In Belair LLC v Basel LLC – Butterworths Law Direct 7.4.09 two Georgian companies entered into an agreement in respect of a property in Georgia.
The agreement provided for disputes to be referred to arbitration. The Claimant applied under s 44(3) of the Arbitration Act 1996 for a freezing injunction and other ancillary relief to preserve the property pending the constitution of the arbitral tribunal.
Section 44 of the Arbitration Act 1996, so far as material, provides: '… (3) If the case is one of urgency, the court may, on the application of a party or proposed party to the arbitral proceedings, make such orders as it thinks necessary for the purpose of preserving evidence or assets.'
The Respondent submitted that on the material available to the court, it was clear that there was no imminent risk of it dissipating the property and, therefore, the case did not fall within the very limited powers of intervention provided to the court by s 44(3) of the Act.
The Commercial Court held that as the central role of the Arbitration Act 1996 was to restrict the role of the court in the arbitral process, the s 44 powers should be limited to assisting the arbitral process and should not usurp or interfere with it. On a proper construction of s 44(3), if the case was one of urgency, the court had jurisdiction to make such orders as it considered necessary for preserving evidence or assets.
On the facts, the Court granted the application as the property in question, which was the subject of the claim, was the only asset of the Respondent company available to meet the Claimant's claim and unless that asset was preserved there was a risk that the arbitration might be rendered futile.