By a Judgment handed down on 30 September 2024 the Court of Appeal dismissed an appeal by Ms Isabel dos Santos against a worldwide freezing order (WFO) and a consequential costs order granted against her by Bright J on 20 December 2023.
The Judgment provides welcome clarity in the wake of conflicting authority on the proper approach to the merits threshold for obtaining a freezing injunction, and also confirms the approach to be taken on costs.
The underlying claim
Proceedings were issued on 26 October 2020 by Unitel S.A. (Unitel), owned and controlled by the Angolan state, against Unitel International Holdings B.V. (UIH), owned and controlled by Ms dos Santos, on the basis of defaults on loans which were made by Unitel to UIH in the amounts of €322,979,711 and $43,000,000.
On 3 October 2022 Unitel applied to join Ms dos Santos personally to the claim and applied on notice for a WFO against her, which was granted by Bright J with costs awarded to Unitel. Permission to appeal was granted by Arnold LJ on 12 March 2024.
The issues on appeal
The Court of Appeal decided two issues arising out of the WFO:
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- What is the meaning of “good arguable case” for purposes of the merits threshold for the grant of a freezing injunction, and was the Judge correct to find that Unitel had a good arguable case?
- Is there a general rule that costs in a freezing inunction application should be reserved?
The “good arguable case” test
The first question before the Court was whether the “good arguable case” element of the three-stage test for a freezing injunction continues to follow the approach taken by Mustill J in Ninemia Maritime Corp v Trave Schiffahrtsgesellschaft GmbH (“The Neidersachsen”) [1983] 2 Lloyd’s Rep 600 at [605], or whether subsequent authority has brought the test in line with that applied to jurisdictional gateway applications.
Per Mustill J in The Neidersachsen, a “good arguable case” is “. . . one which is more than barely capable of serious argument, but not necessarily one which the judge considers would have a better than 50 per cent chance of success”. More recent authority, however, suggests that the effect of the Court of Appeal’s decision in Lakatamia Shipping Co. Ltd. v Morimoto [2019] EWCA 2203, at [38] per Haddon-Cave LJ, may have been to align the approach with the relative approach taken in the context of jurisdiction in Kaefer Aislamientos SA de CV v AMS Drilling Mexico SA de CV [2019] EWCA Civ 10.
In Kaefer, Green LJ gave guidance, at [72] – [80], on how to apply the jurisdictional gateway test first articulated by Lord Sumption in Brownlie v Four Seasons Holdings Inc [2017] UKSC 80: in deciding whether a relevant jurisdictional gateway applies, the Court must try to form a view as to which party has “the better of the argument”, and only if the Court finds itself unable to come to a conclusion on the evidence before it, should the Court consider whether there is “a plausible (albeit contested) evidential basis” for the applicant’s case.
Ms dos Santos’ position on appeal was that the Court in Morimoto, which dealt with both jurisdiction and a WFO, changed the law such that the formulation in The Neidersachsen has given way to the test articulated by Green LJ in Kaefer. Thus, on Ms dos Santos’ case, Bright J should have considered which party had “the better of the argument” and ought to have concluded that Ms dos Santos had the better of the argument on that particular issue (which turned on a point of Angolan law on which the Court heard expert evidence).
To that proposition, the Court gave a clear and unambiguous answer: the “good arguable case” test for a freezing injunction as set out in The Neidersachsen remains good law. For this, the Court gave a number of reasons:
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- There have been developments in the law on jurisdictional gateways and freezing injunctions, and although the phrase “good arguable case” is used in both situations, there is no reason why what has been described judicially as “an inherently flexible concept” should have the same meaning in both situations;
- The merits threshold for obtaining a freezing injunction is low, relatively speaking, given that the Court will determine the merits of a freezing injunction at trial, whereas the Court will only need to consider whether a case falls within one of the jurisdictional gateways at the application stage and the matter will not be revisited at trial;
- It would be difficult for the Court, at the early stage at which a freezing injunction is typically sought (often pre-disclosure), to determine which party has “the better of the argument” – that endeavour could result in the Court conducting a ‘mini-trial’;
- The weight of authority supports the application of The Neidersachsen – the test has been approved by the Court of Appeal and consistently applied in several cases since; it has been endorsed in the context of Chabra jurisdiction (on third party freezing orders) and has been adopted in a number of Commonwealth jurisdictions.
However, in preserving The Neidersachsen, the Court clarified that “good arguable case” in the context of freezing injunction applications should be assimilated with “serious issue to be tried” in the context of the American Cyanamid test for interlocutory injunctions, which has itself become synonymous with the “real prospects of success” test on applications for summary judgment.
Against that backdrop, the Court held on the first ground of appeal that it was impossible to say that Unitel did not satisfy the test in The Neidersachsen.
The position on costs
The second aspect of Ms dos Santos’ appeal concerned the costs order made against her – she contended that the ordinary costs order in an interim injunction application is costs reserved, and there is no reason why a freezing injunction application should be treated any differently.
Dismissing that ground, the Court distinguished American Cyanamid interim injunction applications, in respect of which it will usually be more appropriate for costs to be reserved, on the basis that they are for purposes of “holding the ring pending the trial” – it may subsequently turn out that the right or obligation is or is not established. In the case of freezing injunctions, by contrast, if the applicant establishes that the three criteria are met, the Court will grant an injunction which is not “interim” in nature, nor dependent on the balance of convenience like American Cyanamid, and nor will the Court make the injunction “final” at trial. A further distinction, the Court said, is that unlike most American Cyanamid injunctions, a freezing order may have been correctly granted even where the claim fails at trial.
Comment
The merits threshold for freezing injunction applications is now considerably more certain following years of confusion: the test in The Neidersachsen remains good law, but “good arguable case” can be equated to “serious issue to be tried” as applied in American Cyanamid and summary judgment applications.
That effectively puts to bed earlier observations that “good arguable case” requires something more than “serious issue to be tried”, the latter having been viewed as a filter for frivolous or vexatious claims and thus too low a bar for freezing injunctions. Whether aligning the two will have any practical effect on an applicant’s ability to obtain a freezing order remains of course to be seen, but it seems unlikely that there will be a significant impact – the Court’s reasoning for equating the two was not to now condone a more lenient approach to freezing orders but to confirm that the test is not an unduly heightened one. That is a reflection of the fact that interlocutory injunctions, in respect of which “serious issue to be tried” is the merits test, can be equally as invasive as freezing orders – and so drawing a comparison between the two provides no reason to afford “good arguable case” more stringent a meaning than it deserves. Indeed, Flaux J (as he then was) suggested in earlier authority that “if there is any difference between the two tests, it is an imperceptible one” (Madoff Securities Ltd v Raven [2011] EWHC 3102 (Comm) at [145]). Unitel simply confirms that there is in fact no difference at all: a claim which is “more than merely arguable” (on summary judgment) is no different to one which is “more than barely capable of serious argument” under The Niedersachsen.
On costs, the crux is that it should not be presumed that costs on freezing injunction applications will be reserved. The general rule on costs, if there is one, “is that a party who contests an application and fights it tooth and nail on every point, thereby causing the successful party to incur costs which would not otherwise have been incurred, should be ordered to pay the successful party’s costs at the conclusion of the application”.
The full judgment is available here.
Further information
For more information from the stone team, contact clerks@36stone.co.uk

Involving Bethany Smith