court who granted the injunction, Mr Justice Abbas Mithani KC [Ag], who is an English barrister and circuit judge, described the BVI injunction as being to "firm up" the WFOs.
- On 13 November 2024, the BVI Court made an injunction (the BVI Injunction) in substantially the form that the Claimants had requested. That injunction was made on a without notice basis pending a return date. On the return date JJE, who was represented by different lawyers from Professor Tripathi, consented to the continuation of the BVI Injunction.
- The BVI Injunction precluded any dealing with JJE's assets up to the Injuncted Sum. By contrast with the provisions of the WFOs described in paragraph 24.iii), the injunction sought in the BVI gave JJE no "credit" for additional sums frozen pursuant to the proprietary injunctions that applied to Professor Tripathi. Moreover, the restrictions in paragraph 5 of the BVI Injunction on changes to JJE's share capital, directors or domicile (the Corporate Level Restrictions), were not limited by reference to the Injuncted Sum.
- Mr Matthews KC accepted in his submissions that in failing to give credit for traceable assets that were frozen, the BVI Injunction inadvertently gave an element of "overprotection" as compared to the WFOs. It was less clear whether he accepted that the Corporate Level Restrictions resulted in "overprotection". At one point in his submissions, he described paragraph 5 as providing "potential" overprotection depending on the net asset position of JJE. However, a bit later he suggested that paragraph 5 "clearly" involved [overprotection] insofar as the restraint on the shares covered the whole of the shareholding. For my part, I do not see how most of Corporate Level Restrictions could sensibly be limited by reference either to the Injuncted Sum or the amount of Sale Proceeds frozen. The possible exception is the restrictions on issuing or redeeming shares: conceptually, JJE could be precluded from either redeeming shares beyond a certain value, or from issuing new shares that would dilute Professor Tripathi's holding below a certain value.
- By the Set Aside Application, Professor Tripathi seeks:
i) a declaration that the Claimants' application for the BVI Injunction, and its continuation, represented a breach of the Non Enforcement Undertaking;
ii) an order setting aside Master Clark's grant of permission for collateral use (on the grounds of a failure of full and frank disclosure); and
iii) consequently an order requiring the Claimants to take reasonable steps to secure the discharge of the BVI Injunction.
The scope of the Non Enforcement Undertaking
What propositions of law did Bankas Snoras decide?
- The judgment of Peter MacDonald Eggers QC, sitting as a deputy High Court judge in Bankas Snoras AB v Antonov and others [2018] EWHC 887 (Comm) (Bankas Snoras) is central to the Claimants' case on the Non Enforcement Undertaking. The Claimants argue that, applying the approach that I have summarised in paragraph 20 above, Bankas Snoras compels the conclusion summarised in paragraph 52 as a matter of law. Accordingly, the Claimants' position is that, applying Bankas Snoras, they were not required to seek any consent of the English court before obtaining injunctions in the BVI.
- Professor Tripathi's position is that Bankas Snoras made no general pronouncements relevant to construction of the WFOs but instead represented the court's factual conclusions on the particular case before it. To the extent that Bankas Snoras did make general statements on construction that support the Claimants' position, Professor Tripathi suggests that those statements are wrong.
- Given the nature of the debate between the parties, I start by considering what Bankas Snoras did decide.
- In my judgment, Bankas Snoras did express some conclusions on the proper construction of the Non Enforcement Undertaking. Given the parties' common position set out in paragraph 20, I consider that Bankas Snoras does, therefore, have something to say about the construction of the Non Enforcement Undertaking given in this case. The relevant issue of construction is addressed at [52] of Bankas Snoras which notes a "potential ambiguity" in the standard form non-enforcement undertaking. Shortly put, the ambiguity is whether the "order of a similar nature" referred to in the Non Enforcement Undertaking is an order that is similar in nature or effect to either (i) a freezing order (the "wider interpretation") or (ii) an order enforcing a freezing order (the "narrower interpretation").
- In my judgment, Bankas Snoras determined that, as a matter of construction, the narrower interpretation is to be preferred so that, in this case, the question is whether the BVI Injunction is "similar" to an order enforcing the WFOs. The question is not whether the BVI Injunction is similar to the WFOs themselves.
- That conclusion of construction cannot, however, determine whether the Non Enforcement Undertaking is engaged in any particular case since it will be necessary for a court to answer an additional "similarity" question by considering the nature of the order sought overseas and asking (i) whether it is similar to an order enforcing a freezing order and (ii) whether it confers a charge or other security against the Respondent or the Respondent's assets.
- The Claimants argue that the principle of construction determined by Bankas Snoras goes further. They rely, in particular, on [53(4)] of the judgment in Bankas Snoras:
(4) The Undertaking is not concerned with the situation where the order sought abroad does not amount to the direct or effective enforcement of the Freezing Order. The Undertaking is not concerned with the situation where the foreign court in making the relevant order is exercising its own independent jurisdiction, irrespective of the English Freezing Order, even if the existence of the Freezing Order granted in England is referred to in support of the application abroad for that order and even if the order of the foreign court is of a similar nature or effect as the English Freezing Order. Therefore, if the jurisdiction of the foreign court to grant the order does not depend upon or derive from the making by the English court of the Freezing Order for the purpose of the direct or effective enforcement of the Freezing Order, but arises from a different and independent right or jurisdiction, the Undertaking is not engaged.
