Organic Grape Spirit Ltd v Nueva IQT, SL

Organic Grape Spirit Ltd v Nueva IQT, SL

The Court of Appeal held that OGSL's proposed business activities were not in the 'ordinary and proper course of business' due to the lack of an established trading pattern, but the judge at first instance erred in prohibiting OGSL from pursuing its business solely because it was speculative or risky. There was no finding of bad faith or impropriety, and the court should not restrain business activities merely due to risk. The appeal was allowed, and the prohibitions on developing the business were removed from the freezing order.

Parties
Appellant (defendant): Organic Grape Spirit Limited; Respondent (claimant): Nueva IQT, S. L.
Jurisdiction
England and Wales
Judgment Date
28 July 2020
Procedural Posture
Civil Appeal / Appeal From High Court Decision on Freezing Order
Outcome
Appeal allowed
Legal Topics
Freezing Orders, Mareva Injunctions, Business Transactions Under Injunction, Risk of Dissipation, Ordinary and Proper Course of Business
Civil Procedure Commercial Law Freezing Orders Mareva Injunctions Business Transactions Under Injunction Risk of Dissipation Ordinary and Proper Course of Business

Case Brief

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Parties

Organic Grape Spirit Limited

Appellant (defendant)

Nueva IQT, S. L.

Respondent (claimant)

Procedural Posture

Civil Appeal / Appeal From High Court Decision on Freezing Order

Legal Issues

  1. 1 Whether a company subject to a freezing order may pursue a fledgling business using disputed funds
  2. 2 Whether such expenditure is in the 'ordinary and proper course of business'
  3. 3 When the court should sanction business dealings outside the ordinary course under a freezing order

Ratio Decidendi

The Court of Appeal held that OGSL's proposed business activities were not in the 'ordinary and proper course of business' due to the lack of an established trading pattern, but the judge at first instance erred in prohibiting OGSL from pursuing its business solely because it was speculative or risky. There was no finding of bad faith or impropriety, and the court should not restrain business activities merely due to risk. The appeal was allowed, and the prohibitions on developing the business were removed from the freezing order.

Court Disposition

Appeal allowed

Orders

  • Paragraph 4(4) of the order of 30 March 2020 is deleted.
  • The word 'not' in the second sentence of paragraph 10(2) of the order is deleted.