Summary

An injunction restraining the defendants from denying that one or other of the claimants was their agent would not be granted where the claimants had failed to plead a cause of action justifying it.

Facts

The claimants (T) applied for an injunction restraining the defendants (C) from denying that one or other of the claimants was their agent, and for an injunction restraining C from conducting any foreign currency exchange or financial derivatives business in breach of Chinese law. C was a substantial foreign exchange dealer and market maker. T had business contacts in China. T and C had entered into agreements that appointed T as C's introducing broker for Chinese business. Relations between the parties eventually broke down, leading to C's solicitors writing to T requiring them to cease to hold themselves out as being C or any C affiliate. T did not reply to the letter and gave no notice to C when they applied for the injunctions. C argued that (1) T had shown no arguable cause of action for the injunction restraining them from denying that one or other of the claimants was their agent, and that in any event it was too uncertain in its extent. T argued that (2) the cause of action that justified the grant of the injunction restraining C from conducting any forex or financial derivatives business in breach of Chinese law was an implied term of the agreements between C and T requiring C to comply with applicable Chinese law.

Held

(1) In the instant case there was no clear pleading of a cause of action. With the exception of freezing injunctions and injunctions granted for the purpose of preserving evidence or otherwise protecting the process of the court, an injunction required a cause of action, The Siskina [1979] AC 210 considered. An injunction restraining a defendant from asserting a fact (or denying it) may be granted if the assertion or denial was alleged to be defamatory or to constitute a malicious falsehood. Neither was alleged in the instant case. The only undisputed contracts between the parties contained express prohibitions against T holding themselves out as C's agent. Furthermore, C had in the past reprimanded T for holding themselves out as representing C. The injunction sought was a serious infringement of the right of free speech and to grant it in the absence of the clearest legal right was inappropriate. In the circumstances and given the width and vagueness of the injunction sought, there was insufficient justification for granting it. (2) It was too simplistic to argue that an implied term was to be found because, if asked, the parties would have confirmed that they would comply with applicable Chinese criminal law. If that was a sufficient test, every contract would contain an implied term requiring the parties to comply with applicable criminal law. T had therefore failed to establish any arguable legal right justifying the grant of the injunction.

Applications refused.