A recent decision by the Commercial Court in the case of U&M Mining Zambia Limited v Konkola Copper Mines Plc  All ER (D) 136 in which the Claimant’s application to continue a worldwide freezing order over the assets of the Respondent, Konkola, was granted, is significant for those conducting international arbitrations in London.
Worldwide freezing orders are, of course, normally granted on an ex parte basis in order to prevent the dissipation of assets by a defendant/respondent. The defendant then has the opportunity to try to set it aside on a number of grounds. The noteworthy ground which we consider in this blog post is that the Court considers it “just and convenient” to allow the freezing order to continue.
What is unusual about this case is that the Court upheld the freezing order even though there are no assets in the UK. The Court held that where the seat of the arbitration is London, it would ordinarily be appropriate for the Court to issue orders in support of the arbitration, although there may be reasons why it is not appropriate from time to time, even though the seat of the arbitration is in England. So a worldwide freezing order will not necessarily be granted in every similar case.
In addition the Court decided that:
- The fact that enforcement of the arbitral award would take place in Zambia was not sufficient to make it inappropriate for the Court to grant a worldwide freezing order;
- Even if the Zambian Court could also grant a freezing order, this would not make it inappropriate for the English Court to do so.
It is therefore possible for two courts to be appropriate forums in which to bring an application for a worldwide freezing order – in the case of London, because it was the seat of the arbitration, and in the case of Zambia because of the residency of the respondent, Konkola.
This decision should further encourage the choice of London as the seat of the arbitration in international contracts, where assets are not actually located in the UK.