January 15, 2018
A High Court in England and Wales recently confirmed the Court’s ability to order a worldwide freezing order (WFO) to aid enforcement of an arbitral award as a judgment of the Court.
In the recent decision of Great Station Properties v UMS Holding Limited [2017] EWHC 3330 (Comm), Mr Justice Teare granted a WFO where an arbitration award had concluded that the Respondents were liable to pay the Claimants US$305.8 million.
The case demonstrates that a WFO can be a powerful weapon in the enforcement of arbitration awards as judgments of the court and, in particular, in the enforcement of London arbitration awards where no assets are located within the jurisdiction. It further emphasises London as a favourable seat in international arbitration.
What Is a Worldwide Freezing Order?
WFOs continue to be powerful weapons in the armoury available in UK litigation.
A freezing order is an interim injunction that restrains a party from disposing of, or dealing with, its assets to ensure that the assets in question remain available until an arbitral award or court judgment can be enforced. They are not a proprietary remedy but are granted to give a claimant advance security for its claim where the claimant believes that there is a real risk that the defendant will dissipate its assets.
Points to consider when seeking a WFO:
Breakdown of the Recent Decision
The principal issue for the Court in the decision of Great Station Properties v UMS Holding Limited was whether the Claimants had established the necessary risk of dissipation of assets by the Respondents, three companies beneficially owned by businessman Mr Grigorishin.
Mr Justice Teare held the following:
The Court granted the WFO even though: (i) none of the Respondents’ assets were located in England; and (ii) proceedings had been initiated in Cyprus (where the Respondents’ assets were located) to register and enforce the English judgment.
Teare J considered that where the English Court had given permission for an award to be enforced as a judgment of a Court it was in the public interest that the judgment of the Court be respected and enforced. A WFO is a means of ensuring, so far as that is possible, that a judgment will be enforced.