Freezing orders: High Court confirms ancillary disclosure jurisdiction for freezing orders supporting foreign proceedings

Key Takeaways

1. Global enforcement: Courts can issue worldwide asset disclosure orders (“ADO”) in support of freezing orders (“FO”) made under section 25 of the Civil Jurisdiction and Judgments Act 1982 (“CJJA”), even when the FO is limited to England and Wales. This is because an ADO is ancillary to an FO to ensure its effectiveness, and does not constitute disclosure solely to assist foreign proceedings. This distinguishes ADOs from Norwich Pharmacal relief, which cannot be granted to aid foreign proceedings.[1]

2. Transparency in enforcement: While the Court may order temporary ‘attorney eyes only’ confidentiality clubs in respect of disclosure under ADOs, they are unlikely to be ordered or, if ordered maintained, if they hinder enforcement or the applicant’s ability to police the FO. Applicants’ standard form undertakings not to use disclosed information without the Court’s permission help to mitigate the risk of misuse, and respondents will therefore have to present clear evidence to justify confidentiality restrictions.

3. Fortification and costs: Courts may require an applicant to fortify a cross-undertaking in damages where the applicant has insufficient readily-available assets within the jurisdiction to satisfy any liability under their undertaking. In this case, the applicant had to pay £325,000 into court to address losses arising from the respondent’s restricted access to interest-bearing accounts.

To succeed on an application for fortification, a respondent will have to provide credible evidence of losses which would be caused by the grant of the FO. The issue of the sufficiency of an applicant’s assets is something which applicants should address up front in their initial application.

Facts of the Case

On 12 August 2024, the claimant (“C”) obtained an ex parte FO against the defendant (“D”) in respect of D’s assets in England and Wales up to £11 million, alongside a worldwide ADO requiring disclosure of D’s global assets. The FO was granted under section 25 CJJA to support Greek matrimonial proceedings.

On 9 September 2024, the Court varied the ADO to address D’s concerns about misuse of disclosed information in the Greek proceedings. The Court ordered disclosure into a temporary confidentiality club, initially excluding C’s legal team, pending a further hearing.

At the instant hearing, D argued the ADO should be limited to domestic assets, claimed the Court lacked jurisdiction to order disclosure in aid of foreign proceedings, and sought to maintain the confidentiality restrictions. D also requested fortification from C, citing financial losses from the FO restricting his access to interest-bearing accounts.

The Decision

• Worldwide ADO: The Court upheld the worldwide ADO, as it was ancillary to the FO and necessary for enforcement under CPR 25.1(1)(g). It distinguished the ADO from Norwich Pharmacal relief, which is not available solely in aid of foreign proceedings. The global scope of the ADO was justified, as there were no issues of comity with the Greek court, and C had given a collateral use undertaking to prevent misuse of disclosed information.

• Confidentiality club: The Court discontinued the confidentiality club, noting that some of the relevant material had been disclosed in the Greek proceedings. C’s confirmation that she would adhere to her collateral use undertaking, including seeking the Court’s permission before using disclosed information outside of the English proceedings, also mitigated the risk of misuse, since breach of this undertaking would expose C to enforcement, including against her fortification payment. The Court prioritised transparency to enable C to monitor D’s compliance with the FO and ADO effectively.

• Fortification: The Court ordered C to pay £325,000 into court in fortification to address D’s claimed financial losses, balancing D’s financial concerns with C’s ability to preserve her right to enforce a Greek judgment, reflecting a proportional approach towards both parties.

• Costs: D was ordered to pay all of the costs of his failed applications and 90% of the return date hearing costs, underscoring the risks of unsuccessful challenges to FOs and ancillary relief.

[1] Green v CT Group Holdings Limited [2024] 2 All ER (Comm) 342 where Mr Charles Hollander KC (sitting as a Deputy High Court Judge) held that Norwich Pharmacal relief is not available to obtain evidence for the purpose of using it in foreign civil proceedings.