Swift-Fortune Ltd v Magnifica Marine SA (Capaz Duckling)

A freezing order will be granted only where there is a real risk that a judgment will go unsatisfied and it is just and convenient to grant relief. Delay in seeking relief may be an almost insuperable obstacle, particularly where the claimant first pursued relief in a jurisdiction lacking jurisdiction. In applications made without notice, the applicant must disclose material legal principles and authorities, including authorities concerning attempts to freeze sale proceeds before completion. A planned freezing-order trap may be unjust where the seller co-operated in completing the sale. Non-disclosure may justify setting aside the order and prevent its resurrection in another jurisdiction.

The claimant sought a worldwide freezing order of US$2 million in support of London arbitration proceedings arising from the delayed delivery and alleged condition of the vessel Capaz Duckling. The money had been frozen in Singapore under an injunction which was later discharged because the Singapore courts lacked jurisdiction to support a foreign arbitration. The Singapore Court of Appeal affirmed that decision.

The defendant had undertaken to preserve the money pending the English application. The parties agreed that the English court had jurisdiction and that the claimant had a sufficiently good arguable case. The issues were whether there was a real risk of dissipation and whether granting the order would be just and convenient.

1. Application dismissed. The defendant was a one-ship Panamanian company which had ceased trading, had disposed of its vessel and had no apparent asset other than the money in Singapore. The money was readily transferable and the defendant gave no clear indication of its intended destination or use. Those circumstances established a real risk that a judgment would go unsatisfied.
2. The just-and-convenient requirement was not satisfied. The claimant had pursued relief for a substantial period in Singapore, although that court lacked jurisdiction, and had made little progress in the arbitration. That delay was an almost insuperable hurdle.
3. The court considered the authorities on freezing orders obtained in connection with ship sales. The Vera Cruz [1992] 1 Lloyd’s Rep. 353 supplied the starting point that the cause of action had to have accrued, but did not disclose the wider principles concerning jurisdiction, without-notice applications, planned traps and notice before completion.
4. The authorities established material considerations which should have been placed before the Singapore court. They included whether the court had jurisdiction, whether an application should be made ex parte, whether it was appropriate to create a trap after the seller had co-operated with completion, and whether notice should be given before completion. The claimant had failed to present those matters fully.
5. The obligation in a without-notice application extends to relevant legal principles and authorities. The court accepted that, had the original application been made in England with proper disclosure, the order would have been set aside for non-disclosure. There was therefore no basis for resurrecting it through the present application.

The judgment states that Mrs Justice Prakash set aside the Singapore injunction because the Singapore court lacked jurisdiction to grant freezing relief in support of a foreign arbitration. The Singapore Court of Appeal dismissed the claimant’s appeal on 1 December 2006 and affirmed that conclusion. The present application was then pursued in the English Commercial Court.