The Public Institution for Social Security v Al Rajaan & Ors

Further disclosure supporting a worldwide freezing order or proprietary claim must be justified by practical utility and must remain proportionate. Where evidence shows a significant discrepancy between assets previously received and assets disclosed, the court may order targeted, incremental disclosure directed to particular transactions or assets. A claimant need show a real prospect that the information may lead to the location or preservation of relevant assets; it need not establish that the exercise will ultimately succeed. The court may require reasonable inquiries, but need not order a defendant to investigate assets in which he unequivocally claims no interest. Information already accessible to the claimant through another lawful source may properly be obtained from that source instead. Relief under CPR 25.1(1)(g) may extend to assets not presently subject to a freezing order where information may support their inclusion.

The claimant, the State of Kuwait’s social security institution, alleged that its former Director General had received substantial secret commissions through financial institutions and intermediaries. A worldwide freezing order had been granted in October 2019, together with an asset-disclosure obligation. The claimant applied for further disclosure to trace alleged commission proceeds, obtain information about trusts and companies, clarify previously disclosed assets, and vary the freezing order to include additional assets.

The application followed disclosure which, on the claimant’s case, revealed a substantial discrepancy between sums received and assets disclosed. The defendant resisted the relief on grounds including proportionality, alleged oppression, comity, foreign law and the speculative nature of the tracing exercise. The central issues were whether further disclosure was justified and what scope of relief was proportionate.

1. Application substantially granted. The court ordered targeted further disclosure in relation to specified transfers, the disposal of assets of Bernabeu Investments Ltd and Bordertown Trader Ltd, current assets of the Dukesmews and Myrose trusts, certain bank accounts and company officers, and the inclusion of additional disclosed assets in the worldwide freezing order. Other requests, including disclosure concerning the Gemcut transfer, older Evelyn Assets transfers, the St Moritz property and certain accounts, were refused or deferred.
2. Disclosure supporting a freezing order is justified where it is necessary to make the order effective, has practical utility and is proportionate. The court must guard against further evidence being sought for collateral purposes, such as pressure, contempt material or assistance in foreign proceedings. The approach in JSC Mezhdunarodniv Promyshlenniy Bank v Pugachev (No 2) [2015] EWHC 1694 (Ch) was applied.
3. For proprietary disclosure, the claimant must show a real prospect that the information may lead to the location or preservation of assets subject to the proprietary claim. An incremental first-stage inquiry may be ordered even though later stages may be required. Proportionality remains essential, particularly where a complete tracing exercise would be very expensive.
4. The evidence established a significant unexplained discrepancy between the sums allegedly received and the assets disclosed, even allowing for lifestyle expenditure, other wealth and possible assets held by nominees. That discrepancy materially supported targeted further disclosure.
5. A defendant subject to an asset-disclosure order must take reasonable steps to investigate information concerning assets in which he has or had an interest. The obligation does not ordinarily require inquiries of persons concerning assets in which the defendant unequivocally asserts that he has no interest or right to information.
6. Under CPR 25.1(1)(g), the court may require information about property or assets not presently within a freezing order where the information may lead to their inclusion. The power supported limited disclosure concerning the Myrose and Dukesmews trusts, but the relief was confined to current assets because wider inquiries were insufficiently justified.

First-instance decision of the High Court (Commercial Court). The judgment records an earlier worldwide freezing-order decision in the same proceedings: [2019] EWHC 2886 (Comm). No appeal is stated.