Court finds that a risk of dissipation has been made out in worldwide freezing order application
The claimant applied to continue a worldwide freezing order ("WFO") in support of a proposed ICC arbitration in Switzerland. The judge accepted that the English court had had the power to make this order. He also rejected the defendants' criticism that the claimant's evidence had been in the form of an affidavit from its solicitor, and as such was only based on what the solicitor had been told by the claimant. The judge held that the undertaking in Schedule B to the WFO that "The Claimant will affirm and file an affidavit..." did not require an affidavit to be sworn by an officer of the company, rather than its solicitor, and this affidavit should be "an affidavit confirming the substance of what was said to the Court by the Claimant's advocate".
Various factors had been relied on by the claimant to prove a risk of dissipation. These had included:
- the fact that the defendants had not put forward any defence to the underlying case against them;
- the defendants' failure to engage with ICC ADR, in breach of a contractual requirement (on the "disingenuous ground" that there was no "dispute"); and
- unsatisfied county court judgments against one of the defendants (which the defendant had claimed had been caused in part by the premature cessation of financial support by the claimant).
The judge noted that the purpose of a freezing order is to prevent a defendant taking action "designed to ensure" that any judgment against the defendant is rendered less effective. Prior caselaw has found that "designed to ensure" does not mean "intended" but, rather, "having the consequence that". Relevant factors include the defendant's behaviour in response to the claim or anticipated claim.
The judge concluded that a risk of dissipation had been made out by the claimant. In so doing, he dismissed the defendants' concern that the claimant would notify the defendants' client of the WFO and that, as a public utility, that client would be obliged to cease commercial relations until the matter is resolved. The judge found that the claimant had only said that it would be entitled to tell the client, and had agreed that it would not act in an oppressive manner. The claimant also needed to know who the current client is in order to decide whether to enforce the injunction.
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