Ras Al Khaimah Investment Authority & Ors v Bestfort Development LLP

Relief under section 25 of the Civil Jurisdiction and Judgments Act 1982 requires the applicant to satisfy both limbs of the statutory test. The court must be satisfied that equivalent relief would be granted if the substantive proceedings were brought in England, and may also refuse relief where its extraterritorial effect would be inexpedient.

Applicants seeking freezing relief must provide evidence of assets capable of being frozen and, where relevant, a real risk of dissipation. The court should not use disclosure provisions to trace assets in a personal claim where no proprietary remedy is sought. Receivership and compelled powers of attorney are exceptional, intrusive remedies and should not be used merely to circumvent another state’s policy on recognition and enforcement.

Six Ras Al Khaimah entities sought freezing orders and the appointment of receivers over 14 English limited liability partnerships. The relief was sought under section 25 of the Civil Jurisdiction and Judgments Act 1982 in support of damages and declaratory claims brought in Georgia and the UAE against former director and manager Gela Mikadze and others.

The applicants alleged fiduciary breaches, fraud, diversion of assets and transactions involving entities beneficially owned by Mr Mikadze. The central issues were whether there was a good arguable case, whether the respondents had assets which could effectively be frozen, whether there was a sufficient risk of dissipation, and whether granting relief would be inexpedient because of the foreign proceedings.

1. First limb of section 25. The applicants had arguable claims against Mr Mikadze and certain respondents, and a sufficiently arguable case that all respondents were beneficially owned by or connected with him. That was insufficient to justify relief.
2. The applicants had not shown that the respondents presently held substantial assets capable of being frozen. Historic accounts and evidence of former Latvian bank accounts did not establish current assets. The burden rested on the applicants; Mr Mikadze was not required to prove what had happened to former assets.
3. Any order was also unlikely to be effective in Latvia. The expert evidence indicated that Latvian banks would probably not recognise receivers or a power of attorney signed pursuant to compulsion or solely by authority of the English court. The proposed receivership and power of attorney were exceptionally intrusive, expensive and liable to impede related proceedings in Georgia.
4. The applicants had not established a sufficient risk of dissipation. Serious allegations of dishonesty, offshore structures and a guilty plea did not, without more, establish that assets existed and were likely to be dissipated. Delay, compliance with existing court orders and the absence of previous disobedience weighed against relief.
5. The proposed disclosure provisions were directed to tracing money formerly held by the respondents. Following A v C and A. J. Bekhor & Co Ltd v Bilton, that was not legitimate in the absence of a proprietary claim.
6. Under the second limb, granting relief would be inexpedient. It risked cutting across the Georgian courts’ decisions concerning interim protection and freezing assets over which those courts regarded themselves as having exclusive jurisdiction. The applications were dismissed.