Clyde & Co acted for the defendant in this case.
The claimant was granted leave from the English courts to enforce an arbitral award in its favour. The seat of the arbitration had not been in England and Wales. It then sought a worldwide freezing order against the defendant, to restrain the defendant from removing assets from England and Wales and disposing of worldwide assets up to a certain monetary limit.
In deciding whether the English court has jurisdiction to grant a worldwide freezing order in these circumstances, Butcher J held that a claim for ancillary relief (such as a freezing order) did not need to be included in an arbitration claim form seeking recognition and enforcement of an arbitral award under section 101 of the Arbitration Act 1996. As the English court could make a domestic freezing order here, there were no grounds for denying a worldwide freezing order on the basis that it had not been claimed in the arbitration claim form.
However, when it came to exercising his discretion, the judge considered that this case was analogous to orders under section 44 of the 1996 Act (which allows the court to grant an interim injunction in support of arbitral proceedings). In Mobil Cerro Negro v Petroleos de Venezuela (see Weekly Update 13/08), the judge had held that it would be appropriate to grant a freezing order affecting assets not located in England and Wales under section 44 of the 1996 Act "only if the respondent or dispute had a sufficiently strong link to England, or where there was some other factor of sufficient strength, for example international fraud, to justify proceeding in the absence of such a link".
The judge concluded that, on the facts, this was not an appropriate case for the grant of a worldwide freezing order, in part because there was only a very limited link with this jurisdiction. There was also a danger here that there would be a risk of conflicting judgments with other jurisdictions and so an order would be contrary to the principles of comity. Nevertheless, it was held to be appropriate to grant the domestic freezing order since the evidence did not satisfy the judge that there were no assets in the jurisdiction.