Mr Justice Bright has provided a useful reminder as to the hurdles that need to be overcome to secure a freezing order in Unitel SA v Unitel International Holdings BV & Anor [2023] EWHC 3231.

Introduction

In a judgment handed down shortly before Christmas, Mr Justice Bright granted a worldwide freezing order in favour of the Claimant, Unitel S.A. (“Unitel”) over £580m of the assets of the Second Defendant, Ms Isobel Dos Santos (“Ms Dos Santos”). In doing so, he provided helpful commentary as to the requisite tests that need to be satisfied, as well as identifying certain aspects that he considers ripe for guidance from the Court of Appeal.

Background

Ms Dos Santos, the daughter of Angola’s former president and who has been described as being Africa’s richest woman, is being sued in England by telecoms firm Unitel, which is registered in Angola. The first defendant to the substantive claim alongside Ms Dos Santos is Unitel International Holdings B.V. (“UIH”), an entity registered in the Netherlands which Ms Dos Santos controls.

In 2012 and 2013, Unitel made a series of loans to UIH totalling cEUR323m and USD43m (“the Loans”). Ms Dos Santos was a director of Unitel at the relevant time, and was also the beneficial owner of one of four equal 25% shareholders of Unitel. The Loans have not been repaid and Unitel alleges that the Loans were uncommercial (owing to low interest rates and an absence of significant security) and arranged for the benefit of Ms Dos Santos personally, in breach of her duties as a director. She denies this, and argues that these proceedings are a political campaign against her by the current government of Angola.

Since late 2019 / early 2020, UIH stopped paying interest on the Loans and Unitel gave notice of the Loans being in default in September 2020, demanding repayment of them. Since October 2022, Unitel has been in the effective control of the Angolan state.

The underlying claim was originally only against UIH. In October 2022 an application was made by Unitel to add Ms Dos Santos as an additional defendant, with the freezing order application filed at the same time. The joinder application was decided in May 2023 and resulted in Ms Dos Santos being added as a defendant. Having been added as a defendant, Ms Dos Santos filed her evidence in response to the freezing order application in October 2023. As noted in the judgment, various freezing orders have been obtained by the Angolan government against Ms Dos Santos between December 2019 and November 2020, and also by Unitel in the Netherlands and Portugal (both in September 2020).

Key considerations

In deciding whether to freeze an additional £580m of Ms Dos Santos’s assets, there were three hurdles that Unitel would need to overcome:

1. Have a good arguable case on the merits.
2. Show there was a real risk, judged objectively, that a future judgment would not be met because of an unjustified dissipation of assets.
3. Demonstrate that it would be just and convenient in all the circumstances to grant the order.

Good arguable case

This was the main battleground. Unitel argued that the meaning of the term “good arguable case” was as explained in Ninemia Maritime Corp v Trave Schiffahrtsgesellschaft GmbH (The ‘Niedersachsen’) [1983] 2 Lloyd’s Rep 600 as being “one which is more than barely capable of serious argument, but not necessarily one which the judge considers would have a better than 50% chance of success”. Ms dos Santos argued that Lakatamia Shipping Co Ltd v Morimoto [2019] EWCA Civ 2203 had changed the test (at least in the context of a freezing order application), such that the test to be applied by the court should follow the authorities of what it has been held to mean in a jurisdictional context. In short, she argued, this meant that the court must try to form a view as to which party has the better of the argument, for which a three-part test had come to be accepted (as originally set out in Brownlie v Four Seasons Holdings Inc [2018] 1 WLR 192):

1. The claimant must supply a plausible evidential basis for the application of the relevant jurisdictional gateway.
2. If there is an issue of fact about that, or some other reason for doubting such a basis applies, the court must take a view on the material available if it can reliably do so.
3. However, the nature of the issue at (2) may be such that no reliable assessment can be made, in which case there is a good arguable case for the application of the jurisdictional gateway if there is a plausible (albeit contested) evidential basis for it.

Ultimately, the judge preferred the approach in Ninemia, as contended for by Unitel. He found the fact that a leading textbook on commercial injunctions cited this case as identifying the appropriate test (and explicitly ruling out the use of the jurisdictional line of authority in an injunction context) persuasive. However, in reaching this conclusion, he did express concern that the law is “in a confused state, which cries out for a definitive answer from the Court of Appeal”.

Having established the appropriate test, the judge had to consider whether it was satisfied here. One of the points raised by Ms Dos Santos in her defence was the claim against her was ‘out of time’, pursuant to Article 80(1) of the Angolan Commercial Companies Law. Expert reports on the point were filed by both sides and the judge ultimately concluded – albeit with some hesitation given that the point would ultimately be determined at trial, where the judge would have the benefit of oral testimony from both experts – that Unitel did have a “good arguable case” on the point.

Ms Dos Santos’s other arguments on the merits were considered to be “makeweight” points by the court, that in reality went to the amount of any freezing order rather than the merits of granting one.

Risk of dissipation

Here, the law was clearer and not in dispute between the parties. Unitel argued that there was a risk of dissipation, and that the core allegation in the underlying claim related to what the judge described as the “wrongful alienation of a huge amount of money”. The judge considered it particularly significant that Ms Dos Santos had been the subject of a judgment dated 15 June 2023 by the Amsterdam Court of Appeal. That judgment was highly critical of Ms Dos Santos (and others) in upholding the first instance judgment, which found that Ms Dos Santos “knowingly and deliberately used forged documents to extract very substantial amounts of money”. The judge did not accept Ms Dos Santos’s written submissions in these proceedings that she was not represented before the Amsterdam Court of Appeal and did not participate in those proceedings out of choice.

Furthermore, the fact that the application had been made on notice, and that Ms Dos Santos had not taken steps to dissipate her assets despite knowing of the application, did not affect the judge’s conclusion that there was a real risk that she might take such steps in the future.

Just and convenient

Ms Dos Santos argued that a further freezing order would serve no real purpose given the existence of other freezing orders against her. However, the judge pointed out that most of the freezing orders already in place had been obtained by the Angolan state (in Angola, Portugal and the Isle of Man) and that it was “far from clear” that these orders will remain in force (and if they were to be discharged, there was no reason to think Unitel would be given advanced notice of that). The judge felt it was “highly desirable” that Ms Dos Santos should disclose her assets in circumstances where the position was not clear, and ultimately considered that the granting of the freezing order was just and convenient.

The decision

On the basis that Unitel had overcome the three hurdles, the court ordered that £580m of the assets of Ms Dos Santos be frozen.

Conclusion

In addition to the point raised above regarding potential Court of Appeal guidance, the judge also expressed concern about assessing a merits point (here, the Angolan law relating to limitation periods) that was ultimately for the trial judge. He raised the spectre of a proliferation of expert reports at an interlocutory stage in a bid to ‘win’ the ‘good arguable case’ debate, which in turn could lead to much longer hearings. Such a scenario would be unfair to other court users at a time when the court’s resources are already stretched.

Ultimately, the decision provides a helpful reminder of the tests that an applicant will need to overcome when seeking a freezing order of this nature. Whether or not the Court of Appeal will take up Mr Justice Bright’s invitation to provide some clarity on the appropriate tests in this area remains to be seen.