Case Nos: CA-2025-001485 - [2025] EWCA Civ 1108

As is very well known, the House of Lords examined the principles to be applied in relation to the grant of interim (or “interlocutory”) injunctions in American Cyanamid Co v Ethicon Ltd [1975] AC 396 (“American Cyanamid”). Lord Diplock, with whom Viscount Dilhorne and Lords Cross, Salmon and Edmund-Davies agreed, said this about the function of such an injunction at 406:

“The object of the interlocutory injunction is to protect the plaintiff against injury by violation of his right for which he could not be adequately compensated in damages recoverable in the action if the uncertainty were resolved in his favour at the trial; but the plaintiff’s need for such protection must be weighed against the corresponding need of the defendant to be protected against injury resulting from his having been prevented from exercising his own legal rights for which he could not be adequately compensated under the plaintiff's undertaking in damages if the uncertainty were resolved in the defendant’s favour at the trial. The court must weigh one need against another and determine where ‘the balance of convenience’ lies.”

Expanding on that at 408, Lord Diplock said:

“[T]he governing principle is that the court should first consider whether, if the plaintiff were to succeed at the trial in establishing his right to a permanent injunction, he would be adequately compensated by an award of damages for the loss he would have sustained as a result of the defendant’s continuing to do what was sought to be enjoined between the time of the application and the time of the trial. If damages in the measure recoverable at common law would be adequate remedy and the defendant would be in a financial position to pay them, no interlocutory injunction should normally be granted, however strong the plaintiff’s claim appeared to be at that stage. If, on the other hand, damages would not provide an adequate remedy for the plaintiff in the event of his succeeding at the trial, the court should then consider whether, on the contrary hypothesis that the defendant were to succeed at the trial in establishing his right to do that which was sought to be enjoined, he would be adequately compensated under the plaintiff’s undertaking as to damages for the loss he would have sustained by being prevented from doing so between the time of the application and the time of the trial. If damages in the measure recoverable under such an undertaking would be an adequate remedy and the plaintiff would be in a financial position to pay them, there would be no reason upon this ground to refuse an interlocutory injunction.”

“It is where there is doubt as to the adequacy of the respective remedies available to either party or to both”, Lord Diplock said at 408, “that the question of balance of convenience arises”. “Where other factors appear to be evenly balanced it is a counsel of prudence to take such measures as are calculated to preserve the status quo”, Lord Diplock commented at 408, going on to explain:

“If the defendant is enjoined temporarily from doing something that he has not done before, the only effect of the interlocutory injunction in the event of his succeeding at the trial is to postpone the date at which he is able to embark upon a course of action which he has not previously found it necessary to undertake; whereas to interrupt him in the conduct of an established enterprise would cause much greater inconvenience to him since he would have to start again to establish it in the event of his succeeding at the trial.”

At 409, Lord Diplock observed that “[t]he extent to which the disadvantages to each party would be incapable of being compensated in damages in the event of his succeeding at the trial is always a significant factor in assessing where the balance of convenience lies”.

When assessing whether a successful defendant “would be adequately compensated under the [claimant’s] undertaking as to damages”, it is relevant to ask whether the claimant would be able to meet any liability which might arise under the undertaking. In Morning Star Co-operative Society Ltd v Express Newspapers Ltd [1979] FSR 113, Foster J said at 118, “where the damage cannot be quantified and it is clear that the plaintiff is unlikely to be able to pay any appreciable damages, no interlocutory relief should be given”. In National Commercial Bank Jamaica Ltd v Olint Corpn Ltd [2009] UKPC 16, [2009] 1 WLR 1405 (“Olint”), Lord Hoffmann, delivering the opinion of the Privy Council, identified “the extent to which [the claimant or defendant] may be compensated by an award of damages or enforcement of the cross-undertaking” and “the likelihood of either party being able to satisfy such an award” (emphasis added) as amongst the matters which the Court may take into account when deciding whether to grant an interim injunction.

The fact that an applicant would not have the means to discharge an award on the cross-undertaking is not invariably fatal to an application for an interim injunction, however. In Allen v Jambo Holdings Ltd [1980] 1 WLR 1252, Lord Denning MR said at 1257:

“I do not see why a poor plaintiff should be denied a Mareva injunction just because he is poor, whereas a rich plaintiff would get it. One has to look at these matters broadly.”

