In this judgment, Hamblen J ruled on important points relating to the scope of a worldwide freezing order (“WFO”) granted in support of arbitration proceedings and what is needed to purge a party’s contempt.
The respondent (M) had not provided an affidavit of assets at the required time and had been held to be in contempt of court. The affidavit was then provided but the claimant (F) asserted that M had not yet purged its contempt because supporting evidence was required and an explanation of the earlier failure should have been provided. Hamblen J rejected these points holding that it was sufficient that the affidavit had now been served together with an apology which was neither conditional or limited.
Hamblen J similarly rejected F’s argument that the WFO on the standard Commercial Court wording would freeze assets held by companies who had the same director or owner as M on the basis that M had, via its director, indirect control of the third party assets. Hamblen J held that this would give extraordinarily wide ranging effect to the WFO and would be tantamount to piercing the corporate veil without grounds for doing so. The conclusion would also be contrary to the principles applying to the exercise of the “Chabra jurisdiction” set out recently in The Mahakam  2 All ER (Comm) 513.
Hamblen J declined to discharge the WFO on the grounds that F had arrested a ship and F had failed over a period of a year to serve arbitration claim submissions detailing its claim for US$16 million (the frozen sum). Hamblen J concluded that undertaking not to obtain orders overseas “of a similar nature” to the WFO did not preclude the associated ship arrest obtained by F against M. Although the claim submissions should have been provided more speedily, Hamblen J did not consider this alone to be sufficient reason to discharge the WFO.
Josephine Davies for the defendant (instructed by Cooke, Young and Keidan)