Mex Group Worldwide Ltd v Ford & Ors [2026] EWHC 629 (KB): Cross-Undertaking Damages and the "Weaponisation" of Freezing Orders
Detailed Assessment — 2026-03-17
Griffiths J orders inquiry as to damages under cross-undertaking, holding that all effects of a weaponised freezing order are recoverable including reputation damages.
Overview
Date: 17 March 2026
Judge: Mr Justice Griffiths
Nature of Proceedings: Application for inquiry as to damages under cross-undertaking following discharge of worldwide freezing order
Key Issues:
- The default rule on enforcing cross-undertakings when the claimant's case fails
- Whether damage caused by the "weaponisation" of a freezing order is recoverable
- Recoverability of reputation damages on an inquiry as to damages
- The threshold for ordering an inquiry: arguable case on causation
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The Facts
Mex Group Worldwide Limited obtained a worldwide freezing order against twelve defendants before Lavender J, without notice, on 20 October 2023. The order was obtained in support of proceedings initiated in Scotland, which began with "dawn raids" at the Edinburgh residence and offices of the Second and Seventh Defendants. The claimant gave the usual cross-undertaking in damages as a condition of obtaining the order.
The Scottish proceedings were subsequently abandoned on 7 March 2025 for what Lord Sandison described as "no demonstrably satisfactory reason." In the related Scottish judgment (Mex Group Worldwide Ltd v Ford and others [2025] CSOH 39), Lord Sandison found that the defendants "might well subjectively have regarded the litigations as a device to influence the progress of the ongoing BVI action and as advancing claims which it was never intended to make good." He awarded the equivalent of full indemnity costs in favour of the defendants.
The worldwide freezing order had already been discharged against the Fourth, Ninth and Tenth Defendants by the Court of Appeal (Mex Group Worldwide Ltd v Ford and others [2024] EWCA Civ 959), which found that the claimant's failure to make full and frank disclosure included "deliberate omission." Those criticisms went to the heart of the application as a whole and undermined the basis for relief against all defendants. The order was eventually set aside against the remaining applicants by Stacey J on 18 September 2025.
Freedman J had already ordered an inquiry as to damages for the Third and Eighth Defendants (Mex Group Worldwide Ltd v Ford and others [2025] EWHC 2689 (KB)). The First, Second and Seventh Defendants — Mr Ford, Mr Cormack and Regal Consultancy International Limited — now sought the same relief.
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The Weaponisation of the Freezing Order
The most striking feature of this case was the claimant's conduct in the final days before the freezing order was discharged. The day before the Court of Appeal handed down its judgment discharging the order against the Fourth, Ninth and Tenth Defendants — a judgment the claimant would have seen in draft — its solicitors notified the Frankfurt Stock Exchange, the Vienna Stock Exchange, bond custodians and listing agents of the worldwide freezing order against the applicants. This notification had not been given in the nine months since the order was originally obtained.
Griffiths J drew the "reasonable and compelling inference" that this step was taken "to cause maximum damage" at a point when the claimant knew the weapon of the freezing order would soon be unavailable. He asked the claimant's leading counsel whether there was any other explanation in the evidence or arguments. There was not. The judge characterised the notifications as having "the appearance of an act of spite committed just at the point that the Respondent realised...that the worldwide freezing orders could not be sustained for much longer."
The consequences were severe. Following the notifications, the Frankfurt Stock Exchange delisted the bonds, the Vienna Stock Exchange refused to list bonds, no new bond issuances were available, and the listing agents resigned. The applicants' evidence was that this prevented the generation of income from bond issuances — a business that had shown "a pattern of steady and sustainable growth" with US$7.3 million invested across three fiduciary estates in 2023 alone, falling to US$3.9 million in 2024 and just US$1.1 million in 2025.
Importantly, the damage was not limited to the stock exchange notifications. Mr Cormack's evidence was that the freezing order had caused harm even before those notifications, because counterparties conducting routine due diligence and onboarding checks would discover it. In his experience, "once a freezing order is known to counterparties, it affects credit perception, counterparty risk assessment, and compliance approval." Regal had suspended active marketing of products while the legal uncertainty persisted.
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The Default Rule: Inquiry as to Damages
Griffiths J set out the well-established two-stage approach. The first question is whether the cross-undertaking ought to be enforced at all. The second — to be addressed at a subsequent hearing if the first is answered in the affirmative — is what losses the defendant has suffered.
