When Does an Undertaking To Refrain From Enforcement Differ From a Non-Enforcement Agreement?

In March 2025, the English High Court in Segulah Medical Acceleration AB anors v Tripathi anor¹ ruled that a British Virgin Islands (BVI) injunction obtained against JJE Properties (JJE) was not in violation of an undertaking that the claimants provided when awarded a worldwide freezing order (WFO).

As is usual with WFOs, the undertaking stipulated that the claimants would not enforce the WFO or seek a similar order outside of England and Wales, without the court’s permission.

The judgment also considered the extended definition of property as outlined in the WFO.

Both are the subject of our review and analysis.

Background

The claimants brought proceedings against the defendants alleging deceit and seeking rescission of a share sale agreement, and restitution as remedies. The claimants secured a WFO². WFO’s are interim injunctions, used to restrain a business (or individual) from disposing of, or dealing with its assets, up to a certain value.

When awarded the WFO, the claimants made two key undertakings, that they would not:

1. use any information obtained as a result of the WFO, for the purpose of any other proceedings (the collateral use undertaking (CUU)), without the court’s permission; or
2. seek to enforce the WFO, or seek an order of a similar nature, in any country outside of England and Wales, without the court’s permission (the non-enforcement undertaking (NEU)).

The WFO included a provision prohibiting the first defendant from disposing of, dealing with, or diminishing the value of any investments (or other assets acquired with the sale proceeds). This prohibition applied to the first defendant’s shares or any other interest in JJE, as well as a property in London owned by JJE (The Property). The first defendant was the sole shareholder of JJE, and the property was held by JJE rather than directly by the first defendant.

The claimants were concerned that the WFO provided insufficient protection against dissipation of the first defendant’s assets. As JJE was incorporated in the BVI, the claimants applied to the BVI courts for an order preventing disposal of The Property, and any changes to JJE’s share capital or constitution. In relation to this order, the claimants sought permission under the Civil Procedural Rules (PD 57A) to ‘break’ the CUU, but did not seek permission in relation to the NEU.

Legal Issues

The BVI proceedings

1. How does the BVI interpret WFOs?
   
   The BVI courts recognise the importance of WFOs but do not directly enforce foreign orders. Instead, they can grant independent freezing relief in support of foreign proceedings under BVI law (section 24A of the Eastern Caribbean Supreme Court Act). This enables the BVI courts to grant orders preserving assets located within the jurisdiction in support of the enforcement of judgments obtained abroad.
   
   Consistent with common law principles established in England, the BVI courts may grant relief where there is a good arguable case, a real risk of dissipation, and the order is just and convenient – reflecting the jurisdiction’s robust and proactive stance on cross-border asset protection.
2. What happened in the BVI hearing
   
   Concerns that the English WFO did not provide adequate protection against the risk of dissipation, particularly in relation to shares held in JJE, prompted the claimants to seek injunctive relief from the BVI court.
   
   The claimants did not seek to enforce the WFO but invited the BVI court to exercise its independent injunctive jurisdiction to grant interim relief in support of the foreign proceedings.
   
   In support of their application, the claimants sought to rely on information obtained through the WFO. This required prior permission from the English court for collateral use, which the claimants’ obtained on a without notice basis.
   
   The BVI court granted the injunction in substantially the form requested, restraining the defendants from dissipating or dealing with JJE’s assets or making alterations to its share capital or constitution. Although initially granted on a without notice basis, JJE subsequently consented to the continuation of the injunction.
   
   The BVI court characterised the relief as being designed to “firm up” the protections offered by the WFO without purporting to enforce it directly. This relief was later challenged by the first defendant in England through a set aside application, as discussed below.

The English High Court Proceedings

The first defendant applied for (1) a declaration to set aside the order giving the claimants permission to use information obtained in relation to the WFO, for the purposes of legal proceedings in the BVI; (2) a declaration that the claimants’ application for an injunction in the BVI represented a breach of the NEU; and (3) steps to be taken to discharge the BVI injunction.

Ultimately, the first application to set aside the CUU was refused, and Richards J held that the claimants had not acted in breach of the NEU when obtaining the BVI injunction.

