Parbulk II AS v PT Humpuss Intermoda Transportasi TBK & Ors

A freezing order may be granted against a non-cause-of-action defendant where the principal defendant has a debt, receivable or claim against that third party, and the order protects a possible enforcement route against that asset. The jurisdiction is flexible, but it does not permit the court to disregard separate corporate personality merely because companies are under common control or because that appears just. A worldwide order against a foreign third party also requires sufficient subject matter connection with England and regard to international comity. Submission to personal jurisdiction does not remove those limits. On the facts, the court continued a freezing order against HSTPL’s assets within England, limited to its indebtedness to the judgment debtors, but declined to continue the worldwide order.

Parbulk obtained an arbitration award against Heritage under a bareboat charterparty and a judgment against HIT under a guarantee. It sought continuation of worldwide freezing orders against Heritage, HIT and HSTPL, a Singapore company and parent of Heritage against which there was no substantive claim.

The court initially considered that a Chabra-type order against HSTPL was justified by evidence of intra-group transfers, possible dissipation and indebtedness to Heritage and HIT. Further submissions concerned service out of the jurisdiction, the effect of Linsen International Ltd and Others v Humpuss Sea Transport Plc Ltd and Others, and whether an order over HSTPL’s foreign assets would exceed the court’s subject matter jurisdiction.

1. Jurisdiction and third-party orders. Section 37(1) of the Senior Courts Act 1981 gives the court power to grant an interlocutory injunction where it is just and convenient. A freezing order may be made against a non-cause-of-action defendant where credible evidence shows that the third party holds or controls assets, claims or receivables of the principal defendant, or where an enforceable process may require the third party to contribute property towards satisfaction of the judgment.
2. The order may extend to the third party’s general assets up to the value of the relevant debt or claim, even where the particular asset cannot be identified. The jurisdiction remains discretionary and fact-dependent. Evidence of collusion, impropriety or participation in attempts to make the judgment debtor judgment-proof may justify an order against the third party itself.
3. Separate corporate personality. Common ownership, practical control, a group restructuring, use of a special purpose vehicle, or the interests of justice do not by themselves justify treating a subsidiary’s assets as those of its parent or another group company. The corporate veil may be pierced only where the company or entity has been used as a device or façade to conceal the true facts, liability or assets.
4. Territorial limits. Personal jurisdiction over HSTPL did not determine whether a worldwide order was appropriate. The court had to consider subject matter jurisdiction and international comity. A foreign defendant’s participation in proceedings and failure to challenge jurisdiction could be taken into account, but could not create an unlimited power to regulate foreign conduct and foreign assets.
5. The court declined to continue the worldwide freezing orders against HSTPL. Its connection with England was minimal, the relevant debt and assets were outside the jurisdiction, and any dispute concerning improper diversion or repayment was likely to be governed and litigated abroad. The court continued the freezing order over HSTPL’s assets within England, capped at its indebtedness to Heritage and HIT. Costs were divided to reflect the parties’ respective success.

The judgment records that Heritage’s appeal under section 69 of the Arbitration Act 1996 was subsequently dismissed by Eder J on 8 November 2011. That appeal was not the subject of the present decision. The present court determined the applications concerning freezing injunctions, jurisdiction, security for costs and related disclosure.