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Iranian indictment not proof of assets

In the recent decision of Iranian Offshore Engineering & Construction v Dean Investment Holdings SA, the High Court of England and Wales granted a post-judgment worldwide freezing injunction. The case provides an important reminder to offshore jurisdictions that in the absence of satisfactory evidence of foreign law, English law will apply.

The claimant company made a successful claim of fraud against the sixth defendant to the action (X) and obtained a substantial judgment. Consequentially, the claimant made an application for a worldwide freezing order against X but the trial judge held that the issue should not be considered until more was known about X’s assets in Iran, and more particularly, whether they already were the subject of a freezing order. At the injunction hearing, the claimant adduced evidence that there were criminal proceedings in being against X in Iran but that there was no freezing order in place.

The claimant submitted that where X had previously disregarded court orders, had been silent on the value and location of his assets and had had significant findings of fraud and dishonest conduct made against him that there was a risk that X would dissipate his assets in frustration of the judgment. X had also recently applied for bankruptcy. X claimed that no evidence had been adduced that he had disposed of any assets. Interestingly, X relied on an Iranian indictment against him which purportedly listed his assets and a letter which prohibited him from entering into certain transactions to provide comfort to the High Court. It was not clear whether the letter in question was from a judicial authority and the Court was not satisfied that it restrained X from dealing with his assets.

The application for the freezing order was post-judgment so the claimant clearly had a good arguable case. In addition, findings that the Court had made as to the conduct of X – specifically in relation to his silence on the status of his assets, tipped the balance in favour of granting the injunction. X had applied for an adjournment of the injunctive proceedings but in the five weeks since the question of the freezing order had been raised, X had failed to provide any evidence setting out his assets. X had offered undertakings but those undertakings did not include the disclosure of his assets. The Court held that there was no good reason to adjourn the application.

The Court granted the application for a worldwide freezing injunction.

Iranian indictment not proof of assets

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