Court grants worldwide freezing order to aid enforcement of an arbitration award
The claimants sought a worldwide freezing order to aid enforcement of an arbitration award as a judgment of the court. The principal issue was whether a risk of dissipation of assets by the respondents had been established. Teare J held that it had for the following reasons:
(1) The tribunal had found that the owner of the respondents had used companies within his control to ensure that profits which ought to have been shared with the claimants were instead paid to the companies within his control. This was an action which deliberately harmed the interests of the claimants. Even though that activity had taken place between 2012 and 2013, it was not of "historical interest only" because the respondent had made strenuous efforts to challenge the award and clearly was not content with it. It did not matter that the tribunal did not expressly describe the respondents' activity as dishonest: "it is not necessary to describe the conduct of Mr. Grigorishin as dishonest in order to demonstrate that the required risk arises from the findings of the arbitrators".
(2) Transfers of assets carried out in order to avoid the effect of sanctions imposed on Russian-controlled companies by the Ukrainian government (rather than to make the respondents judgment-proof) also added to the risk of dissipation: "Notwithstanding the motivation for making the misleading statement, it appears to me that the action does demonstrate a lack of probity". Although the respondents were seeking to protect their business interests from harmful and discriminatory government action, there was a case for saying the discrimination was justified, and the actions had been a criminal offence in Ukraine.
The judge also found that the delay (of 6 months) in this case was not fatal because the claimants had been trying to obtain an order from the Cypriot courts in the intervening period and that demonstrated that they had been genuinely concerned about the risk of dissipation. Furthermore, prior caselaw demonstrated that "the policy of the law is to enforce judgments (and particularly so where the judgment enforces a London arbitration Award) so that freezing orders can, in an appropriate case, be granted after judgment".
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