The default position was stated by Cotton LJ in Griffith v Blake (1884) 27 Ch D 474:
> "the rule is, that whenever the undertaking is given, and the plaintiff ultimately fails on the merits, an inquiry as to damages will be granted unless there are special circumstances to the contrary."
The judge confirmed that "special circumstances" are required to refuse an inquiry. Examples from the authorities include undue delay, inequitable conduct by the defendant, or cases where the court is satisfied no damages have been suffered. The threshold at the first stage is low: the applicant need show only "an arguable case on causation" (Malhotra v Malhotra [2014] EWHC 113 (Comm)).
The claimant resisted the inquiry on three grounds: that the evidence was speculative and uncorroborated; that certain heads of loss were irrecoverable in principle; and that the applicants' conduct should disentitle them to relief.
Griffiths J rejected each argument. The applicants' evidence was "specific, and exhibits some documentation in support." It was "sufficient" — brevity being "not a fault, even in a commercial case." The claimant had "not achieved the difficult task of showing it should be disregarded by way of a knock out initial blow by which even an inquiry is dispensed with."
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All Effects of the Freezing Order Are Recoverable
A key question was whether the applicants' recoverable loss was limited to damage caused by the restraining effects of the freezing order — that is, the restriction on dealing with assets — or whether it extended to all consequences of the order, including damage caused by its weaponisation through the stock exchange notifications.
Griffiths J held that all effects were recoverable in principle:
> "I am not attracted by an argument, on the facts of this case, that only damage attributable to the restraining effects of the orders, as opposed to all the effects of the order, including the effect of what has fairly been described in the Sandison Judgment as its weaponisation, should be recovered."
This is significant. The claimant's argument would have ring-fenced the most damaging conduct — the deliberate notification to stock exchanges timed to cause maximum harm — as falling outside the scope of the cross-undertaking. The judge rejected that distinction. If the damage flowed from the order, whether through its direct restraint or through its weaponisation, it was in principle compensable.
The judge also rejected the argument that the applicants' losses were irrecoverable "reflective loss" — that is, losses suffered by a shareholder that merely mirror losses sustained by the company. Griffiths J found that the loss alleged was to the applicants themselves as a result of revenues they would otherwise have earned not within CSM, but from CSM, through their contractual arrangements as lead introducer (Regal) and bond originator (Mr Ford).
The measure of damages follows Lord Diplock's formulation in Hoffmann-La Roche & Co AG v Secretary of State for Trade and Industry [1975] AC 295: the assessment proceeds as if the undertaking were a contract that the claimant would not prevent the defendant from doing what the injunction restrained. McCombe LJ's qualification in Abbey Forwarding Ltd v Hone (No. 3) [2015] Ch 309 permits "logical and sensible adjustments" because there is in truth no contract — the court is compensating for loss caused by an injunction wrongly granted.
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Reputation Damages
Mr Cormack claimed that his reputation had suffered as a result of the worldwide freezing order, damaging his professional relationships and his ability to obtain non-executive directorships — including roles he had previously held with Heart of Midlothian PLC.
Griffiths J confirmed that such losses are recoverable in principle, applying Abbey Forwarding v Hone (No. 3) [2015] Ch 309 where Vos LJ stated:
> "general damages can in an appropriate case be awarded on a cross-undertaking in respect of an inappropriately obtained freezing order for any or all of these elements: upset, stress, loss of reputation, general loss of business opportunities, and general business and other disruption including adverse effects of the inappropriate policing of the injunction on the injunctees."
The question of whether such loss had in fact been suffered, and the appropriate quantum, was left to the inquiry itself.
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Discretion: "General Attacks on Character" Are Irrelevant
The claimant's final argument was an appeal to the court's general discretion not to order an inquiry. It pointed to Mr Ford's Financial Conduct Authority fine and ban, suggested that the other applicants were "tarred with the same brush," and argued that the claims were extravagant.
The claimant also argued that the applicants should have sought discharge of the freezing order sooner and that their "holding position" amounted to "a total capitulation." Griffiths J disagreed: "A holding position is not a capitulation." He noted that it was the claimant which had failed to maintain the order or establish the underlying cause of action. On the related argument that negotiating terms of discharge had taken too long, the judge was equally direct: "It was open to the Respondent to discharge the injunctions at any time. The Respondent obtained them, and the Respondent is responsible for the consequences of maintaining them."
