USA v Abacha & Ors
Whether it is expedient to grant a freezing injunction to aid a forfeiture claim in the US
Section 25 of the Civil Jurisdiction and Judgments Act 1982 gives the English courts the power to grant a freezing order in aid of foreign proceedings. The issue in this case was whether that included a forfeiture claim in the foreign court (namely, in this case, a claim that certain assets were derived from the proceeds of corrupt misappropriations and were therefore liable to forfeiture under a US statute).
Field J rejected an argument that the freezing injunction in question should not be continued because the US claim was a criminal, not a civil, proceeding (as required by section 25). The US claim did not involve the prosecution or sentencing of any individual in a criminal court (the “hallmarks” of criminal proceedings). Instead it was a claim for the vesting in the US government of property used in, or resulting from, certain crimes.
He also rejected an argument that it would not be expedient to continue the freezing order because a judgment in the US claim would not be enforceable in England in rem or in personam (because the property to be forfeited, and the person against whom the claim was made, were outside the US). Although the US claim would not be enforceable here, the application under section 25 was not an application to enforce a foreign judgment. Instead, it was an application to continue an order “designed to hold the ring until a judgment in the US Claim can be lawfully enforced” (under Part 5 of the Proceeds of Crime Act 2002 (External Requests and Orders) Order 2005)).
It was therefore expedient to continue the freezing order to aid the US claim: “Corruption, like other types of fraud, is a global problem and it and its consequences are only going to be dealt with effectively if there is co-operation and assistance not only between the governments of states but also between the courts of different national jurisdictions”.