- I can quite see how, read in isolation, this appears to be a general statement as to the construction of the Non Enforcement Undertaking. However, once it is read in context, I consider that it is not:
i) If the passage were intended to be a general statement on the scope of the Non Enforcement Undertaking, it would have to take the form of guidance on when a particular order will be regarded as similar in nature to an order enforcing a freezing injunction. Yet the passage does not appear in a section of the judgment that purports to give general guidance on how the "similarity" concept should be applied in any particular case. Rather, the passage is part of the court's explanation of its reasons for preferring the narrower interpretation to the wider interpretation.
ii) That analysis is consistent with the preceding sub-paragraphs ([53(1)] to [53(3)]) which are concerned with the policy purpose behind the Non Enforcement Undertaking (i.e. why the court requires that as a price of making a freezing injunction). Those preceding paragraphs are not concerned with how the "similarity" analysis should be performed in any particular case. Therefore, read in context, [53(4)] is part of a chain of reasoning. Having set out some matters that the Non Enforcement Undertaking is intended to police at [53(1)] to [53(3)], the judge contrasts that with some matters that he considers the Non Enforcement Undertaking is not seeking to police. The judge draws that contrast as part of his overall reasons for preferring the narrower interpretation to the wider interpretation.
iii) The court certainly returned to its point in [53(4)] when determining the similarity issue in the case before it (see [61] and [62] of the judgment). However, that formed part of its analysis of the facts before it, rather than any general point of construction applicable to all cases involving a similarly worded non-enforcement undertaking.
- The Claimants point to [62] of the judgment in Bankas Snoras:
In my judgment, based on the interpretation of the Undertaking I have adopted, therefore, the Lithuanian Arrest and the Swiss Arrest stand apart from the Freezing Order and cannot be regarded as orders enforcing the Freezing Order or 'an order of a similar nature'.
- They argue that the conclusion about the Lithuanian Arrest and the Swiss Arrest are said to follow "based on the interpretation of the Undertaking that I have adopted", demonstrating that [53(4)] was setting out a conclusion on construction. I do not agree. The "interpretation of the Undertaking" to which the judge was referring was the narrower interpretation as distinct from the wider interpretation. If the judge's conclusion truly was that the fact of the Lithuanian and Swiss courts exercising "their own independent jurisdiction irrespective of the English Freezing Order" (in the words of [53(4)]) was determinative, he would not have needed to consider the nature of the Lithuanian Arrest and Swiss Arrest in the detail he did.
- Of course, I accept that a consideration of whether an overseas court is exercising its "own independent jurisdiction independent of [a freezing order]" is relevant to the question whether its order satisfies the test of similarity. I do not, however, accept that, whenever an overseas court does so, it necessarily follows as a matter of construction, that the similarity test is failed. A fact-specific enquiry is required in each case.
Should I depart from Bankas Snoras?
- Given my conclusion in the preceding section, the only question of construction that Bankas Snoras determined was that summarised in paragraph 66 above. In his oral submissions, Mr Baradon KC showed me a number of matters that pointed against the narrower interpretation of the Non Enforcement Undertaking favoured in Bankas Snoras. For example, he submitted that the origin of the Non Enforcement Undertaking was the judgment of the Court of Appeal in Derby v Weldon [1990] Ch 48. While Nicholls LJ had referred to the undertaking which was offered in that case as being an undertaking not to "enforce the [freezing order] without first obtaining leave" (see p59D of the report), the other judges in the panel referred to that undertaking differently:
i) May LJ referred at p55G of the report to the same undertaking as leaving "any decision whether action should be taken … in respect of the assets of the two defendants to the English court". May LJ contemplated that the undertaking would give "the English court the general control over the litigation".
ii) Parker LJ considered that the undertaking would protect defendants from "exposure to a multiplicity of proceedings".
- I was also referred to the judgment in Derby v Weldon at first instance [1989] ECC 273. At first instance Mervyn Davies J declined to make a worldwide freezing order. He described an important reason for doing so as the risk that respondents might be oppressed by being "engaged in courts overseas in applications of a Mareva nature". Mr Baradon KC submitted that the undertaking that was discussed in the Court of Appeal must have been intended to deal with this concern. I also note that, at [43], [46] and [47] of LMAA Arbitration E, F and G v M and others [2013] EWHC 895 (Comm) (LMAA), Neuberger J as he then was approached the "similarity" question as inviting a comparison with a freezing order, rather than an order enforcing a freezing order.
- Mr Baradon KC's submissions certainly suggest that the wider interpretation is available. However, Bankas Snoras itself acknowledges this when concluding that the provision in question is ambiguous. Ultimately I was not strongly invited to depart from the conclusion in Bankas Snoras on this issue. The crux of Professor Tripathi's argument is that, even applying the narrower interpretation, the BVI Injunction was still of a nature similar to an order enforcing the WFOs. In any event, given the ambiguity, a choice must be made between the narrower interpretation and the wider interpretation and I am not satisfied that, in Bankas Snoras, the wrong choice was made. I will not depart from Bankas Snoras.
Application of the test of similarity
- I have explained that the BVI Injunction did not amount to "enforcement" of the WFOs (see paragraphs 55 to 57 above). There is no suggestion that it conferred any sort of charge or security over assets. Accordingly, the relevant question is whether it is of a similar nature to an order enforcing the WFOs, applying the narrower interpretation set out in Bankas Snoras.
