Liberty to apply for damages in existing proceedings: third-party relief following discontinued injunction
A recent Commercial Court decision offers helpful guidance for businesses whose interests may be affected by injunctions issued in proceedings they are not party to.
In BB Energy (Gulf) DMCC v Republic of South Sudan & Others [2025] EWHC 3490 (Comm), the court was asked to decide whether non-named third parties allegedly impacted by an interim injunction could seek damages within those proceedings.
Background
The application arose out of a dispute between BB Energy (Gulf) DMCC (‘BB Energy’) and the Republic of South Sudan (‘RSS’) and others concerning contractual obligations relating to a cargo of crude oil. In the course of the proceedings, BB Energy obtained an interim injunction restraining RSS from disposing of the cargo or accepting pre-payments for it. BB Energy cross-undertook to compensate RSS or a named third party if the court later found that the injunction had caused them loss. The injunction also provided that other non-named third parties served with or notified of the injunction could apply to vary or discharge it.
Non-named third parties (the “interveners” – persons not a party to legal proceedings before the court) claimed the injunction directly affected their interests and applied to the court to discharge it. By the time of the return date, BB Energy had agreed to withdraw its injunction application. The interveners then sought liberty to apply within the proceedings to bring claims (which were not yet particularised) against BB Energy for losses allegedly caused by the grant of the interim injunction.
The court granted the interveners liberty to apply.
The application of the interveners
BB Energy and the interveners agreed that the court had the power to grant the application of the interveners pursuant to the general case management powers of the court (under CPR 3.1(2)(p)) and its inherent jurisdiction. The interveners argued, alongside other factors, that requiring them to commence fresh proceedings or seek joinder to the on-going proceedings under CPR 19.2 would be procedurally burdensome.
BB Energy resisted the application, arguing, amongst other things, that third parties who suffer loss as a result of an injunction that is later discontinued have no automatic right to redress and that established procedural routes – such as issuing fresh proceedings (with, as required here, consequent service-out requirements) or applying for joinder – should be followed, particularly in circumstances where no coherent claim is particularised.
Key issues
The court was required to consider:
- Whether interveners could be granted liberty to apply for damages within ongoing proceedings between the claimant and defendants.
- Whether such liberty could be granted where no express undertaking had been given in favour of the interveners.
- Whether granting liberty to apply would impermissibly circumvent the usual procedural requirements for commencing proceedings or applying for joinder.
The approach of the Court and analysis
The Commercial Court adopted a pragmatic approach. It held:
- The claims the interveners wished to pursue were directly connected to the injunction.
- Given that the injunction envisaged third parties, like the interveners, applying to vary or discharge it, it was appropriate that those same parties should be permitted to seek such relief as they might be entitled to as a result of the injunction having been granted. The absence of an express undertaking in favour of the interveners was not treated as determinative.
- Granting liberty to apply could, in effect, bypass the usual procedural requirements applicable to the commencement of proceedings or joinder under CPR 19.2. However, it considered that strict adherence to those routes could leave the interveners without any realistic remedy for loss caused by an order of the court.
- Granting liberty to apply was consistent with the overriding objective, enabling potentially affected parties to seek redress efficiently and without unnecessary duplication of proceedings.
Importantly, the court emphasised that it was not deciding whether the interveners had a viable claim against BB Energy. The application (and decision) concerned only the procedural mechanism by which such claim could be brought before the court.
Significance
The decision highlights the flexible approach of the Commercial Court to protecting the interests of interveners whose rights may be affected by interim injunctions. It confirms that, in appropriate cases, the court will prioritise access to an effective remedy over strict procedural formality.
As such, parties seeking interim injunction relief and providing consequent cross-undertakings, should be mindful that doing so may leave them more easily open to claims for loss under the cross-undertakings from third parties not expressly envisaged in the cross-undertaking. This includes where those third parties may ordinarily have been required to comply with service out requirements.
How we can help
If you’re looking for expert advice on complex commercial or corporate disputes, the Forsters team is here to help. Visit our Commercial and corporate disputes page for more information.
