Key Facts
- •Ricardo Salinas Pliego and Corporacion RBS SA de CV (Claimants) sought worldwide freezing and proprietary injunctions against Astor Asset Management 3 Limited and others (Defendants) following alleged fraudulent misrepresentations.
- •The Claimants alleged that Salinas was induced to transfer shares in Grupo Elektra (worth over US$400 million) as collateral for loans, which were subsequently misappropriated and sold by the Defendants.
- •The Defendants argued that they were entitled to trade the collateral under the Stock Loan Agreement (SLA) and that the Claimants delayed in seeking injunctive relief.
- •The Defendants applied to discharge the injunctions due to alleged breaches of the Claimants' duty of full and frank disclosure in obtaining the injunctions.
Legal Principles
Duty of full and frank disclosure in obtaining injunctive relief.
Various cases cited, including *Kazakhstan Kagazy plc v Arip* [2014] EWCA Civ 381, *The Electric Furnace Co v Selas Corporation of America* [1987] RPC 23, *Arcadia Energy Petroleum Ltd v Bosworth* [2017] EWHC 3160 (Comm), *Brink’s Mat Ltd v Elcombe* [1988] 1 WLR 1350, *OJSC ANK Yugraneft v Sibir Energy plc* [2008] EWHC 2614 (Ch), *Crown Resources AG v Vinogradsky* (unreported, 15 June 2001), *Madoff Securities International Ltd v Raven* [2011] EWHC 3102 (Comm), *JSC Mezhdunarodniy Promyshlenniy Bank v Pugachev* [2015] EWCA Civ 906, *Kingscroft Insurance v Nissan Fire & Marine Co* [2000] 1 All ER (Comm) 272, *SK Shipping Europe Ltd v Capital VLCC 3* [2022] EWCA Civ 23, *Property Alliance Group v Royal Bank of Scotland plc* [2018] 1 WLR 3529.
Implied representation of honesty in contractual dealings.
*Kingscroft Insurance v Nissan Fire & Marine Co* [2000] 1 All ER (Comm) 272; *SK Shipping Europe Ltd v Capital VLCC 3* [2022] EWCA Civ 23; *Property Alliance Group v Royal Bank of Scotland plc* [2018] 1 WLR 3529.
Standard for granting freezing injunctions; Risk of dissipation.
*Madoff Securities International Ltd v Raven* [2011] EWHC 3102 (Comm); *JSC Mezhdunarodniy Promyshlenniy Bank v Pugachev* [2015] EWCA Civ 906.
Outcomes
The Defendants' application to discharge the injunctions was dismissed.
The court found that the Claimants were not in breach of their duty of full and frank disclosure. The court considered the Claimants had a good arguable case for fraudulent misrepresentation, and any alleged non-disclosures were not sufficiently material to warrant discharging the injunctions. The court noted the urgency of the situation and the risk of asset dissipation.