The Last Rites For The Siskina?

• Published date: 05 October 2021
• Subject Matter: Corporate/Commercial Law, Litigation, Mediation & Arbitration, Corporate and Company Law, Contracts and Commercial Law, Trials & Appeals & Compensation, Shareholders
• Law Firm: Appleby
• Author: Mr Andrew Willins and Eliot Simpson

On 4 October 2021, the Judicial Committee of the Privy Council delivered its much anticipated decision in Broad Idea International Limited v. Convoy Collateral [2021] UKPC 24 (Convoy Collateral). Dissenting as to the reasoning but not the outcome, Sir Geoffrey Vos (with whom Lords Reed and Hodge agreed) described the decision of the majority as being "groundbreaking".

At issue in the appeal were two important questions:

1. Whether or not the Court has the power to grant injunctive relief in support of foreign proceedings.
2. Whether that power is exercisable against persons not subject to the territorial jurisdiction of the Court.

To answer both questions, Convoy sought to persuade the Privy Council that the decision of the House of Lords in Siskina (Owners of cargo lately laden on board) v Distos Cia Naviera SA [1979] AC 210 (the Siskina) was wrongly decided, and that the majority decision in Mercedes Benz v. Leiduck [1996] AC 284 was also wrong (Mercedes).

The Privy Council unanimously dismissed both of Convoy's appeals, holding that the decisions in Mercedes Benz and the Siskina should not be disturbed, and that the CPR should be interpreted consistently with them. However, the majority also considered that the logic which underpins the power of the Court to grant injunctive relief was misunderstood.

BLACK SWAN

Inevitably, all roads lead back to the seminal decision of the (then) newly established Commercial Court in Black Swan Investment ISA v Harvest View Ltd (BVIHCV 2009/399) (Black Swan). In Black Swan, Bannister J held that there was "high authority that in the absence of a provision to the effect of section 25 (of the UK Civil Jurisdiction and Judgments Act 1982) (the CJJA) the Court may not grant a freezing order in aid of foreign proceedings against a defendant who is not subject to the Court's in personam jurisdiction." But he also reasoned that the question of whether or not the Court should grant relief against a person that is subject to the Court's in personam jurisdiction, had been left open.

Bannister J considered that the lacuna could be filled in the BVI, by adopting the approach of Lord Nicholls in Mercedes: that in the case of a prospective money judgment, the Court should grant a freezing order over somebody subject to the Court's jurisdiction if the freezing order would facilitate enforcement.

That remained the position following the decision of the Court of Appeal in Yukos CIS Investments Ltd v Yukos Hydrocarbons Investments Ltd (HCVAP 2010/028) 26 September 2011 (Yukos). In Yukos, the Court of Appeal rejected an argument that Black Swan had been wrongly decided, and accepted the principle that an injunction could be granted against a resident of the BVI that controls assets against which a foreign judgment could be enforced.

The following decade saw repeated use of the Black Swan jurisdiction, and the decisions that emerged were mostly concerned with the outer limits of that jurisdiction - for example, whether or...