On 30 September 2024, the Court of Appeal handed down a landmark judgment in Unitel S.A. v Isabel Dos Santos [2024] EWCA Civ 1109, upholding a £580 million worldwide freezing order granted by Bright J (discussed here) against the former President of Angola’s daughter, African businesswoman Isabel Dos Santos.

Paul Sinclair KC and Christopher Knowles acted for the successful respondent to the appeal (and successful applicant below), Unitel.

The judgment represents an authoritative return to the orthodox, long-standing merits threshold for granting freezing orders in The Niedersachsen, rejecting the approach adopted by a minority of first instance judges demanding the better of the argument on the merits. The Court emphasised the imperceptible difference between the merits test on a freezing injunction and that on a summary judgment application, and held that it would be preferable if the former were referred to as a “serious issue to be tried”.  It also rejected any suggestion that the costs of obtaining a contested freezing order should generally be reserved.

The dispute arose out of seven loans which Unitel, an Angolan telecoms company, made when Ms Dos Santos was a director of it, to a company she owned, UIH, in amounts totalling €322,979,711 and US$43,000,000, and which UIH has not repaid. Unitel alleged that the loans were uncommercial and Ms Dos Santos had procured them to benefit herself, in breach of her duties as a director. Ms Dos Santos denies that, and the substantive claim is ongoing.

The key issues on appeal were: (1) whether the ‘good arguable case’ merits test for granting a freezing order was the traditional test set out in The Niedersachsen, requiring more than arguability but not more than a 50% chance of success, or that in the authorities on jurisdictional gateways such as Brownlie and Kaefer requiring the better of the argument, or if the judge could not form a reliable view on who had that, a plausible evidential basis; (2) whether, whatever the test was, it was met; and (3) whether the judge was right to order Ms Dos Santos to pay Unitel’s costs of the worldwide freezing order.

Unitel argued that:

  • Here, the good arguable case merits test was that set out in The Niedersachsen.
  • Unitel had, on the evidence so far, a good arguable case, however the test was characterised.
  • The judge was right to order Ms Dos Santos to pay Unitel’s costs of obtaining the worldwide freezing order, following a 2-day hearing, in the face of fierce resistance. There was no rule in favour of reserving the costs of obtaining a contested freezing order.

Upholding Bright J’s order, in a detailed judgment, the Court of Appeal (Sir Julian Flaux C, Popplewell LJ and Falk LJ) unanimously found that:

  • The merits threshold for granting a freezing order was that in The Niedersachsen. It was not the test in the authorities on jurisdiction requiring the better of the argument. To the extent some first instance judgments suggested otherwise, they were wrong.
  • Any difference between The Niedersachsen test and the modern summary judgment test applied in the context of other interim injunctions was imperceptible. It would be preferable if the former test were referred to as a “serious issue to be tried”.
  • In any event, Unitel satisfied the merits threshold on either test – it had much the better of the argument on the merits.
  • There was no rule by which the costs of a contested freezing order application should be reserved. The judge was right to order Ms Dos Santos to pay Unitel’s costs.

A copy of the judgment can be found here.