In recent years, English Courts have seen considerable discussion around the interpretation of the “good arguable case” standard—a critical test for granting a freezing injunction. However, conflicting judgments have applied inconsistent approaches to this test, which has often led to uncertainty about the required threshold. Bringing much-needed clarity to this grey area, the Court of Appeal’s recent ruling in Isabel dos Santos v Unitel SA [2024] EWCA Civ 1109 offers a decisive refinement. The judgment, delivered on 30 September 2024, not only addressed the threshold question but also set a firmer course for future cases, providing both clarity and predictability to this area of law.
The Claim
Isabel dos Santos, daughter of former Angolan President José Eduardo dos Santos and founder of Angola’s largest telecom company, Unitel, held a 25% stake in the company until it was appropriated by the Angolan state in 2020. Unitel provided loans totalling EUR€322.9 million and US$43 million to her Netherlands-based company, Unitel International Holdings B.V. (UIH), but UIH defaulted on interest payments in 2019.
In 2020, Unitel demanded repayment and issued proceedings against UIH. By 2022, Unitel applied to join Isabel dos Santos personally to the claim and sought a worldwide freezing order (WFO) against her, which was granted in December 2023. Although Isabel dos Santos’ initial appeal was denied, permission to appeal was granted in March 2024 due to key legal issues of law, the appellant having a real prospect of success and Mr Justice Bright highlighting that “the law is in a confused state, which cries out for a definitive answer from the Court of Appeal”.
The Cry for a Definitive Answer
The “good arguable case” test has traditionally required a claim to be “more than barely capable of serious argument” without imposing a greater-than-50% likelihood of success. This standard, established in Ninemia Maritime Corp v Trave Schiffahrtsgesellschaft GmbH [1983] 2 Lloyd’s Rep 600 (“The Niedersachsen”), has guided courts in assessing claims for various judicial remedies, particularly freezing injunctions. However, more recent rulings suggest a shift toward a stricter interpretation of the test, bringing it closer to the “serious issue to be tried” threshold used in different legal contexts. Cases such as Lakatamia Shipping Co Ltd v Morimoto [2019] EWCA Civ 2203 and Kaefer v AMS [2019] 3 All ER 979 discuss the shift and glossing over of the “good arguable case” test, which has a more rigorous approach in the context of jurisdictional gateways.
The Court of Appeal
The Court of Appeal considered two issues arising out of the WFO made by Mr Justice Bright against Isabel dos Santos:
- What is the meaning of the “good arguable case” element of the test required for the grant of a freezing injunction and whether (whatever the test) the judge was right to find that the respondent Unitel had a good arguable case?
- Is there a general rule that the costs of a WFO application should be reserved?
It was ultimately held that the appropriate test for establishing a “good arguable case” was the one set out by Mr Justice Michael Mustill in The Niedersachsen: a case that goes beyond merely arguable but does not necessarily need to be one the judge views as having a greater than 50% chance of success. In fact, the Court of Appeal further clarified that the “good arguable case” standard for granting freezing injunctions is equivalent to, or indistinguishable from, the “serious issue to be tried” test used for other types of interim injunctions. This alignment reinforces a consistent standard for assessing the merits required to obtain either form of injunctive relief.
In respect of the costs order made against Isabel dos Santos, the Court of Appeal firmly upheld the initial costs ruling, finding no grounds to depart from it and drawing a clear distinction between freezing injunctions and interim injunctions under American Cyanamid. Emphasising Civil Procedure Rule 44.2(2), the Court noted the general principle that an unsuccessful party in a contested interim application should bear the costs of the successful party unless there is a specific reason to decide otherwise.
Commentary
This ruling delivers long-awaited clarity to the “good arguable case” standard, reaffirming the Niedersachsen interpretation and thereby avoiding an unduly high threshold for claimants. By reinforcing a balanced standard, the Court has provided a crucial reminder of what applicants must demonstrate when seeking a freezing order.
Mr Justice Bright’s call for a definitive test has been answered by the Court of Appeal, yet the potential for an appeal to the UK Supreme Court remains on the horizon. For now, this judgment provides a solid foundation and a valuable reference point in the evolving landscape of injunction law, giving practitioners a clear roadmap to navigate similar cases in the future.
To read the full judgment, please click here.
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