- The Claimants point to the following features of the BVI Injunction as making it not of a similar nature to an order enforcing the WFOs:
i) The BVI Injunction affects JJE, which is not bound by the WFOs.
ii) The BVI Injunction seeks to make specific orders in relation to a specific asset (the Property) and JJE's share capital, directors or place of domicile. The WFOs impose general restrictions on Professor Tripathi dissipating his assets. While the WFOs bite on the JJE shares, they impose no Corporate Level Restrictions.
iii) The BVI Injunction represented the exercise of the BVI Court's own statutory jurisdiction to grant relief in support of overseas proceedings. The BVI Court was entitled to make the BVI Injunction whether or not the Claimants had secured WFOs in England and Wales.
- Professor Tripathi points to the following indications of "similarity" between the BVI Injunction and an order enforcing the WFOs:
i) The BVI Injunction was sought precisely because of a concern that the WFOs lacked teeth because (i) they did not bind JJE and so that (ii) there was a risk that JJE might itself dispose of the Property or effect changes to its share capital, domicile or constitution that might reduce the protection afforded by the WFOs.
ii) The BVI Injunction was made in support of the very same cause of action as that underpinning the WFOs.
- In my judgment, it is necessary for any analysis of "similarity" to be grounded in an appropriate framework rather than simply consisting of an impressionistic analysis of points of similarity and points of dissimilarity.
- The framework comes from the purpose for which the Non Enforcement Undertaking was imposed. From Derby v Weldon, Bankas Snoras and LMAA and Dadourian v Simms [2006] 1 WLR 2699 (Dadourian), I consider that the following policy considerations are operative:
i) Without the Non Enforcement Undertaking, a worldwide freezing order could become an instrument of oppression that spawns litigation in multiple overseas jurisdictions in which a defendant holds assets. The defendant might be required to devote time and resources to such overseas proceedings at the same time as having to defend the substantive proceedings that led to the freezing order.
ii) Without the Non Enforcement Undertaking, a litigant who obtains a worldwide freezing order could use it as a lever to obtain relief in overseas courts, or even security, in respect of assets overseas that go beyond the relief that the English court was prepared to give.
- Moreover, as was explained at [53(1)] to [53(3)] of Bankas Snoras, the policy concern driving the Non Enforcement Undertaking relates to how a worldwide freezing order granted by an English court could otherwise itself be used. There is no suggestion in the authorities that it is inherently "oppressive" for a person who has the benefit of a freezing order granted by an English court to take action in multiple jurisdictions. Tortfeasors who commit torts against a claimant in multiple jurisdictions can reasonably expect to face legal action in multiple jurisdictions whether or not the claimant has the benefit of a worldwide freezing order. The line is crossed, and the policy behind the Non Enforcement Undertaking becomes operative, when the English court's freezing order itself becomes used as an instrument of oppression, or as a lever to secure additional relief that the English court would not give.
- While my task is not to match the facts of this case to those of Bankas Snoras or LMAA, in my judgment the observation in paragraph 81 is central to an understanding of the outcome of both cases:
i) In Bankas Snoras, the court considered that it was highly significant that the Lithuanian Arrest and Swiss Arrest were granted in respect of the Lithuanian Civil Claim and the Swiss Civil Claim to which the defendant would be exposed in any event (see [64] of the judgment). The court acknowledged that there was a "considerable overlap" between the Lithuanian Civil Claim and the Swiss Civil Claim and the English proceedings in support of which the English court made the worldwide freezing order. However, that did not alter the conclusion that the Lithuanian Arrest and Swiss Arrest were not of a similar nature to enforcement of the freezing order in the requisite sense.
ii) In LMAA the result was similar for similar reasons. The claimant had the benefit of an English freezing order in support of an English maritime claim. It also had the right, under an international convention, to arrest a vessel owned by the defendant as security for that claim, which it duly exercised. The claimant was exercising its right of arrest to give it security for the very same cause of action that had led to the English freezing order. However, the ship arrest overseas was still not an order of a "similar nature" because it arose from "the pursuit of different and independent rights to security that [were] available abroad".
- I therefore consider the indications of similarity and dissimilarity having regard to the purpose of the Non Enforcement Undertaking.
- In my judgment, the points of dissimilarity relied upon in paragraphs 77.i) and 77.ii) are of little significance. Dadourian sets out considerations that should be addressed by a court asked for permission to make applications that would otherwise contravene an undertaking like the Non Enforcement Undertaking. Those considerations expressly address the position of third parties who would be either party to, or affected by, an order made by an overseas court. Given the parties' common position summarised in paragraph 20, I consider that an order against a third party can be of a "similar nature" to an order enforcing a freezing order, even if made against someone who is not party to the freezing order. Moreover, the fact that the BVI Injunction contains Corporate Level Restrictions that are different from the restrictions imposed by the WFOs does not make the BVI Injunction dissimilar to an order enforcing the WFOs. After all, a key policy objective behind the Non Enforcement Undertaking is to restrict parties' abilities to use English freezing orders as a means of obtaining more extensive relief overseas.
- I consider the point in paragraph 77.iii) to be a forceful indicator of dissimilarity. Professor Tripathi seeks to diminish the force of that point noting that the Claimants' skeleton argument put before the BVI Court makes it clear that a key concern driving the application in the BVI was the risk that Professor Tripathi "may seek to cause JJE to dissipate its assets so as to prevent the [Claimants] from effectively enforcing future judgments against him". As I have noted in paragraph 39 above, if he acted in this way, Professor Tripathi might well be in breach of the WFOs. Nevertheless, it is clear that the Claimants were seeking to address what they saw as a lacuna in the WFOs that might permit JJE to dispose of the Property. No doubt that is why counsel for the Claimants described the BVI Injunction as being "parasitic" on the WFOs in oral argument before the BVI Court and why Mr Justice Abbas Mithani KC described the BVI Injunction as "firming up" the WFOs.
