The court set out the principles to be applied when considering cross undertakings in damages: ‘(1) Save in special cases an undertaking as to damages is the price which the person asking for an interlocutory injunction has to pay for its grant. The court cannot compel an applicant to give an undertaking but it can refuse to grant an injunction unless he does. (2) The undertaking, though described as an undertaking as to damages, does not found any cause of action. It does, however, enable the party enjoined to apply to the court for compensation if it is subsequently established that the interlocutory injunction should not have been granted. (3) The undertaking is not given to any party enjoined but to the court. (4) In a case where it is determined that the injunction should not have been granted the undertaking is likely to be enforced, though the court retains a discretion not to do so.’ Although if a defendant successfully applied for such an injunction to be discharged, the court would normally make an order for an enquiry as to damages, the making of such an order was a matter of discretion and not of right.
Neill LJ, Gibson LJ
 4 All ER 276
England and Wales
Cited – Commissioners of Customs and Excise v Barclays Bank Plc ComC 3-Feb-2004
The claimant had obtained orders against two companies who banked with the respondent. Asset freezing orders were served on the bank, but within a short time the customer used the bank’s Faxpay national service to transfer substantial sums outside . .
Lists of cited by and citing cases may be incomplete.
Updated: 16 May 2022; Ref: scu.192634