Griffiths J's response to the character attack was emphatic:
> "General attacks on character do not seem to me to be relevant to the exercise of the discretion. Everyone is entitled to the benefit of the law and the protection of the courts; they are not only available to those of good character. Only inequitable conduct in the context of the litigation should be taken into account when the discretion is exercised."
This is a useful statement of principle. The claimant's attempt to paint the applicants as undeserving of the court's protection — based on prior regulatory findings unrelated to the litigation — was firmly rejected. The discretion to refuse an inquiry is narrow and must be anchored in the defendant's conduct within the proceedings themselves.
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Key Takeaways
For Litigation Practitioners
1. The default rule is powerful — Where a claimant obtains a freezing order, gives a cross-undertaking, and then fails to maintain the injunction or establish the underlying cause of action, an inquiry as to damages will be ordered unless there are special circumstances. The threshold at the first stage is low: an arguable case on causation suffices.
2. Weaponisation expands the scope of recoverable loss — Damage caused by a claimant's deliberate exploitation of a freezing order — such as notifying stock exchanges or counterparties — is not excluded from the cross-undertaking merely because it does not flow from the order's direct restraining effect. Practitioners obtaining freezing orders should be aware that all consequences of the order may sound in damages if the injunction is later discharged.
3. Timing of notifications matters — The court drew a powerful adverse inference from the fact that notifications were sent the day before the Court of Appeal discharged the order. Solicitors acting for claimants should carefully consider whether and when to publicise a freezing order, particularly where its continuation is in doubt.
For Costs Lawyers
1. Indemnity costs in the Scottish proceedings — Lord Sandison's award of the equivalent of full indemnity costs in the abandoned Scottish proceedings provides useful context. Where proceedings are abandoned for "no demonstrably satisfactory reason" and have been used as a vehicle for dawn raids and freezing orders, the costs consequences are severe.
2. Cross-undertaking damages are assessed on contract principles — The Hoffmann-La Roche measure, as qualified by Abbey Forwarding, means damages are assessed broadly as if for breach of contract, with room for adjustment. This includes lost profits, business disruption and — in appropriate cases — reputation damages.
3. Reflective loss arguments may not apply — Where defendants claim losses from revenues they would have earned from a company (e.g. under contractual fee arrangements) rather than losses suffered within the company as shareholders, the reflective loss bar does not apply. This distinction is important when structuring claims on an inquiry.
4. Reputation damages are available in principle — Following Abbey Forwarding v Hone, general damages for loss of reputation and business opportunities are recoverable on a cross-undertaking. This head of loss should not be overlooked when advising defendants on the scope of an inquiry.
5. Character attacks will not defeat an inquiry — A claimant cannot resist an inquiry by pointing to a defendant's general bad character or prior regulatory findings. Only inequitable conduct in the litigation itself is relevant. This limits the scope for satellite disputes designed to delay or derail the inquiry process.
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Conclusion
Mex Group Worldwide Ltd v Ford is a significant decision on the consequences of obtaining — and then losing — a worldwide freezing order. The judgment reinforces the strength of the default rule that an inquiry as to damages will follow where the claimant fails, and it establishes that the scope of recoverable loss is not limited to the direct restraining effects of the order. Where a claimant weaponises a freezing order — timing notifications to stock exchanges for maximum damage on the eve of discharge — the resulting losses are in principle recoverable under the cross-undertaking.
For defendants subjected to freezing orders that are subsequently discharged, the decision confirms that the cross-undertaking provides broad protection. For claimants and their advisors, it serves as a stark warning: a freezing order is obtained subject to a cross-undertaking, and the court will hold the claimant to that undertaking. The more aggressive the deployment of the order, the greater the potential liability when it falls away.
The inquiry as to damages in this case — when it takes place — will be closely watched. Given the evidence of bond delistings, lost income, and reputational harm, the sums at stake are substantial. The judgment of Griffiths J ensures that the applicants will have their opportunity to prove that case.
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Citation: Mex Group Worldwide Ltd v Ford & Ors [2026] EWHC 629 (KB)
Full judgment available at: BAILII
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