No freezing injunction in support of foreign proceedings under section 25 of the Civil Jurisdiction and Judgments Act 1982 where the purpose is to circumvent the Proceeds of Crime Act regime for relief

Lalor-Harbord

Blue Holdings (1) Pte Ltd and Blue Holdings (2) Pte Ltd v United States was an appeal against a High Court decision to continue an interim freezing injunction which had been granted to the United States under section 25 the Civil Jurisdiction and Judgments Act 1982 (the “CJJA”) in support of forfeiture proceedings in the USA and which covered some of the applicants’ assets.

The injunction was continued on the basis that, even though a judgment in a US court would not be enforceable in rem or in personam in England at common law, it was an expedient way of maintaining the situation (or “holding the ring”) in light of the possibility that English enforcement authorities might bring proceedings under the Proceeds of Crime Act 2002 (External Requests and Orders) Order 2005 (the “POCA Order”) following judgment in the US proceedings.

The Court of Appeal allowed the appeal, holding that:

  • An applicant for a freezing order under section 25 of the CJJA had to satisfy the court that: (1) the relief sought was in respect of civil proceedings brought outside the jurisdiction; (2) the applicant had a good arguable case in those proceedings; (3) there was a real risk that in the absence of a freezing order the assets would be dissipated so that a judgment in the foreign proceedings would go unsatisfied; and (4) it was expedient for the relief sought to be granted.
  • Whilst the High Court had been correct to hold that a US judgment would not be enforceable in the English jurisdiction at common law, it had made an error of law in concluding it was expedient to continue the injunction under section 25 of the CJJA in order to “hold the ring” until a US judgment could be lawfully enforced under the POCA Order. It was inexpedient to make an order given that:
    • the Proceeds of Crime Act 2002 and the POCA Order provided a comprehensive regime for the application by English enforcement authorities for prohibition and recovery orders to give effect to external requests by foreign authorities to secure the recovery of assets located in the UK necessary to implement foreign forfeiture, confiscation and other orders made in foreign proceedings in relation to the recovery of proceeds of crime; and
    • the UK enforcement authorities had expressly stated that they were not prepared to make an application for a prohibition order under the POCA Order.

The freezing injunction was therefore discharged.

Blue Holdings (1) Pte Ltd and Blue Holdings (2) Pte Ltd v United States [2014] EWCA Civ 1291

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