Ras Al Khaimah Investment Authority & Ors v Bestfort Development LLP & Ors [2017] EWCA Civ 1014

Author:Clyde & Co LLP
Profession:Clyde & Co
 
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Court of Appeal sets out test for whether defendant has assets for a freezing order application and considers the impact of delay in applying

The judge at first instance refused to grant worldwide freezing orders in favour of the applicants (based in the UAE and Georgia) against the respondents (LLPs registered in England and Wales and owned by a Georgian national) in support of proceedings taking place overseas. Her decision was in part based on A v C [1981] 1 QB 956, which is authority for the proposition that a claimant will only be entitled to a freezing order if the defendant has assets which will be caught by the order; the Court will not make an order which is futile. She was not satisfied that there were substantial assets held by the respondents anywhere in the world. She also held that there had been considerable delay in bringing the application, and therefore the defendant would have had ample opportunity to dissipate assets during that time had he been so inclined, and so the risk of dissipation could not be proven. The Court of Appeal has now allowed an appeal from that decision and held as follows:

The test for showing that a respondent has assets which will be caught by the order was not merely that the defendant is wealthy and therefore must have assets somewhere. Instead, the correct test is that there are "grounds for belief" that the respondent has (or is likely to have) assets: "That is not an excessive burden but if an order is sought against numerous companies or LLPs and those companies and LLPs can show that there is no money in their accounts and the claimant cannot show that the account has been recently active, it may well be right to refuse relief" (paragraph 39). Whilst a failure to obey court orders might invite adverse inferences to be drawn, "it does not follow that compliance with a court order will negative a risk of dissipation if that risk has already been found to exist" (paragraph 54). On the issue of delay, the Court of Appeal...

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