## Facts

- Certain insolvent companies in liquidation, including SIB Ltd. (the companies), brought claims in deceit and related causes of action against Vwagh.
- The companies produced evidence suggesting Vwagh used a web of English and foreign companies and trusts to conceal his beneficial interest in assets located in England, with the aim of keeping those assets beyond the reach of any judgment obtained by the liquidators.
- The alleged arrangements included companies whose shares were held by nominees and trusts that did not name Vwagh as a beneficiary, but gave trustees a power to appoint him as a beneficiary later, while Vwagh was said to retain practical control over the entities.
- On an interlocutory application, the lower court granted relief in the Mareva (freezing) form, restraining Vwagh from disposing of or dealing with assets held in his name and assets held through the relevant corporate and trust structures said to represent his wealth.
- The lower court also ordered extensive disclosure requiring Vwagh to give detailed information about his financial holdings and his interests in, and control of, the companies and trusts said to hold English assets.
- Vwagh appealed. He argued that the court had gone beyond the proper scope of a Mareva injunction and ancillary disclosure by effectively treating him as a judgment debtor and by reaching property held by third parties (companies, trustees, and potential co-owners).
- Vwagh also objected that (i) the disclosure was premature because he said he would have given information voluntarily, (ii) the disclosure and restraint were too wide because some entities allegedly had co-owners with substantial interests, and (iii) the disclosure required a burdensome worldwide investigation.
- In response to the point about minority interests and co-ownership, the companies agreed to limit the disclosure (and associated restraint) to entities over which Vwagh had direct or indirect substantial or effective control.

## Issues

1. Whether, on an interlocutory application, the court may grant a Mareva injunction that restrains a defendant from disposing of assets held through companies and trusts where there is evidence that the defendant has substantial or effective control and is using the structure to put assets beyond creditors’ reach.
2. Whether such relief requires proof that the relevant companies or trusts are complete shams, or whether the court may look past formal legal ownership for the limited purpose of making interim protection effective.
3. Whether the court may order wide ancillary disclosure about the defendant’s interests in, and control of, corporate and trust entities, and how the scope should be limited to avoid unfairness to entities with genuine third-party ownership.

## Decision

- The Court of Appeal dismissed the appeal and upheld the grant of freezing relief and ancillary disclosure, subject to the limitation accepted by the companies.
- The court accepted that, on the evidence, there was a sufficient basis for interim relief to prevent the frustration of any judgment where assets were said to be held through companies and trusts that the defendant substantially controlled.
- The court was prepared, for the purpose of interlocutory protection, to look past the formal separation of companies and trusts where necessary to prevent the court’s process being defeated by arrangements used to conceal beneficial ownership.
- The court treated the agreed limitation as significant: the disclosure (and the reach of the restraint) was confined to entities over which Vwagh had direct or indirect substantial or effective control, addressing concerns about compelling disclosure of mere minority interests or affecting entities with genuine co-owners.
- The court rejected the submission that these interim orders improperly assumed final liability or final ownership; they were protective measures aimed at preserving the position pending trial.

## Legal Principles

- A freezing (Mareva) injunction may be framed to prevent a defendant from disposing of assets that are, in substance, under the defendant’s control, even where legal title sits in companies or trusts, if the evidence shows a real risk that the structure will be used to defeat enforcement.
- For interlocutory freezing relief, the court may look past formal corporate and trust arrangements where required to ensure its orders are effective; the focus is on control and the risk of assets being placed beyond reach, not only on strict legal title.
- The court may order ancillary disclosure as an incident of freezing relief where disclosure is needed to identify, locate, and police the assets that are the true target of the restraint.
- The scope of disclosure and restraint should be limited to what is necessary to protect the claimed remedy, including limiting relief to entities over which the defendant has direct or indirect substantial or effective control, so as to reduce the risk of unfairness to genuine third-party owners.
- Interlocutory freezing and disclosure orders do not convert the defendant into a judgment debtor; they are provisional measures to preserve assets and prevent evasion until the substantive claims are determined.

## Conclusion

Re A Company Ltd; SIB Ltd. v. Vwagh upheld interim freezing and disclosure orders against a defendant alleged to have used companies and trusts to hide English assets from creditors, confirming that the court may, where necessary to ensure effective protection, look past formal ownership and require targeted disclosure tied to entities the defendant substantially or effectively controls.


Re A Company Ltd; SIB Ltd. v. Vwagh, [1985] BCLC 333, [1985] 1 BCC 99 at 421 (1985)