- On balance, I conclude that these points do not displace the indications of dissimilarity on which the Claimants rely. The BVI courts have a statutory power to grant freezing relief in support of non-BVI actions. In principle, the Claimants were entitled to seek that relief even if they had no WFOs from the English courts. If the analysis stopped there, I do not consider that the BVI Injunction would be regarded as being "similar" to an order for enforcement of the WFOs. The fact that the Claimants had particular reasons for asking the BVI to invoke its statutory power does not, in my judgment, alter that conclusion. Nor is the conclusion altered by the fact that the BVI Court and counsel described the BVI Injunction in terms that reflected the Claimants' reasons for seeking it. I attach little significance to Professor Tripathi's submission, by reference to a note of the hearing before the BVI Court, that the BVI Court's decision was influenced by the fact that English judges had been content to grant the WFOs. The question is not why the BVI Court made the BVI Injunction, but whether that injunction is similar to an order enforcing the WFOs.
- Professor Tripathi submits that the BVI Injunction represented just the kind of oppression with multiple suits overseas that the Non Enforcement Undertaking was intended to prevent. I do not accept that. If the BVI Court had considered the BVI Injunction to be oppressive or duplicative, it could have decided not to exercise its statutory power under BVI law and withheld the freezing relief sought.
- I conclude that the BVI Injunction was not obtained in breach of the Non Enforcement Undertaking.
Duty of full disclosure
The nature of the duty
- It is common ground that the Claimants were under a duty of full and frank disclosure when they applied without notice to Master Clark for permission to make collateral use of documents and information. I did not understand the parties to disagree on the nature of that duty, although they certainly did disagree on whether the Claimants breached that duty and whether Professor Tripathi is applying an unduly "scattergun" approach to his allegations of breach. In those circumstances, I will simply set out salient features of the duty of full and frank disclosure that are relevant to the case before me (drawn largely from the Claimants' written submissions based on the summary of applicable principles in Tugushev v Orlov [2019] EWHC 2031 (Comm) (Tugushev)). I do not purport to provide an exhaustive summary of all aspects of the duty that might be relevant in other cases:
i) The Claimants were under a duty to make full and accurate disclosure of all material facts and to draw the court's attention to significant factual, legal and procedural aspects.
ii) The reason for that duty is to ensure the integrity of the court's process. It is the necessary corollary of the court being prepared to make an order without notice to Professor Tripathi.
iii) "Material" facts are those which it is material for the judge dealing with the application to know. The Claimants were under a duty to make the court aware of the issues likely to arise and the possible difficulties with their application. That need not extend to a detailed analysis of every possible point which may arise. However, it could extend, where relevant, to matters of the Claimants' intentions.
iv) Where facts are "material" in the broad sense, there will be degrees of relevance. A due sense of proportion must be kept and sensible limits have to be drawn. The question is not whether the evidence in support could have been improved (one to be approached with the benefit of hindsight). The primary question is whether in all the circumstances the Claimants' disclosure was such as to mislead the court in any material respect.
The allegations of breach
- At [127] of Mex Group Worldwide Ltd v Ford & others [2024] EWCA Civ 959, Coulson LJ gave guidance on how allegations of a failure to comply with the duty should be presented. He urged a focus on the "big ticket" allegations of failures on the basis that, if they are not established, or are found to relate to immaterial matters, then less significant failures would not bridge the gap.
- The Claimants accused Professor Tripathi of breaching this principle. They took the position in oral closings that they would deal only with the allegations of breach that were set out in Mr Persad's Fifth Witness Statement (Persad 5) filed in support of the Set Aside Application. They declined to deal with other allegations of breach set out in Professor Tripathi's skeleton argument or oral submissions made by Mr Baradon KC at the hearing.
- It was up to the Claimants to decide which allegations to respond to orally. However, I do not accept that any allegation of breach necessarily had to be set out in Persad 5. The matters that I have described in paragraph 89 were largely, though not exclusively, matters of submission. Therefore, subject to constraints of procedural fairness including the need to avoid the Claimants being ambushed, I consider that I am entitled to consider allegations raised in written and oral submissions. There is no procedural unfairness in considering the allegations made in Mr Baradon KC's skeleton argument which the Claimants received in good time before the hearing and which refers to factual matters that were well within the Claimants' knowledge.
- In my judgment, the following are the "big ticket" allegations that emerge from Persad 5 and Professor Tripathi's skeleton argument:
i) The Claimants failed to disclose that they were proposing to seek a BVI Injunction that "froze" the entire economic value of the Property without giving any credit for headroom created by the proprietary injunction over Sale Proceeds (see paragraph 24.iii) above).
ii) The Claimants failed to disclose that they already had substantial protection against the dissipation of the Property, which had a value considerably in excess of the Injuncted Sum (for example the UN1 registered at HM Land Registry) which called into question the very need for the BVI Injunction.
iii) The Claimants failed to disclose the realistic possibility that applying for the BVI Injunction would contravene the Non Enforcement Undertaking and instead gave the misleading impression that Bankas Snoras determined, as a matter of authority, that there would be no such breach.
