Saad Investments Company Ltds v Al -Sanea

For service out of the jurisdiction, the claimant must show a reasonable prospect of success. At that stage, contractual notice provisions may support an arguable construction even where the notice contains inaccuracies, provided the alleged defects do not necessarily invalidate it.

A freezing order requires a real risk of dissipation assessed from the evidence as a whole. Relevant matters may include deliberate removal or withholding of assets, non-compliance with court orders and evasion of service, together with the strength of the claim and the surrounding circumstances. The existence of foreign obligations does not make a freezing order inappropriate where the evidence otherwise establishes the necessary risk.

Saad Investments Company Limited, acting through its joint official liquidators, brought proceedings against Mr Al-Sanea under a put option agreement concerning shares in Berkeley Group Holdings plc.

Mr Al-Sanea applied for declarations concerning jurisdiction and to set aside an order permitting service out of the jurisdiction. SICL applied for a freezing order in support of its claim. The applications concerned the prospects of SICL’s substantive claim, alleged non-disclosure at the without-notice hearing, and whether there was a sufficient risk of dissipation of assets.

1. Applications. Mr Al-Sanea’s application for declarations and to set aside permission to serve out was refused. SICL’s application for a freezing order was granted in principle.
2. Prospect of success. Applying the approach explained in BAS Capital Funding Corporation v Medfinco Ltd [2004] 1 Lloyd’s Reports 652, SICL had to show a reasonable prospect of success. The court was not required finally to determine the substantive contractual disputes.
3. The Agreement gave rise to substantial arguments that delivery to the specified post office box constituted sufficient service. There were also substantial arguments that the closing-date wording, the failure to specify a payment account in full, and other inaccuracies did not invalidate the notice. The cash difference election in clause 1(E)(ii) could arguably be exercised before the put option closing, so that requirements directed only to an actual sale of shares might not apply.
4. Non-disclosure. Applying the approach in Dadourian Group International Inc v Simms [2006] 1 WLR 2499, as discussed in Albon v Naza Motor Trading Sdn Bhd [2007] 1 WLR 2489, the without-notice evidence did not disclose an inadequate failure to draw the alleged defences to the attention of Simon J.
5. Freezing order. The court applied the principles concerning dissipation described in Mobil Cerro Negro v Petroleos de Venezuela [2008] 1 Lloyd’s LR 684. A real risk was established by evidence of deliberate removal or withholding of company property, failures to comply with Cayman court orders, and evasion of foreign service. The absence of allegations of fraud was relevant but did not outweigh the evidence.
6. The principle in Iraqi MOD v Arcepey Shipping [1981] 1 QB 65 did not prevent further investigation of payments said to discharge existing obligations. The position under Saudi Arabian orders was neutral for the present application.