In Banco Nacional de Comercia Exterior SNC v Empresa de Telecommunicationes de Cuba SA – Butterworths Law Direct 25.1.07 the applicant had entered into an agreement in February 2000 entitled ‘escrow agreement’, governed by Italian law and subject to the exclusive jurisdiction of courts in Turin, guaranteeing the restitution of financing provided under a credit facility arising under a loan agreement.
When a dispute arose, an arbitration was conducted in Paris in accordance with the arbitration clause in the loan agreements. It was resolved in favour of the applicant, but shortly before the instant hearing the decision was annulled on the ground that the seat of the arbitration should have been in Spain. In the interim, proceedings had begun in Turin. Judgment was given in November 2005 in favour of the applicant. Significant damages were awarded to the applicant. The Italian judgment was registered in England pursuant to Council Regulation (EC) 44/2001 in September 2006. A domestic freezing order was made at the same time, the basis of which was the need to preserve assets of the respondent situated in England in the form of money due from ‘UK Roaming Partners’ of the respondent. The regular payments of those partners prior to the decree were made into the escrow accounts under the escrow agreement. Thereafter the payments were no longer paid to those accounts. In October 2006, a worldwide freezing order was also made, and the applicant obtained a variation of the domestic order. The applicant applied seeking the continuation of the orders together with various amendments. The respondent accepted continuing the domestic order (without amendment) but opposed the continuation of the worldwide order.
The Commercial Court held that Article 47 of Council Regulation (EC) 44/2001 provided an unrestricted and discrete code for the granting of provisional or protective measures in the context of enforcement. There was no basis for restricting the measures to the freezing of domestic assets and/or for limiting the disclosure to domestic assets. The relief was aimed not at the assets, but rather the respondent. It carried none of the comity implications of being tantamount to interference with the jurisdiction of a foreign court as were involved in anti-suit injunctions. To the contrary, it was intended to aid enforcement of the foreign judgment. On the facts, the applicant had made out a risk of dissipation and, in all the circumstances, the injunction would be continued.