The Extended Definition of Property (The Extended Definition)

The ‘Extended Definition’ defines the property against which the WFO applies. In this case, the claimants submitted that The Property was not caught by the Extended Definition, despite the WFO explicitly applying to the defendants’ shares (or any other interest) in JJE, and The Property in London. The submission was made on the following basis:

1. The Property was owned by JJE, a company outside of the jurisdiction, against whom the WFO was not enforceable (the WFO only being enforceable against the first defendant);
2. The Property was not a ‘Respondent’s Asset’, because it was owned by JJE and it, therefore, did not fall within the scope of the Extended Definition; and
3. The Property did not provide the first defendant with any scope to effect disposal of assets, as the Defendant did not own the property.

In relation to issue i) the first defendant did not own The Property, and its economic interests in The Property could be diluted if shares were issued to others, without necessarily involving any ‘disposal’ resulting in a breach of the WFO’s.

The second issue ii), was supported by the judgment in Lakatamia³, where the English Court of Appeal determined that the Extended Definition is only concerned with assets held beneficially by a defendant, and a controlling shareholder or director (such as the first defendant in this case) has no authority to instruct a company as to how it should deal with it. Therefore, Richards J held that The Property did not fall within the Extended Definition.

And in relation to issue iii), The Property was not the first defendant’s asset and was therefore held not to be an asset that would be available to satisfy any judgment.

Consequently, the court concluded that The Property did not fall within the Extended Definition contained in the WFO.

The Non-Enforcement Undertaking

The court then considered whether the claimants’ application for an injunction in the BVI represented a breach of the NEU that prohibited them from enforcing the WFO outside of England and Wales (or from seeking an order of similar nature), without the permission of the court.

The claimants argued that they did not seek permission from the court prior to seeking the BVI injunction, as the application to the BVI court was not for recognition or enforcement of the WFO. Rather, it was an application inviting the BVI court to exercise its own discretionary power to make a separate order imposing obligations on JJE directly.

The primary issue in this case was whether the BVI injunction was an ‘order of a similar nature’ to the WFO. If this question was answered in the affirmative, then the claimants would have been in breach of the NEU when they applied for the BVI injunction.

So, what does ‘an order of similar nature’ mean in this context?

In Bankas Snoras⁴, the English court looked at the ambiguity of the wording and determined that an order in breach of the NEU would be one that is similar in nature or effect to an order enforcing a WFO, rather than being similar to the WFO itself.

Was the BVI injunction an order similar in nature or effect to an order enforcing a WFO?

Having established in Bankas Snoras that an NEU is not applicable to a situation where the foreign court is exercising its own independent jurisdiction, the principal question became whether the BVI injunction (despite any similarities that may exist) depended on the WFO’s existence, or whether it could exist independently.

The court followed the decision in LMAA Arbitration E, F and G v M and others⁵ and held that the BVI injunction would not be regarded as being ‘similar’ to an order for enforcement of the WFO, due to the BVI injunction representing the exercise of the BVI’s own statutory jurisdiction to grant relief.

Therefore, the court considered that the BVI injunction was not obtained in breach of the NEU.

Key Takeaways

This judgment supports the precedent set in Lakatamia, determining that the Extended Definition is only concerned with assets held beneficially by a defendant. Property held by virtue of a defendant’s position as a shareholder or director of a company will not fall within this definition as the defendant would not have control over how the company disposes or otherwise of its assets. This is a key consideration of which parties need to be aware when seeking a WFO – i.e. to ensure that the order covers all property with which the claimant is concerned, or to ensure that a separate order is sought against the company owning the property in question.

The judgment also considered that, where the defendant does not directly own the property, that property would not be available to satisfy a judgment. Therefore, parties should consider whether there are other assets against which a judgment could be satisfied.

In relation to the NEU, this judgment supports foreign orders being sought where they are not similar in nature or effect to an order enforcing an English WFO. This is good news for claimants.

Danica Douglas, Disputes Knowledge Management Paralegal, assisted in the preparation of this briefing.

Footnotes

1. [2025] EWHC 632 (Ch)
2. Previously known as a Mareva Injunction, (named after a case in which this firm acted, and which celebrates its 50th anniversary this year).
3. Lakatamia Shipping Co Ltd v Su [2015] 1 WLR 291
4. Bankas Snoras AB v Antonov and others [2018] EWHC 887 (Comm)
5. LMAA Arbitration E, F and G v M and others [2013] EWHC 895 (Comm) (LMAA)