- In the course of his oral submissions on behalf of the Claimants, Mr Matthews KC accepted the breach summarised in paragraph 93.i).
- I consider that the breach alleged in paragraph 93.ii) is established. In making the application for collateral use, the Claimants were relying strongly on the proposition that "there is a real risk that JJE might seek to dissipate its assets or adversely deal with the shares it has issued at [Professor Tripathi's] instance and/or in his favour" (see [62] of Baker 6). The fact that the UN1 precluded any dealing with the Property without the consent of two named individuals at Proskauer Rose was material to the evaluation of how real that risk was. Yet, by failing to disclose the existence of the UN1, the Claimants deprived Master Clark of the ability to consider that point.
- In his oral submissions, Mr Matthews KC argued that the UN1 was insufficient protection since even with the UN1, the Property would still be encumbered by the occupational rights of Professor Tripathi and his family members who live there. He also argued that there was a risk that JJE and/or Professor Tripathi had other unsecured creditors so that any proceeds of sale of the Property would be insufficient to meet any judgment that the Claimants obtain. It seems to me that those submissions came close to arguing that the WFOs, and the UN1 registered in support, were inadequate because they did not confer security on the Claimants. I reject that submission since the purpose of the WFO was to protect against unauthorised dissipation of assets rather than to confer security. However, even if Mr Matthews KC's submission was more limited, it does not alter the conclusion that Master Clark was not given the opportunity to evaluate the significance or otherwise of the UN1 when she should have been.
- Paragraph [66(4)] of Baker 6 suggested that Bankas Snoras was authority for a proposition of law to the effect that there could be no breach of the Non Enforcement Undertaking in circumstances where the Claimants were inviting the BVI Court to "exercise… its own independent jurisdiction". I have explained why I do not consider that statement to be correct.
- However, I consider that this is an area in which Baker 6 could have been improved, rather than as demonstrating a failure to disclose a consideration of high relevance. While I do not agree that Bankas Snoras decides the proposition of law for which it is cited in Baker 6, my own analysis has led to the conclusion that the fact that the BVI Court was exercising its own independent jurisdiction was a forceful indication that the BVI Injunction was not "of a similar nature" to an order enforcing the WFOs. Mr Baker was correct to say that the application in the BVI involved no breach of the Non Enforcement Undertaking even if his reasoning was not quite accurate. I do not accept the allegation of breach set out in paragraph 93.iii).
Would the Claimants obtain permission if full and frank disclosure had been given?
- The parties agree that the court has discretion to permit collateral use. It should exercise that discretion judicially and having regard to the overriding objective. In my judgment, the following considerations are relevant in the circumstances of this case:
i) The Claimants are bound by provisions of CPR and their own undertakings that restrict collateral use. Therefore, they must show cogent and persuasive reasons why they should be permitted to use the information and documents in question.
ii) It is necessary to take into account the purposes for which the information is to be used. More limited use: for example use for the purposes of seeking legal advice only may be easier to justify than extensive use in a trial.
iii) The likely consequences, including prejudice to both sides, of permitting or not permitting such use should be considered.
iv) The proper administration of justice, both in England and Wales and elsewhere, is a relevant consideration.
- The Claimants wanted to use the information in order to support the application for the BVI Injunction. As I have noted, statutory provisions in the BVI permit applicants to seek freezing relief in support of non-BVI proceedings. Necessarily an applicant for such relief will need to show a real risk of dissipation and persuade the BVI Court that any existing freezing relief is insufficient. The information that the Claimants sought to use was for that purpose only. If the Claimants were not allowed to use the information in question they might not be able to satisfy the BVI Court on these matters and so would be deprived of any ability to access the kind of relief that statute in the BVI permits. I do, therefore, consider that the Claimants have shown a sufficiently good reason for wanting to the use the information in question.
- However, that is not the end of the matter. It is also necessary to consider prejudice to Professor Tripathi if the Claimants are permitted to use the information. In this regard, Professor Tripathi argues that it was manifestly disproportionate for the Claimants to seek the BVI Injunction given the substantial protection that they have pursuant to the WFOs and, in particular, the fact that the Property is both legally and practically frozen (see the points in paragraphs 38 to 40 above). The failures of full and frank disclosure that I have identified went directly to this issue and I should therefore pay particular attention to it.
- As I have explained in paragraphs 38 to 40 above, while it is true that the WFOs and the UN1 do provide the Claimants with significant protection, there is some gap in that protection arising from the facts that (i) JJE is not bound by the WFOs, (ii) the WFOs contain no Corporate Level Restrictions binding on JJE and (iii) the UN1 offers practical protection against transfers of registrable interests in the Property only. That gap in protection is present even if the Property falls within the Extended Definition. Opinions might vary as to the significance of the gap. However, it was not obviously unreasonable for the Claimants to wish to plug that gap and it was appropriate for them to have the opportunity to persuade the BVI Court that there was a sufficient need for the BVI Injunction.
