Freezing orders can be secured to enforce judgments and recover assets after litigation has concluded. The experienced commercial litigation lawyers at ParrisWhittaker are experienced in successfully applying for freezing orders on behalf of our clients.
In a recent case1, the court demonstrated the extent to which it would be prepared to grant a freezing order after litigation has concluded. The ruling, which was handed down by the UK’s High Court, has persuasive authority on the courts in The Bahamas.
What happened?
The claimant was an experienced yachtswoman whose vessel was insured with the defendant insurer. The policy covered loss or damage caused by sea perils, piracy, malicious acts and theft.
In March 2014, while sailing with a friend, the claimant’s yacht was grounded on a reef in the Philippines. The yacht was badly damaged but she secured the hatches and was forced to abandon it overnight. On returning the next day, she found it had been ransacked by thieves. However, on notifying the defendant insurer – liability was denied.
The claimant brought a claim for compensation but the defendant did not engage with the litigation process, except for filing a defence. Its defence included that the claimant had failed to maintain the yacht; the navigation equipment and charts were out of date so that the yacht unseaworthy; and the claimant had failed to take steps to minimise the loss.
The judge rejected those allegations and found in favour of the claimant. She then sought a freezing order to recover the indemnity awarded to her.
The ruling
The claimant was granted a freezing order against the defendant insurer as well as two of its directors, and ‘persons unknown’ with control of a bank account which held the insurer’s funds.
She also successfully sought an extension of a post-judgment freezing order made against a non-party company linked to the defendant. She successfully argued that the companies and the directors had breached the freezing order by diverting the defendant’s business.
The courts have the power to grant a so-called Chabra freezing order against a third party where certain principles are satisfied, particularly where it can be shown there is good reason to believe the third party holds (or controls) assets that belong to the defendant.
Here, there was evidence in the form of bank statements revealing that funds were being received from the defendant by non-parties. The court took the view that this was enough to demonstrate a good reason to believe that the non-parties held assets belonging to the defendant insurance company.
What does this mean?
The ruing shows that freezing orders remain a flexible tool to facilitate the enforcement of judgments and recover of assets. They can be extended to non-parties to litigation; and the ruling makes clear they may also be granted following the conclusion of litigation.
How can we help?
If you need to secure a freezing injunction to protect your interests, get in touch with our expert freezing injunction lawyers urgently.
The solicitors at ParrisWhittaker are tenacious, experienced and willing to protect your interests robustly. Get in touch with us as early as possible for specialist advice. Contact us at info@parriswhittaker.com
1McKeever v Northernreef Insurance Co S.A. [2020] 4WLUK 244
