The English Courts are prepared to grant Claimants a Worldwide Freezing Order (“WFO”) or other interim relief in support of foreign proceedings, even where a Defendant has no assets in the English Court’s jurisdiction.
In the case of Royal Bank of Scotland -v- FAL Oil Company Limited and Others (2012) Justice Gloster continued a WFO and disclosure orders against Defendants despite them having no assets within the jurisdiction. The original Court Order had been granted in support of proceedings in the United Arab Emirates in accordance with the Court’s powers to do so under Section 25 of the Civil Jurisdiction and Judgments Act 1982 (the “1982 Act”) to order interim relief in support of foreign proceedings.
Section 25(2) of the 1982 Act provides:
“On an application for any interim relief…the Court may refuse to grant that relief if, in the opinion of the Court, the fact that the Court has no jurisdiction apart from this section in relation to the subject-matter of the proceedings in question makes it inexpedient for the Court to grant it”.
In the Judgment of Justice Gloster, the following principles and guidelines from a number of authorities (which are relevant to the question of expediency under Section 25 of the 1982 Act were considered) and these can be summarised as follows:
The Court should be prepared in principal to grant appropriate interim relief even if its role is only ancillary; the Court should carefully consider whether there is any real connecting link between the subject matter of the interim measure sought and the territorial jurisdiction of the Court before which the measures are sought – this includes considering the power of the Court to monitor the enforcement of its orders; and whether it is most appropriate for protective measures to be granted by those Courts best able to make their orders effective.
Whilst the Court has to be extremely cautious in granting ancillary WFOs where substantive proceedings were commenced elsewhere or where the Defendant is not resident within this jurisdiction or has close ties from disposing of their assets outside the jurisdiction, the Court should also consider whether it is likely to be inexpedient to make WFOs against foreign Defendants where there is a likelihood that they will disobey the orders and there will be no real sanctions available to enforce compliance with the Court order.
When considering the question of expediency, the Court should also take into account whether making the order will interfere with the management of the case in the foreign Court, whether it is the policy of the foreign Court not to make a WFO and whether the order will give rise to confusion or risk conflicting orders in other jurisdictions. Furthermore, the Court would need to consider whether at the time the order is sought whether there is likely to be potential conflict regarding jurisdiction which makes it inappropriate and inexpedient to grant a WFO, and if one is granted, will the Court be able to enforce if jurisdiction is resisted or there will be disobedience with the Court order.
After considering all the matters in the above case, Justice Gloster held that it was clearly expedient and appropriate to continue the orders on the basis that the Defendants had a “real link or connection” with the jurisdiction. In that case it was also stated that “having chosen to obtain substantial credit facilities and operate bank accounts in this jurisdiction, under the auspices and structure of loan agreements subject to English law, and English exclusive jurisdiction clauses, it is not open to Defendants when it suits their purposes to do so, to deny that they have any relevant connection or link within this jurisdiction”.
In summary, it is clear from the above that the English Courts will give very careful consideration to any applications made where a WFO or disclosure order against Defendants with relatively few links to and/or assets are within the jurisdiction. However, his is a matter very much for the Court’s discretion and will be exercised and a decision made dependant largely upon the above principles, guidelines and facts. Therefore, the English Courts are prepared to assist where possible by granting interim relief in support of foreign proceedings.