In Belize Alliance of Conservation Non-Governmental Organisations v Department of the Environment of Belize [2003] UKPC 63, [2003] 1 WLR 2839, Lord Walker, delivering the judgment of the Privy Council, noted at paragraph 39 that the decision in Allen v Jambo Holdings Ltd had “ had the result that in England a very large class of litigants (that is, legally assisted persons) are as a matter of course excepted from the need to give a cross-undertaking in damages” and explained that “their Lordships … do not think that it can be taken too far”, but expressly did so “without casting any doubt on the practice initiated by that case”. “The court is never exempted from the duty to do its best, on interlocutory applications with far-reaching financial implications, to minimise the risk of injustice”, Lord Walker said. In Olint, Lord Hoffmann had pointed out in paragraph 17 that “[t]he basic principle is that the court should take whichever course seems likely to cause the least irremediable prejudice to one party or the other”.

Where the enforceability of a cross-undertaking is open to doubt, the Court may require the applicant to fortify its undertaking by providing security. Calver J said this about such fortification in PJSC National Trust Bank v Mints [2021] EWHC 1089 (Comm):

“26.

It was common ground between the parties that it is a matter for the Court’s discretion as to whether or not to order fortification of an undertaking given by a claimant as the price for it obtaining freezing injunctive relief. In exercising that discretion, the Court will have regard to the principles set out in Energy Venture Partners Ltd v Malabu Oil & GasLtd [2015] 1 WLR 2309 (CA) at [52]-[54] (‘Malabu Oil’) as follows:

i.

The applicant for fortification must show a good arguable case for it, and does not have to prove the need for fortification on a balance of probabilities (Malabu Oil at [52]-[53]).

ii.

In considering whether to exercise its discretion to order fortification, the Court will take the three criteria – which are inextricably linked factors – into account (Malabu Oil at [53], applied in Phoenix Group Foundation v Cochrane [2018] EWHC 2179 (Comm) at [14] (‘Phoenix Group’)):

(a)

Can the applicant show a sufficient level of risk of loss to require (further) fortification, which involves showing a good arguable case to that effect?

(b)

Can the applicant show, to the standard of a good arguable case, that the loss has been or is likely to be caused by the granting of the injunction?

(c)

Is there sufficient evidence to allow an intelligent estimate of the quantum of the losses to be made?

27.

As for the correct approach in relation to the three criteria:

Can the applicant show a sufficient level of risk of loss?

i.

In showing a sufficient level of risk of loss, the mere assertion of risk is insufficient. As Gee on Commercial Injunctions (7th Ed.) puts it, ‘there must be some real evidence, which objectively establishes that risk’ (paragraph 11-029), citing JSC Mezhdunarodniy vPugachev [2015] EWCA Civ 139 at [98]-[99], to which I would add Popplewell J in Phoenix Group at [18] and Mr. Briggs QC in Harley Street Capital Limited v Tchigirinski [2005] EWHC 2471 (Ch) at [33] (‘Harley Street Capital’). I consider that there does indeed have to be a solid, credible evidential foundation that the claimed loss has been or will be suffered, particularly where the loss is said to be that of a third party.

Is the loss caused by the grant of the injunction?

ii.

In relation to the causation element:

(a)

It is for the party seeking to enforce the undertaking to show that the damage he has sustained would not have been sustained but for the order/injunction ….

(b)

In order to show that the loss would not have been suffered ‘but for’ the injunction, the applicant must show that the freezing order and the undertakings were an effective cause of the third party’s loss: [SCF Tankers Ltd v Privalov [2017] EWCA Civ 1877] at [42] ….

(c)

It is only loss which is caused or would have been caused by the preventative or, as the case may be, coercive effect of the injunction that is recoverable under the cross-undertaking: Harley Street Capital at [22] ….

(d)

If the loss would have been suffered regardless of the granting of the injunction, for example because of the bringing of the proceedings, then that is not covered by the undertaking ….

Is there sufficient evidence to allow an intelligent estimate of the quantum of the losses to be made?

iii.

