Proving the risk of dissipation to obtain a freezing order
Clyde & Co for claimant
The claimant applied for a worldwide freezing order (“WFO”) after obtaining an award in its favour. In order to demonstrate a risk of dissipation of assets it sought to rely on the way in which the defendant had conducted the arbitration between the parties. Evidence was adduced to show that the defendant’s employees were willing to give untrue evidence, to cause unnecessary harm to the claimant and to take untenable points in order to delay enforcement of the arbitral awards. The tribunal had also found that the defendant had been obstructive of the arbitration process. Although none of that conduct amounted to dealing with its assets, Teare J held that such an entity might well seek to deal with its assets in a way to make enforcement of the arbitration awards more difficult. Accordingly, a risk of dissipation had been established.
The judge also found that it was just and convenient to grant the order. The mere fact that enforcement of the award would take place in Zambia was insufficient to make it inappropriate for the court where the arbitration has its seat to grant a WFO. The defendant had agreed to London arbitration and so either section 44 of the Arbitration Act 1996 or section 37(1) of the Senior Courts Act 1981 conferred personal jurisdiction over the defendant by the English courts. The assets were situated in Zambia, and the Zambian courts could also grant a worldwide freezing order. Accordingly, this was a case where two courts could appropriately grant a WFO: “However, I do not accept that the fact that it may be appropriate for another court to grant a freezing order means that it is inappropriate for this court to do so where this court’s in personam jurisdiction over KCM derives from the London arbitration clause to which KCM agreed. Nor do I consider that it is more appropriate for the Zambian court to issue a freezing order given that the seat of the arbitration was London”.