In Raiffeisen, the plaintiff Austrian bank successfully obtained a worldwide freezing injunction in aid of its claims against a guarantor company and others incorporated in the Cayman Islands, British Columbia, the Marshall Islands and Malta. The bank alleged that the defendants had stripped the guarantor’s assets for the purpose of putting them out of the reach of the bank, and that the dispositions of these assets were caught by the FDL such that they should be set aside and the assets (or their value) be restored to the guarantor. The bank intended to enforce the guarantee once the assets had been restored.

The FDL provides that dispositions of property made with an intent to defraud and at an undervalue are voidable on the application of a prejudiced creditor. The phrase “intent to defraud” is defined within the FDL to mean an intention to willfully defeat an obligation owed to a creditor. A disposition is set aside under the FDL only to the extent necessary to satisfy the obligation owed to the applying creditor, plus costs.

• The FDL has extra-territorial effect, and could apply to dispositions between non-Cayman Islands entities provided the Court’s jurisdiction was otherwise enlivened.
• The intention to defeat a creditor need only be "a" purpose of the disposition, but does not have to be the sole or dominant purpose.

• While the Court may only set aside the disposition “to the extent necessary” to satisfy the obligation owing the applicant creditor, in circumstances where the debtor is insolvent the Court may require that a greater amount be restored. The reason for this is that the restored assets would be distributed parri passu  with all creditors, and so the Court could require restoration of as much of the disposition as needed to ensure that all creditors would be paid in full (including the applicant creditor).

The FDL is often overlooked but, as Raiffeisen  demonstrates, it is a potentially powerful and flexible tool for creditors addressing cross border asset enforcement issues.