<center><span class="news-text_italic-underline">Judgment Date: 2 August 2024</span></center>
Summary
The court granted a domestic freezing order (as opposed to a worldwide freezing order) in support of proposed arbitration proceedings in Switzerland. The claimant, Camper & Nicholsons International Ltd (“<span class="news-text_medium">C</span>”), alleged that the respondent, Langmead (“<span class="news-text_medium">L</span>”), had diverted business and commissions for personal gain. The court found a real risk of dissipation of assets but held that a worldwide order was not justified.
Facts
- C employed L as a contracting yacht broker under a Swiss law-governed agreement, requiring disputes to be resolved through Swiss arbitration.
- C terminated L’s contract in February 2024 due to poor sales performance and later discovered evidence suggesting fraudulent diversion of commissions.
- C sought a worldwide freezing order to prevent dissipation of assets before launching Swiss arbitration proceedings to recover the misappropriated sums.
Held
- <span class="news-text_medium">Jurisdiction:</span> Under s.2(3) and s.44 of the <span class="news-text_italic-underline">Arbitration Act 1996</span>, the English court had jurisdiction to grant freezing orders for foreign-seated arbitrations, similar to orders in aid of foreign judicial proceedings under s.25 of the <span class="news-text_italic-underline">Civil Jurisdiction and Judgments Act 1982</span>.
- <span class="news-text_medium">Arguable Case:</span> The contract explicitly prohibited L from diverting business or commissions to personal accounts, providing a strong basis for a claim under Swiss law.
- <span class="news-text_medium">Risk of Dissipation:</span> The evidence suggested a deliberate and sustained effort by L to conceal misconduct, supporting an inference of a real risk of dissipation.
- <span class="news-text_medium">Delay:</span> The two-month delay in commencing the investigation and the one-month delay before filing the application were reasonably explained.
- <span class="news-text_medium">Worldwide Freezing Order:</span> The court found the evidence insufficient to justify a worldwide order, noting that L lived and worked in London and remained employed in the yacht brokerage industry. A domestic freezing order was deemed sufficient and appropriate.
Conclusion
The court granted a domestic freezing order but declined to issue a worldwide freezing order, concluding that while there was a real risk of dissipation, the evidence did not justify global relief. This case highlights the English court’s approach to freezing orders in support of foreign arbitration proceedings and the limits on seeking worldwide relief without sufficient factual justification.
