Les Ambassadeurs Club Ltd v Albluewi (aka Sheikh Salah Hamdan Albluewi And Mr Salah Hamdan Albelwi)

A worldwide freezing order requires solid evidence of an objectively real risk that assets will be dissipated or dealt with so as to frustrate enforcement. The risk must concern unjustified dissipation; an intention to defeat enforcement is unnecessary, but ordinary and legitimate dealings are insufficient. Offshore structures, foreign residence, unenforceable assets and indebtedness do not alone establish the risk. The court must assess all relevant factors cumulatively and on the evidence available at the inter partes hearing.

An applicant must present a fair and balanced account of all material facts and potential weaknesses, supported by proper inquiries and clear signposting. Material non-disclosure may justify discharge even where innocent, although the court retains a limited discretion to continue or regrant relief. A freezing order is not security for a debt and must also be just and convenient.

The claimant, a licensed Mayfair casino, claimed £2 million plus contractual interest from the defendant under dishonoured cheques and/or a loan facility. On 6 February 2020, Cavanagh J granted a without-notice worldwide freezing order. Waksman J continued it in revised form on 17 February 2020.

The claimant sought continuation. The defendant sought discharge, contending that there was no real risk of dissipation, that continuation was not just and convenient, and that the claimant had failed to make full and frank disclosure. The central issues were whether the evidence established a real risk of unjustified dissipation and whether the claimant’s presentation of the without-notice application was materially incomplete or misleading.

1. Applications and outcome. The claimant’s application to continue the worldwide freezing order was dismissed. The defendant’s application to discharge it was allowed. There was no regrant because the claimant had failed to establish a real risk of dissipation.
2. Real risk of dissipation. The claimant bore the burden of proving, by solid evidence, an objectively real risk that a judgment would remain unsatisfied because the defendant would dissipate assets or deal with them so as to make enforcement more difficult. Subjective intention was unnecessary. The relevant factors had to be assessed cumulatively. Non-payment, promises to pay, foreign residence, unenforceable assets in Saudi Arabia and debts to other casinos were not individually decisive.
3. The defendant’s substantial assets in Jersey, reciprocal enforcement, valuable London property, business connections with London, absence of evidence of dissipation during the relevant period and previous repayment of defaults materially weakened the alleged risk. Offshore structures did not themselves establish dissipation. The claimant had chosen to deal with the defendant in the light of those circumstances.
4. The inter partes court had to decide the matter on the whole evidence then available, rather than confining itself to the evidence before the without-notice judge. On that evidence, the risk was not established.
5. Full and frank disclosure. The claimant had materially failed to disclose the defendant’s previous defaults, the significance and value of his London property, and the resulting weaknesses in its dissipation case. The court had also not been fairly alerted to the discount issue. Materiality did not depend on bad faith or on whether the original judge might nevertheless have granted relief. The failures were directly relevant to the risk of dissipation and justified discharge.
6. A freezing order was a draconian remedy and not a form of security. Questions concerning its utility, foreign enforcement and its effect on the defendant also required careful consideration before any continuation.