Background
Apollo XI Limited advanced Nexedge Markets Limited a US$10 million unsecured loan. Nexedge, an FCA-regulated introducing broker, intended to use the funding partly to support an application to vary its regulatory permissions so that it could hold client money and offer professional clients direct trading and contracts-for-difference liquidity. After the parties’ relationship deteriorated, Apollo relied on a covert recording to obtain a freezing injunction without notice in April 2025.
The injunction was discharged in June 2025. The earlier court found serious failures by Apollo to provide full and frank disclosure, no good arguable case on the claim then advanced, no risk of dissipation, and no basis on which continuing the injunction would be just or fair. Apollo later abandoned that original claim and pleaded a different acceleration claim based on events occurring after the injunction’s discharge. Nexedge sought to enforce Apollo’s cross-undertaking in damages, alleging disruption and eventual failure of its FCA application, reputational harm, business disruption, and diversion of management resources.
The Court’s Holding
The Court granted Nexedge permission to enforce the cross-undertaking and ordered an inquiry into whether the freezing injunction caused compensable loss and, if so, in what amount. It did not determine that Nexedge had suffered any particular loss or award damages at this stage. The inquiry was to be case-managed and heard with the substantive claims and counterclaims.
The Court held that the strong rebuttable presumption favoring an inquiry following discharge of an injunction had not been displaced. Nexedge presented credible evidence supporting each asserted category of loss, including evidence that its regulatory application had been progressing, that the injunction affected the FCA’s consideration of the application, and that the injunction caused reputational and operational disruption. Apollo’s competing analysis raised matters for evidence and cross-examination at the inquiry, not a basis for disposing of the application through a mini-trial at the permission stage.
The Court also held that Nexedge had realistic prospects of showing either that Apollo could not invoke its own allegedly wrongful original claim to defeat causation or that the injunction and the original litigation were concurrent causes that could not realistically be separated. Apollo therefore failed to establish the special circumstance it asserted—that Nexedge had suffered no recoverable loss.
Key Takeaways
- When an interim injunction is discharged, the beneficiary of the cross-undertaking can ordinarily expect an inquiry into damages unless special circumstances justify refusal.
- At the permission stage, the applicant needs a credible, realistically arguable case that the injunction caused loss; the court should not conduct a detailed trial of causation or quantum.
- A freezing injunction need not be the sole cause of loss, and losses may remain recoverable where the injunction and the underlying proceedings operated concurrently.
Why It Matters
The decision emphasizes the practical force of a cross-undertaking in damages: it is not merely formal protection for the restrained party, particularly where an injunction was obtained without proper disclosure and later discharged. A claimant opposing enforcement faces a demanding task if its argument would require the court to resolve contested evidence prematurely.
The ruling also clarifies that permission for an inquiry is not a damages award. Nexedge must still prove causation, recoverability, and quantum—including its asserted loss exceeding £5 million—at the later inquiry.