Key Facts
- •Claimants purchased shares in Signifier Medical Technologies Limited relying on representations by Mr. Tripathi that Ms. Kent was the beneficial owner.
- •Subsequently, Claimants discovered Mr. Tripathi received almost all proceeds from the share sales.
- •Claimants rescinded the share sale agreements and claim misrepresentation.
- •Claimants also claim they were misled regarding subsequent investments (Series D and E).
- •Claimants seek restitution and/or damages totaling approximately £10,122,646.48.
- •Application for a without-notice proprietary injunction to restrain Mr. Tripathi from dealing with the proceeds of sale.
Legal Principles
Court's power to grant injunctions under Section 37.1 of the Senior Courts Act 1981.
Section 37.1, Senior Courts Act 1981
Requirements for a freezing order: good arguable case, real risk of dissipation, assets against which judgment could be enforced.
Convoy v Broad Idea [2023] A.C. 389 at [101]
Test for a good arguable case (two approaches discussed): 'more than barely capable of serious argument' or aligned with jurisdictional gateway test.
Unitel SA v Unitel International Holdings BV [2023] EWHC 3231 (Comm), Ninemia Maritime Corp v Trave Schiffahrtsgesellschaft GmbH (The ‘Niedersachsen’) [1983] 2 Lloyd’s Rep 600, Lakatamia Shipping Company Ltd v Morimoto [2019] 2 All ER (Comm) 359, Brownlie v Four Seasons Holding Inc [2018] WLR192
Test for real risk of dissipation: objective assessment of likelihood of asset dissipation.
Fundo Soberano de Angola v Dos Santos [2018] EWHC 2199 (Comm) at [86], Lakatamia Shipping Company Ltd v Morimoto [2019] 2 All ER (Comm) 359
Test for assets on which an order could bite: good arguable case or grounds for belief that assets exist.
Ras al Kaimah Investment Authority v Bestford [2018] 1WLR 1099 at paragraph 39
Considerations for justice and convenience in granting a freezing order, including intrusiveness.
Holyoake v Candy [2018] CH 297 at paragraph 45
Principles for a proprietary injunction: serious issue to be tried, balance of convenience, justice and convenience.
American Cyanamid, Madoff Securities v Raven [2012] 2 EWHC 1637 (Ch) at [128]
Constructive trust arising from rescission of contract due to fraudulent misrepresentation.
Shalson v Russo [2003] EWHC 1637 (Ch) at paragraph 122
Outcomes
Granted a worldwide freezing order against Mr. Tripathi.
Court found a good arguable case of misrepresentation, real risk of dissipation of assets, and sufficient grounds to believe Mr. Tripathi holds assets within and outside the jurisdiction.
Granted a proprietary injunction.
Court found a good arguable case for a constructive trust over the proceeds of the share sales, satisfying the American Cyanamid criteria.
Damages relating to Series E investment excluded from initial calculation.
Insufficient evidence of reliance on misrepresentations for the Series E investment.