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15 April 2021
A notification injunction is an alternative to the conventional freezing order that is available where there is concern that a respondent may deal with their assets so as to frustrate the enforcement of any future judgment. This new breed of quia timet 'notification' injunction does not prevent the disposal of or dealings with assets, but instead requires a respondent to give an applicant prior notice before the defendant can dispose of or deal with its assets.
Notification injunctions are granted as an alternative to a freezing order, where the grounds for a freezing order are made out but the court prefers to order a less intrusive form of relief and does not consider a freezing order to be necessary. However, the value of a notification injunction is plain as once notice has been given of an intention to dispose of or deal with assets, the plaintiff may then decline consent or seek further relief, such as a freezing order, from the Cayman court.
The Cayman court has confirmed that it has jurisdiction to grant a notification injunction (ArcelorMittal v Essar (unreported, Grand Court, 29 to 30 May 2019), Kawaley J, relying on the Court of Appeal of England and Wales authority of Holyoake v Candy  Ch 297).(1)
The criteria which must be met by a plaintiff seeking a notification injunction is the same as the criteria for a freezing injunction, as follows:
the intrusiveness of relief will be a highly relevant factor when considering the overall justice and convenience of granting the proposed injunction. Hence, even if there is solid evidence of a real risk of unjustifiable dissipation, an applicant should consider what form of relief a court is likely to accept as just and convenient in all the circumstances, including the scope of the exceptions to the prohibition on dispositions.(3)
An applicant should therefore carefully consider what form of relief (ie, a notification injunction versus a freezing order) the court is likely to accept as being just and convenient in all of the circumstances
The decision of ArcelorMittal therefore helpfully confirms that the Cayman court will grant notification injunctions, as an alternative to a freezing order, in appropriate cases where the grounds for a freezing order are made out but a less intrusive remedy is desired.
In ArcelorMittal, the judge ultimately refused the application for a notification injunction on the grounds that there was presently no serious issue to be tried on the merits and it was not therefore just and convenient to grant the relief sought. However, the judge did note that his findings were subject to being revisited if the applicant could show an arguable case on the merits.(4)
Where such injunction is granted, it is the act of asset disposal or dealing itself which would be in breach of the notification injunction rather than the omission to give advance notice. This distinction is important as the consequence is that providing late notice may be insufficient to cure the breach of the injunction.
Overall, the evolution of the freezing order jurisdiction in this regard is to be welcomed: it represents a further weapon in the Cayman court's arsenal to assist litigants, particularly in fraud and asset tracing cases, to prevent the frustration of judgments.
For further information on this topic please contact Jennifer Fox or Oliver Green at Ogier's Grand Cayman office by telephone (+1 345 949 9876) or email (firstname.lastname@example.org or email@example.com). Alternatively, contact Anna Snead at Ogier's London office by telephone (+44 1481 752301) or email (firstname.lastname@example.org). The Ogier website can be accessed at www.ogier.com.
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