- In oral submissions on behalf of Professor Tripathi, Mr Baradon KC mounted a strong attack on the disclosure on this issue in Baker 6. Even though I do not consider that all of those matters were sufficiently "big ticket" to go to the allegation of a failure of full and frank disclosure, I will consider them as part of my analysis of whether permission for collateral use would have been granted had full and frank disclosure been given:
i) I do not accept Professor Tripathi's argument that permission for collateral use should be refused because the risk of dissipation identified in Baker 6 was no higher than that identified when the WFOs were first made. In my judgment, that would be a matter for the BVI Court to weigh up once permission for collateral use was given. It is not such a fundamental objection to the making of the BVI Injunction as to mean that permission for collateral use should necessarily be refused.
ii) I note that the Claimants have not always been successful in obtaining further interlocutory relief in the English proceedings against Professor Tripathi. On 11 April 2024, David Bailey KC, sitting as a judge of the High Court, refused an application to extend the Injuncted Sum in a judgment reported at [2024] EWHC 1740 (Ch). On 16 May 2024, Master McQuail refused the Claimants' application for a debarring order. On 19 July 2024, Edwin Johnson J refused to list an application requiring Professor Tripathi to provide further affidavit evidence as to his compliance with the WFOs holding that it was insufficiently urgent for the Interim Applications List. However, the fact that the Claimants have perhaps asked for too much in the past does not alter the fact that there were defensible reasons for seeking BVI Injunction.
iii) Baker 6 did acknowledge that Professor Tripathi had said in his fifth affidavit (Tripathi 5) that there are no equitable charges or claims in respect of the JJE shares. The disclosure was a little partisan, in that it did not bring out the fact that Professor Tripathi said he had taken legal advice on the issue, but was not materially misleading. I do not consider that the mere fact that Professor Tripathi gave this confirmation means that the application for collateral use should be refused. Rather, I regard it as a matter for the BVI Court to weigh up when deciding whether to grant the BVI Injunction.
iv) Some of the criticism of Professor Tripathi's failure to disclose assets was similarly partisan. The allegations surrounding failure to disclose a Revolut bank account appear overstated since the balance of that account was £5.01 and so less than the £15,000 threshold specified in the Thompsell Injunction. However, viewed as a whole, while the disclosure was partisan, Professor Tripathi's compliance to date is not so obviously good as to mean that the Claimants should be precluded from even putting concerns about his compliance before the BVI Court.
- I consider that the proper administration of justice is also a relevant consideration. The BVI Court has a statutory jurisdiction to give freezing relief in support of the English proceedings against Professor Tripathi. It is desirable that it should be given a clear picture of the perceived need for that injunction so that it could exercise that jurisdiction fairly and appropriately. That could not be achieved if the application for collateral use were refused.
- Finally it is not insignificant that JJE has consented to the continuation of the BVI Injunction on the return date and has not sought to set it aside. I acknowledge that, in consenting to the continuation, JJE reserved its rights to apply to set aside or vary the BVI Injunction in the future. I also accept that Professor Tripathi's position is that proceedings should not have been brought at all in the BVI Court because of the Non Enforcement Undertaking. However, against that, Professor Tripathi is well-resourced, well-advised and has already incurred significant legal fees in connection with this dispute. If it were thought that the BVI Injunction were oppressive, either to JJE or to Professor Tripathi, JJE might have been expected not to consent.
- Overall, even had full and frank disclosure been given, I conclude that, given the relatively modest scale of information the Claimants were seeking to use, the balance would come down in favour of permitting the Claimants to use the information requested in the BVI proceedings.
The proper response to the failure of full and frank disclosure
- No-one suggested that I should do anything other than follow the guidance at [7(x)] to [7(xiii)] of Tugushev as adapted to reflect the fact that the application to Master Clark was for permission to make collateral use of documents and information, rather than for a freezing order.
- I conclude that the breaches of the full and frank disclosure obligation were inadvertent. The Claimants did not positively seek to mislead the court. They did not notice that the BVI Injunction did not give credit for items frozen by the proprietary injunction in the same way as the WFOs did and so failed to draw that fact to Master Clark's attention. While they were aware of the UN1, they did not turn their mind to the significance of it for the application to Master Clark.
- I note that the discretion not to set aside a without notice order made following a failure of full and frank disclosure should be exercised sparingly. However, I consider this to be a suitable case to exercise the discretion in this way. Even with full and frank disclosure, the Claimants would have obtained the necessary permission for collateral use. The information has now been used in the BVI and the only way to undo that would be by requiring the Claimants to take steps in the BVI for the set aside of the BVI Injunction. I regard that as disproportionate given that (i) the BVI Court was satisfied that the BVI Injunction should be made and (ii) the Claimants have demonstrated to my satisfaction that there were justifiable reasons for seeking an injunction in the BVI.
- In conclusion, I consider that the appropriate order in response to the failure of full and frank disclosure is as follows:
i) The Claimants accepted in open court that they would seek to ensure that the BVI Injunction is varied to deal with the overprotection that I have described in paragraph 60. It will be a matter for the BVI Court, guided by the parties' submissions, whether it chooses to limit any aspect of the Corporate Level Restrictions by reference to the Injuncted Sum.
ii) Master Clark's grant of permission for collateral use is not set aside. While Mr Matthews KC accepted in his submissions that he could see the force of Professor Tripathi's submissions that Master Clark's permission should be set aside, ultimately the Claimants opposed that course of action as disproportionate. I agree with them in that regard.
iii) The Claimants' failure of full and frank disclosure should be marked by an appropriate costs order.
- Finally, I express the hope that the parties will be able to agree a pragmatic way forward in relation to the BVI Injunction in the light of the fact that JJE appears to be amenable to giving some sort of undertaking to comply with the WFOs.
THE TRACING APPLICATION
- By paragraph 4 of the Bailey Order, Professor Tripathi was obliged to provide, no later than 14 working days later, "a sworn affidavit confirming to the best of his abilities the whereabouts (with supporting documentation, including bank statements) of" certain specified payments that he received from Ms Kent.
