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A delay in applying for worldwide freezing order is not always fatal

In the recent case of PJSC National Bank v Mints the English High Court found that a six month delay in applying for a worldwide freezing order (WFO) did not mean there was no real risk of dissipation, and the delay was readily understandable given the complexity of the case. The decision will be useful for practitioners in the Cayman Islands given the FSD Judges often draw guidance from English principles when considering applications for injunctive relief.

The defendants argued that it was clear that the plaintiffs had intended to pursue them about 18 months prior to the application, and there was insufficient “recent” evidence of dissipation.  In the circumstances, the Judge found there was a delay of about six months between the plaintiffs becoming aware that the defendants had relocated to England, and bringing the application, but that there was still strong and solid evidence of a risk of dissipation. 

The Judge drew guidance from the following established principles on delay:

  • Delay in applying for a freezing injunction is not a bar in itself to obtaining relief.  If the court is satisfied on the evidence that there remains a real risk of dissipation it should grant an order, notwithstanding the delay (English Court of Appeal in JSC v Pugachev).
  • The mere fact of delay in bringing an application for a freezing injunction does not without more mean there is no real risk of dissipation.  Even if the delay in bringing the application demonstrates the plaintiff does not consider there is a risk of dissipation that is only one factor to be weighed in the balance (Mr. Justice Flaux in Madoff).
  • Nevertheless, relief is often denied to an applicant who pursues his rights in a dilatory fashion, for example where there have been several years of negotiation before an application for an injunction is filed (Mr. Justice Roth in Anglo v Goldberg).

The Judge noted that the transactions relied upon all took place in a period of less than two years prior to the application for the WFO and determined that this was sufficiently recent even though the trail may have gone “somewhat cold” thereafter. The evidence must be considered as a whole – the plaintiffs had been investigating other potentially fraudulent transactions, wished to explore the possibility of commercial resolution, there were issues accessing relevant emails, officers of the plaintiff were unwilling to cooperate, and the plaintiffs needed to be sure that the defendants, or some of them, were domiciled in England. The Judge found the delay was readily understandable given the complexity of the transactions, the evidence, and the need to ensure that all relevant facts were fairly disclosed to the court. 

The case demonstrates that (as with most injunction-related issues) there is no bright line test, each case will be decided on its facts, and the ultimate question is whether it is just and convenient to grant the WFO. 

A delay in applying for worldwide freezing order is not always fatal

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