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Inside Disputes

Worldwide Freezing Injunction: clarification of the correct test for the existence of assets
Inside Disputes

Inside DisputesIssue 7 | September 2017

Date
06 September 2017

Naomi Simpson Managing Associate

The Court of Appeal has recently considered a case where Chabra worldwide freezing orders – a well-used tool of litigators, not only to secure assets to satisfy English judgments, but also in aid of foreign proceedings, pursuant to Section 25 of the Civil Jurisdiction and Judgments Act 1982 (CJJA)


Worldwide Freezing Injunction: clarification of the correct test for the existence of assets

The Court of Appeal has recently considered a case where Chabra worldwide freezing orders – a well-used tool of litigators, not only to secure assets to satisfy English judgments, but also in aid of foreign proceedings, pursuant to Section 25 of the Civil Jurisdiction and Judgments Act 1982 (CJJA) – were sought pursuant to the CJJA in the case of Ras Al Khaimah Investment Authority & Others v Bestfort Development LLP & Others [2017] EWCA Civ 1014. The Respondents over which the orders were sought were various English companies owned by the Defendant. The claims themselves were taking place in the UAE and Georgia. The case is most interesting because Longmore LJ allowed the appeal in part and in doing so clarified the law as to what the correct test was for the existence of assets.

It is well known that English Courts will not make orders if they are futile or cannot be complied with. At first instance Rose J refused the application, because in her opinion she had to be satisfied that each Respondent to the application had or was likely to have some assets somewhere in the world, and she considered there was insufficient evidence of assets onto which any freezing order could attach.

Longmore LJ clarified that the correct test for showing that the Respondents had assets that would be caught by the freezing order was that the Applicant had grounds for believing that assets existed and would be caught by the relief being sought. Longmore LJ then found that for certain of the Respondents they had 'not insubstantial assets' and there was no evidence a freezing order over those assets would be futile.

There is no need therefore to prove to the Court the precise detail of assets over which their powers are sought. Instead an Applicant must show that it has grounds for believing that assets exist and that the Court's weapon would be effective to freeze the assets.