Star Reefers Pool Inc v JFC Group Co Ltd

A post-judgment worldwide freezing order may be continued where there is a real risk of dissipation and it is just and convenient to do so. Disclosure ancillary to the order should be proportionate to the information reasonably required to locate and identify assets. A company’s officers may be personally liable for contempt where, knowing of the order, they actively participate in its breach or wilfully fail to take reasonable steps to secure compliance. Service out of the jurisdiction may be ordered against responsible officers. The court may exercise jurisdiction where the officers fall within the narrower enforcement regime governing breaches by persons controlling the judgment debtor.

The claimant obtained an English judgment exceeding $16 million against the defendant on guarantees. A worldwide freezing order was granted and later varied. At the return hearing, the defendant did not oppose continuation, although it did not consent.

The court considered the continuation and terms of the order, disclosure of transactional documents, privilege against self-incrimination, costs, alleged breaches of the order, the joinder of named de jure, de facto and shadow directors, and service out of the jurisdiction.

1. Freezing order. There was a real risk of dissipation, and continuation of the worldwide freezing order was just and convenient. The order was continued until satisfaction of the judgment and outstanding costs orders, with liberty to apply to vary or discharge.
2. Ancillary disclosure. Disclosure of contracts of purchase and resale and commercial invoices for December 2011 transactions was sufficiently limited and relevant to locating and identifying the defendant’s assets. The remaining disclosure orders were also appropriate. Compliance dates were fixed at 16 March for paragraph 2(a) and 23 March for the other provisions.
3. Privilege. The order should preserve the defendant’s right to claim privilege against self-incrimination. The validity of the claim, and whether reliance on it constituted a breach, were matters for the court. It was inappropriate to prescribe in advance the criteria governing that determination. IBM United Kingdom Ltd v Prima Data International Ltd [1994] 1 WLR 719 concerned safeguards in an Anton Piller context and was distinguishable because the present order allowed ample time for legal advice.
4. Contempt and directors. There was a good arguable case that the defendant had breached paragraph 13(e) by disposing of assets exceeding $25,000 without notice. The evidence also supported a good arguable case that the named individuals were aware of the order and were de jure, de facto or shadow directors or officers. The applicable test was knowledge of the order together with active participation in the breach or wilful failure to take reasonable steps to ensure compliance.
5. Service out. The proceedings were in the nature of a claim, and the individuals were at least proper parties. Order 45 supplied a statutory gateway. Following the distinction in Masri v Consolidated Contractors International Company SAL & Ors [2009] UKHL 43, the narrower category of officers responsible for compliance under Order 45 was materially different from officers required merely to attend for examination under CPR Part 71. The distinction from In re Seagull Manufacturing [1993] Ch 345 did not prevent jurisdiction. It would defeat enforcement if responsible officers escaped jurisdiction solely because they were abroad.
6. The claimant was awarded the costs of the original application, variation application and return hearing. The costs were summarily assessed at £175,000.