Permission granted to enforce worldwide freezing order with protections for respondent

Ingrida Jakuseva

In Arcadia Petroleum Ltd v Bosworth, the High Court granted permission for steps to be taken in Switzerland and Lebanon to enforce a worldwide freezing order (WFO) against defendants, who were alleged to have committed widespread fraud. The judgment illustrates how the Dadourian guidelines (established in Dadourian Group International Inc v Simms and others [2006] EWCA Civ 399) are applied in practice.

The defendants were, in the main proceedings, appealing an unsuccessful challenge to the English courts’ jurisdiction and an application to set aside the WFO. They therefore argued that the claimant’s application to enforce the WFO was premature. They also argued that such enforcement would give the claimant an unfair advantage as the remedies sought in Switzerland and Lebanon were in rem (rather than in personam) and thus gave superior relief to the WFO.

The court decided that, as matters stood, it had jurisdiction and the claimant needed the protection of a WFO. There would be a real benefit to the claimants in allowing local enforcement, and no real harm to the defendants.

The judge decided that it was necessary to build in certain protections for the defendant to ensure that the permission operated in a fair and proportionate way. These protections were:

  1. The order should spell out the steps which the claimant had been given permission to take in Switzerland and Lebanon so that the scope of the permission was clear. If the claimants wish to take further steps, they will need to seek the permission of the court to do so.
  2. The claimant should give an undertaking that the benefit of the undertakings contained in the WFO would apply equally to any third party notified of the order in Switzerland or Lebanon.
  3. If the defendants’ appeal on jurisdiction succeeded, or the WFO was set aside, then the claimant must undertake to take whatever steps are necessary to undo any enforcement steps that they have taken in Switzerland or Lebanon.
  4. The claimant must undertake to indemnify the defendants for any reasonably incurred costs in connection with the undoing of any such steps.
  5. The claimant must undertake to co-operate to ensure that the defendants get the benefit of the exceptions and protections available to them in the WFO, namely, the exceptions relating to living expenses and legal costs.

It was particularly relevant that the freezing order had been made in the context of alleged serious fraud and there was a risk of dissipation of assets by the defendants.

Arcadia Petroleum Ltd and others v Bosworth and others [2015] EWHC 3700 (Comm)

Post By Ingrida Jakuseva (4 Posts)

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