- The Claimants assert that Professor Tripathi's preparation of this tracing exercise has emerged "piecemeal" and has been beset by inaccuracies and contradictions. That said, by the time of the hearing before me, much agreement had been reached on additional information that Professor Tripathi would provide. The following issues, however, remained outstanding and were addressed in argument before me, with numerical references being to an Amended Draft Order (the ADO) that the Claimants served shortly before the hearing:
i) Paragraph 1 of the ADO – the Claimants request four American Express statements that Professor Tripathi has accepted show "debits of £305,716.52 of spending from traceable funds" and a tracing analysis in relation to the "debits" in question.
ii) Paragraph 2.2 of the ADO – a request for an explanation of an asserted inconsistency between Professor Tripathi's earlier explanation that certain gold bullion was sold prior to 1 January 2024 when he now says that some of the gold bullion was gifted to his father and his wife.
iii) Paragraphs 2.3(ii) and 2.3(iii) of the ADO – a request for details of the amount of gold bullion that was so gifted and the date of the gifts.
iv) Paragraph 3 – a request for an explanation as to why certain payments (totalling over USD 500,000) were previously described as "consulting fees" paid to Charles Scott McNutt and Rose when they are now described as a "gift" made to Colleen McNutt.
v) Paragraph 6 – a request for an explanation as to why a USD30,000 payment to Colleen McNutt was previously said to be a reimbursement of expenses but is now said to be a gift.
- The requests in paragraphs 2.2, 3 and 6 of the ADO are for explanations of asserted discrepancies. The Claimants disavow any intention to cause Professor Tripathi embarrassment or to obtain material for a future cross-examination. Rather, they say that payments now described as gifts were previously described as something else. Gifts are more easy to trace into than payments for "consulting services". The Claimants are concerned that, if they seek to trace into the asserted "gifts" they will be met by an objection from the recipient of the sums in question that they were "consulting services" after all. In short, to use a colloquial expression, they are concerned about being given the "runaround" if they seek to trace into the alleged gifts.
- I understand the point, but do not consider that it amounts to a sufficiently good reason for ordering Professor Tripathi to provide the information requested in circumstances where the Bailey Order was directed at a tracing exercise to enable the Claimants to discover the "whereabouts" of the Sale Proceeds. The payments in issue were either gifts, for "consulting services" or were "reimbursement of expenses". If the recipients of those sums consider that the Claimants are not entitled to trace into them, for example because they were received in return for valuable consideration provided, those recipients are likely to make that argument in any event. I do not consider it appropriate to require Professor Tripathi to provide explanations simply for the purpose of giving the Claimants advance disclosure, or advance notice of arguments that recipients of the payments might wish to raise when objecting to an attempt to trace into funds that they hold.
- In principle, Professor Tripathi accepts that he should answer the request set out in paragraph 1 of the ADO. However, he says that he cannot perform the tracing exercise without a full set of American Express statements (not just the four that actually show transactions in traceable assets). He had difficulty in obtaining the statements in question since he has closed his account with American Express. However, after I released this judgment in draft, I was told that he had obtained the statements he needed by 26 February 2025. He has had lots of time since then to perform the necessary analysis. He must provide the information requested in paragraph 1 of the ADO within 7 days of the hand-down of this judgment. Professor Tripathi may redact documents to obscure irrelevant information but he must indicate clearly which items of the statements relate to transactions in traceable assets.
- I have concluded that Professor Tripathi must provide the information summarised in paragraph 113.iii). Some complaint was made by Professor Tripathi in submissions about the proportionality of some of the Claimants' requests for information once the matters in issue were expressed as a percentage of the sum in dispute. However, in comments on the embargoed judgment, Professor Tripathi emphasised that he did not at the hearing resist the making of an order requiring him to give disclosure in respect of allegedly traceable monies used to purchase gold bullion. For completeness, I record my conclusion that it is proportionate for the Claimants to seek a tracing analysis involving £60,400 of gold bullion. £60,400 is a material sum of money, even if it represents less than 1% of the Sale Proceeds and the Claimants have, by obtaining the WFOs, shown a good arguable case that it is their money.
- I also consider that the information requested is relevant to the "whereabouts" of traceable assets which formed the basis of the Bailey Order. Knowing the amount of gold bullion, and the dates on which it was said to have been given away, is information that the Claimants are entitled to have in order to help them to establish the bullion's "whereabouts".
THE HST APPLICATION
Introduction
- The HST Application is prompted by the Claimants' suspicion that assets of the Trust might be Professor Tripathi's assets within the meaning of the Extended Definition. By the HST Application, the Claimants seek further information on the Trust, but do not at this stage seek any order freezing assets of that trust.
- The grounds for the Claimants' suspicions are set out in the Seventh Witness Statement of Steven Baker (Baker 7). Very broadly, the Claimants have established that the Trust was constituted by Ms Pandey transferring 290,500 SMT shares to Highvern on 16 September 2021. It is common ground that the Trust is a discretionary trust and that the beneficiaries of the Trust include Professor Tripathi, Ms Pandey and other of their relatives.
- SMT's constitutional documents would have required the directors of SMT to approve the transfer in September 2021. The Claimants assert that Professor Tripathi was party to a board resolution approving the transfer but that he did not disclose to his fellow directors that he was a beneficiary of the Trust.
