Freezing Orders In Support of Foreign Litigation

S. 25 of the Civil Jurisdiction and Judgments Act 1982,likely to be a potential conflict as to jurisdiction
as extended by the Civil Jurisdiction and Judgmentsrendering it inappropriate and inexpedient to make a
Act 1982 (Interim Relief) Order 1997 ("CJJA") gives theworldwide order.
power to the English court to grant interim relief in5. Whether, in a case where jurisdiction is resisted and
proceedings that have been, or are about to be,disobedience to be expected, the court will make an
commenced in a foreign state. The proceedingsorder which it cannot enforce.
authorized by the CJJA are free-standing proceedings6. Mobil v Petroleos was a case involving the
brought solely for the purpose of obtaining the interimVenezuelan national oil producer which sought to
relief. In such cases, the merits will not be decided inunilaterally "repatriate" the oil enterprises owned by
England & Wales. The cause of action can alsoMobil to companies that were 60% owned by
be one which will be determined in arbitrationVenezuela. Mobil sought ICC arbitration in New York
proceedings which will be conducted abroad.and was granted an ex parte worldwide freezing
However, where the cause of action is not one whichinjunction order under s. 44 Arbitration Act 1996.
will be adjudicated upon in England & Wales,Walker J held that were an award can be easily
careful attention must be paid to the basis upon whichenforced under ICC Rules a freezing order is unlikely
it is said that the court has jurisdiction. Under s. 25(2) ofto be just and reasonable. The recipient of the order
the CJJA, the court may decide to refuse relief if themust be shown to have a sufficient connection to the
fact that the court has no jurisdiction apart from underjurisdiction of England & Wales or there must be
s. 25 of the CJJA "makes it inexpedient for the courtsome other relevant reason to justify an order. Strong
to grant it".justification is required to counter the principle of comity
The Court of Appeal has given guidelines on thewith other jurisdictions. In this case there was no
approach to take in deciding this issue in Motorolajustification for an order since Petroleos had neither
Credit Corp v Uzan (No 2) which held that there are 5assets nor presence nor any dispute in the England
considerations which the court should bear in mind& Wales jurisdiction.
when considering the question whether it isETI Euro Telecom v Bolivia was a case involving
"inexpedient" to make an order under s. 25 CJJA:Bolivian decrees unilaterally nationalising shareholdings in
1. Whether the making of the order will interfere withETI's subsidiary company. Arbitration proceedings
the management of the case in the primary court: e.g.were commenced and ETI sought a worldwide
where the order is inconsistent with an order in thefreezing order against the Bolivian Government. In this
primary court or overlaps with it.case there were assets in London. The court held that
2. Whether it is the policy in the primary jurisdiction nots. 25 CJJA did not apply since the New York order
itself to make worldwide freezing orders.sought was for an attachment in aid of arbitration only
3. Whether there is a danger that the orders made willfor assets held in New York.
give rise to disharmony or confusion and/or risk ofHowever, in Mediterranean Shipping v OMG
conflicting inconsistent or overlapping orders in otherInternational a mafia fraud case the court held that
jurisdictions, in particular the courts of the state wherewhere there is cogent evidence of fraud, even though
the person enjoined resides or where the assetsthere were no assets in the jurisdiction and the court
affected are located. If so, then respect for thewould not ordinarily have granted the order, it was
territorial jurisdiction of that state should discourage theapparent that the fraud had been perpetuated in the
English court from using its unusually wide powersUK and worldwide and therefore international
against a foreign defendant.co-operation was essential.
4. Whether at the time the order is sought there is