Freezing orders are a vital tool to preserve assets when there is a dispute, but the courts in Jamaica will only grant a freezing order if it can be shown that there is a real risk that the other party will disperse the assets to avoid a judgment debt.
The expert commercial lawyers at top law firm ParrisWhittaker have substantial experience advising clients in Jamaica in relation to freezing orders and asset protection. In a notable case, a company subjected to a $513 million freezing order succeeded in having it discharged because of the lack of evidence against it.
What is a freezing order?
Freezing orders – also called freezing injunctions – are temporary court orders preventing someone from disposing of assets. Freezing orders were previously known as Mareva injunctions. They are frequently obtained during the course of commercial litigation and are an important tool used to preserve assets until a judgment debt is satisfied.
A freezing order may be granted prior to the trial or at any stage of a claim, including after judgment is obtained. Importantly, a judgment does not have to be from the domestic court only.
The court may grant a freezing order if it’s just and convenient. However, if you’re seeking an order we will have to show on your behalf that:
- You have at least a credible claim against the other party
- They own assets in this jurisdiction, and
- There is a significant risk of their dissipating of assets before you secure a final judgment.
In October 2020, the court in Jamaica1 imposed a number of orders, including a freezing order on $513m worth of property and assets against the Petroleum Company of Jamaica (PCJ). The orders were made in the course of proceedings involving the purported non-performance of agreements for the sale of land.
The PCJ appealed and sought to have the freezing order discharged. However, the claimant argued that the Supreme Court did not have jurisdiction to hear the application as the order had been obtained ex parte and the substantive matter was pending appeal before the appeal court.
In February 2021, the Jamaican Court of Appeal ruled that the Supreme Court did have jurisdiction to consider the PCJ’s application in these circumstances.
The following month, the Supreme Court allowed the application to discharge the freezing order. It ruled that the claimant had not provided solid evidence to demonstrate that there was a real risk of the PCJ dissipating assets to deprive the claimant of “the fruits” of their judgment.
What does this mean?
Securing a freezing order can be vital if you’re seeking to protect assets over which you have a claim. But if you’re the subject of what you believe to be an unjust freezing order, the inconvenience and risk of financial hardship and reputation damage can be significant.
We routinely advise and represent clients who are considering seeking a freezing injunction or who need to challenge an order made against them. In many cases, our specialist lawyers can secure a variation or discharge of a freezing order.