- Between December 2021 and November 2022, Highvern, in its capacity as trustee of the Trust appears to have sold 285,750 of its SMT shares in a series of transactions for an aggregate consideration of USD 91 million. The Claimants understand that Professor Tripathi has obtained some USD 40 million from Highvern by way of what are described as "loans" between March 2022 and October 2024.
- The Claimants suggest that there are other links between the Trust and Professor Tripathi. Professor Tripathi has been described as an "investment adviser" to the Trust. They suggest that Highvern has paid some USD 20 million to settle the claim brought by Al Waha that involved allegations of wrongdoing against Professor Tripathi. They point out that JJE's corporate directors are subsidiaries of Highvern.
- The Claimants submit that the above matters suggest that Professor Tripathi might have "control" over the Trust. That inference arises partly because of Highvern's apparent willingness to make large sums of money available to him and to settle the Al Waha action in which he was implicated. The Claimants also suggest that there are unresolved questions about how Ms Pandey obtained the SMT shares that she settled on the Trust. Professor Tripathi has suggested that she was an "early investor" in SMT, but the large number of shares that she held strikes them as more consistent with her being a co-founder of SMT. They suggest that the very property said to be held by the Trust and discretionary trusts might have originated from Professor Tripathi.
Discussion
- The Claimants are not in a position to assert that assets of the Trust are Professor Tripathi's assets under the Extended Definition. They do not, therefore, assert that they have a current entitlement to disclosure of information connected with the Trust pursuant to the asset disclosure order in paragraph 10 of the Thompsell Injunction. However, it is common ground that I have the power, whether under CPR 25.1(1)(g), or the court's inherent jurisdiction, to order Professor Tripathi to give disclosure of the matters connected with the Trust. JSC Mezhdunarodniy Promyshlenniy Bank v Pugachev [2015] EWCA Civ 139, [2015] 1 WLR 160 (Pugachev) was an example of a case where disclosure had been ordered for the purposes of determining whether particular assets fell within the Extended Definition or not.
- The Claimants accept that they must establish some basis for their assertion that Professor Tripathi controls the assets of the Trust before the court will exercise its discretion to require Professor Tripathi to give disclosure of matters connected with the Trust. The Claimants submit, by reference to [49] and [50] of Lewison LJ's judgment in Pugachev that they are obliged to show "some credible material" on which the assertion is based. Professor Tripathi does not object to that formulation and I will apply it.
- I accept, of course, that the facts described in paragraphs 120 to 124 are consistent with Professor Tripathi having control of the Trust. However, many observable facts are consistent with theories that are incorrect. It is, therefore, necessary to test the observable facts on which the Claimants rely against other indications. In this case, the Claimants have had ongoing correspondence with Forsters LLP, Highvern's English solicitors. Forsters LLP have seen the WFOs. In a letter of 2 October 2024 to Proskauer Rose, Forsters LLP said that the assets of the Trust are not caught by the WFOs.
- The Claimants do not suggest that Forsters LLP are lying, but submit that their confirmation is not worth as much as it might seem since it is likely to depend on information that Professor Tripathi has provided them. If Forsters LLP were, as Mishcon de Reya did when giving the assurances about the destination of the Sale Proceeds referred to in paragraph 13, qualifying their confirmation by reference to their knowledge and belief, I could see some force in that point. However, Forsters LLP's assurance is not so qualified and was given with full knowledge of the terms of the WFOs. The Claimants are under-estimating the quality of the assurance given by Forsters LLP.
- Moreover, Highvern is a reputable trustee. It is, as Forsters LLP explain, subject to regulation and is also subject to the supervisory jurisdiction of the Royal Court of Jersey. Highvern's activities used to be carried on by the private bank, Coutts & Co, until a management buyout in 2016. This too is a pointer against the proposition that Highvern has abrogated its fiduciary duties and allows itself to be dictated to by Professor Tripathi.
- I am prepared to accept that the Claimants have, by a slender margin, shown "some credible material" to support the possibility that Professor Tripathi controls the Trust. Put another way, I would not regard the material that the Claimants have put forward as "incredible". However, the force of that material is significantly diminished by the indications that I have summarised above.
- The Claimants acknowledge that they seek disclosure pursuant to the HST Application so that they can consider making applications to freeze assets of the Trust. However, as matters stand, the JJE Shares are frozen by the WFOs and the Claimants have practical comfort that JJE's principal asset, the Property which is worth more than the Injuncted Sum, cannot be disposed of without the consent of two named individuals at their solicitors. Given my judgment on the Set Aside Application, the Claimants will largely retain the benefit of the BVI Injunction, although the BVI Court may well decide to vary that to deal with the issue of "overprotection". Therefore, even if Professor Tripathi does control the Trust, it is far from clear that it would be proportionate to extend the WFOs to assets of the Trust.
- I acknowledge that the WFOs obliged Professor Tripathi to disclose all of his assets, and not just assets up to the amount of the Injuncted Sum. Therefore, if the assets of the Trust fell within the scope of the Extended Definition those assets would have to be disclosed. However, in circumstances where it is not clear whether Trust assets do fall within the scope of the Extended Definition, it is appropriate to have regard to the matters in paragraph 131 in deciding whether to exercise a discretionary power to order disclosure.
- In my judgment, the balance comes down in favour of refusing the HST Application.
DISPOSITION
- I have set out my conclusions on the three applications above. If the parties cannot agree an order giving effect to those conclusions, there will need to be a further hearing to finalise an appropriate order.
