In Munib Masri v Consolidated Contractors International Company SAL [2008] EWHC 2402 (Comm) (previously reported, most recently in the June and July bulletins) the Claimant was a judgment creditor and the Defendants were his judgment debtors and were jointly and severally liable to him for an amount in excess of US$23m. Various aspects of the dispute were litigated in several jurisdictions and in the English courts. It was clear to the English courts that the judgment debtors were able to pay the judgment debt but that they had no intention of doing so. Eventually a receiver was appointed but the judgment debtors failed to comply with his requests. A further receivership order was sought (the subject of this hearing). This time the Claimant sought to have the same receiver appointed to receive monies arising out of contracts disclosed in litigation in aid of the enforcement of the judgment. The Defendants opposed the making of the receivership order on the grounds that: it would require a truly exceptional case to justify the court granting a receivership order over the foreign assets of a foreign judgment debtor; a receivership order by way of equitable execution should not invite or require the judgment debtor to break pre-existing contractual commitments; a receivership by way of equitable execution should not be granted if its effect would be to interfere seriously with the interests of third parties; and that the dictates of comity must be observed. The court rejected all arguments and granted a receivership order.  

It was argued on behalf of the Defendants, that freezing orders previously granted were being used as an instrument of oppression in order to pressurise the Defendants into paying the judgment debt. In support of this proposition, the Defendants sought to rely on the decision in Camdex International Limited v Bank of Zambia (2) [1997] 1 WLR 632. In that case the assets seized were of no value on the open market and were not assets against which execution could be levied and the freezing orders were, therefore, found to be illegitimate since they would not assist the collection of the debt. The court distinguished this case and found that the freezing orders had been granted for the entirely legitimate purpose of assisting in the ultimate collection of the debt.  

Finally, it was argued by the Defendants that one of the freezing orders gained in an earlier ex parte application had been obtained in an irregular and inappropriate fashion on the grounds that prejudicial material was presented to the judge without the knowledge of the Defendants before he conducted the inter partes hearing. The court rejected this argument, finding that the judge hearing the application was not judging issues of credibility or reliability, that by the time the issue had reached this stage, it had already been found that the Defendants were determined to do everything possible to frustrate enforcement of the judgment and that regardless, the Defendants had won on the first and second points at the inter partes hearing. There could be no argument that the integrity of the inter partes hearing had been impugned.