The Power of Injunctions – avoiding a trial

9 February, 2018

Injunctions are often called the Nuclear bomb exploding‘nuclear weapons’ of litigation.  A recent case concerning the disclosure of documents shows the power that injunctions can have.

In this case party A sought an injunction to require the disclosure by Party B of documents relating to a proposed share sale.  They had already issued a claim to require disclosure from Party B but the outcome of the trial of this claim would be too late as it would take place after the sale.  Party B objected to the injunction as in effect Party A was asking the court to give them the documents they wanted without a full trial.

The Court of Appeal considered the basic principles in relation to granting injunctions and concluded that the court should consider the degree of likelihood of Party A succeeding in its claim at trial and apply the balance of convenience test (i.e. would one party suffer more as a result of the injunction being granted or not granted).

Party B argued that the documents were being sought for an improper purpose and a trial should be held so that a judge could properly consider all the facts.  Party A disputed this and pointed out that by then it would be too late for Party A to use the documents.

It was held that the balance of convenience was with Party A and the documents should therefore be disclosed.  They had properly sought disclosure of these documents to enable them to challenge the sale of the shares before this process was completed.   As Party A had good grounds to establish that they were entitled to such documents, the balance of convenience lay with them.  The injunction was therefore granted.

This was obviously a good result for Party A as they obtained the documents they wanted without the need for a trial.  From the perspective of Party B it was a harsh outcome as they were deprived of an opportunity to properly argue their case at trial. 

What it clearly does is illustrate that in the right circumstances an injunction really can be a nuclear weapon in your arsenal.

The case in question is Global Gaming Ventures (Group) Limited v Global Gaming Ventures (Holdings) Limited [2018] EWCA Civ 68.