Again, in my judgment, there must be some solid, credible evidence of future losses (or of losses having been suffered). I would adopt the general approach to this issue of Popplewell J in Phoenix Group at [18]. The claim to have suffered loss ought ordinarily to be supported by some underlying material and ought not to be speculative. Without documentary evidence, a mere generalised assertion of loss will be scrutinised carefully by the Court and is unlikely to be sufficient.”

Mr Andrew Thompson KC, who appeared for Yodel and JLL with Mr Ben Griffiths, observed that the applications for injunctions made by Shift and Corja are highly unusual. As he pointed out, Shift and Corja are seeking neither freezing orders nor injunctions to restrain allegedly wrongful conduct: their case is not that the “transformation plan” which Yodel wishes to pursue is itself unlawful in some way but that they would want to take a different approach if they were given the shares to which (they say) they are entitled. However, Mr Jack Rivett, who appeared for Shift and Corja, argued that Morgan J granted injunctive relief in comparable circumstances in Dilato Holdings Pty Ltd v Learning Possibilities Ltd {2015] EWHC 592 (Ch), [2015] 2 BCLC 199 and that the decision of the Privy Council in Convoy Collateral Ltd v Broad Idea International Ltd [2021] UKPC 24, [2023] AC 389 confirms the breadth of the Court’s jurisdiction to grant injunctions.

What matters for present purposes is that Mr Thompson did not go so far as to dispute that the Judge had jurisdiction to accede to Shift’s and Corja’s applications. Mr Thompson suggested that, given the unusual nature of what was being sought, the principles established in American Cyanamid were not directly applicable. However, he did not identify any specific respect in which a different approach should be (or should have been) adopted and accepted that the question whether the American Cyanamid principles are in point as such is unlikely to matter in this case.

It was common ground between the parties that the circumstances in which this Court will interfere with a decision by a judge, in the exercise of his discretion, to grant or refuse an interim injunction are limited. In that connection, Mr Rivett referred us to A.E.I. Rediffusion Music Ltd v Phonographic Performance Ltd [1999] 1 WLR 1507, where Lord Woolf MR said at 1523 that the “conventional approach” to challenges had been “conveniently summarised” by Stuart-Smith LJ in Roache v News Group Newspapers Ltd [1998] EMLR 161, at 172, in these terms:

“Before the court can interfere it must be shown that the judge has either erred in principle in his approach, or has left out of account, or taken into account, some feature that he should, or should not, have considered, or that his decision is wholly wrong because the court is forced to the conclusion that he has not balanced the various factors fairly in the scale.”

For his part, Mr Thompson cited Hadmor Productions Ltd v Hamilton [1983] 1 AC 191, where Lord Diplock, with whom Lords Fraser, Scarman, Bridge and Brandon agreed, said at 220:

“An interlocutory injunction is a discretionary relief and the discretion whether or not to grant it is vested in the High Court judge by whom the application for it is heard. Upon an appeal from the judge’s grant or refusal of an interlocutory injunction the function of an appellate court, whether it be the Court of Appeal or your Lordships’ House, is not to exercise an independent discretion of its own. It must defer to the judge’s exercise of his discretion and must not interfere with it merely upon the ground that the members of the appellate court would have exercised the discretion differently. The function of the appellate court is initially one of review only. It may set aside the judge’s exercise of his discretion on the ground that it was based upon a misunderstanding of the law or of the evidence before him or upon an inference that particular facts existed or did not exist, which, although it was one that might legitimately have been drawn upon the evidence that was before the judge, can be demonstrated to be wrong by further evidence that has become available by the time of the appeal; or upon the ground that there has been a change of circumstances after the judge made his order that would have justified his acceding to an application to vary it. Since reasons given by judges for granting or refusing interlocutory injunctions may sometimes be sketchy, there may also be occasional cases where even though no erroneous assumption of law or fact can be identified the judge's decision to grant or refuse the injunction is so aberrant that it must be set aside upon the ground that no reasonable judge regardful of his duty to act judicially could have reached it. It is only if and after the appellate court has reached the conclusion that the judge’s exercise of his discretion must be set aside for one or other of these reasons, that it becomes entitled to exercise an original discretion of its own.”

The issues to which the appeal gives rise can be considered under the following headings: