Gulf Air BSC(C) v One Inflight Ltd & Ors

A freezing order requires solid evidence of a real and current risk that a judgment will be frustrated by unjustified dealings with assets. Allegations of fraud do not automatically establish that risk, but the court must scrutinise the particular allegations and may treat past conduct as relevant where it illuminates the present risk.

For service out of the jurisdiction, the claimant must establish a serious issue to be tried, a good arguable case within a jurisdictional gateway, and that England is the appropriate forum. Inspection of electronic devices may be ordered where it is necessary and proportionate, especially in a fraud case involving predominantly electronic communications, subject to safeguards for privilege, confidentiality and irrelevant material.

Gulf Air brought fraud-related claims against several defendants arising from an in-flight entertainment contract allegedly procured through a non-existent company. The applications concerned discharge or continuation of a worldwide freezing order, challenges by Inflight and Epcon to service out of the jurisdiction, and inspection of electronic devices.

The court considered whether there was a good arguable case against the corporate defendants, whether there was a real risk of dissipation, whether Gulf Air had breached its duty of full and frank disclosure, and whether inspection orders were necessary and proportionate.

1. Freezing order. The applications by Mr Hirani, Inflight and Epcon to set aside the Freezing Order were dismissed. A freezing order requires a real risk of unjustified dissipation supported by solid evidence. A general allegation of dishonesty is insufficient, but the court must examine the particular allegations. Here, the alleged fraud, use of corporate structures, offshore connections and uncertainty about the defendants’ dealings provided powerful evidence of risk. Past conduct remained relevant because it illuminated the current risk in the context of an unresolved alleged scheme.
2. Jurisdiction. The challenges by Inflight and Epcon were dismissed. The claimant had to show a serious issue to be tried, a good arguable case within the relevant gateway, and that England was the appropriate forum. A good arguable case requires a plausible evidential basis and, where possible, a reliable view of the competing evidence. The requirement that a defendant be a necessary or proper party is satisfied where the claims involve one investigation or a sufficient common thread. The allegations that Inflight and Epcon facilitated or concealed participation in the alleged scheme were sufficient to meet that threshold.
3. Full and frank disclosure. The complaint concerning the description of the Singapore bank account was rejected. In context, the use of “know” in counsel’s submissions conveyed the position understood or believed to be correct and did not amount to a guarantee of objective fact. The distinction between knowledge and belief did not establish a material non-disclosure. In any event, the alleged omission was neither substantial nor deliberate, and the interests of justice favoured continuation of the order.
4. Electronic devices. Gulf Air’s application to amend and continue the Electronic Devices Order was granted in revised form. Inspection was necessary and proportionate because the alleged fraud was conducted largely through electronic communications and inspection of an existing laptop had already produced relevant evidence. The order was to include safeguards for privilege, irrelevant material, confidentiality and collateral use, including an express undertaking reflecting CPR 31.22.