Trans-Oil International SA v (Savoy Trading LP & Anor

A freezing injunction cannot be served out of the jurisdiction against a person who is not shown by a good arguable case to be a party to, or personally liable under, the relevant contract. Service under CPR 62.5(1)(c) is available only against a party to the arbitration agreement. The court also declined to accept that section 44 of the Arbitration Act 1996 permits orders against a non-party. A freezing injunction requires evidence sufficient to establish a real risk of dissipation; speculation, non-engagement and a complex partnership structure are insufficient. CPR 81.4(3), which addresses directors and officers of corporations, does not extend to partners or de facto partners.

Trans-Oil International SA applied without notice to vary a worldwide freezing order made against Savoy Trading LP by adding Ivan Melnykov personally, or alternatively by naming him in the penal notice. It also sought permission for service out and alternative service under CPR 6.36 and CPR 62.5.

The underlying dispute concerned a wheat sale contract incorporating GAFTA arbitration terms. Savoy Trading was a Scottish limited partnership and was subject to sequestration. The central issues were whether the court had jurisdiction over Mr Melnykov as a contracting party, personally liable agent or Chabra defendant, whether the evidence established a real risk of dissipation, and whether CPR 81.4(3) applied to a partner or de facto partner.

The application was refused.

1. Jurisdiction under CPR 6.36. The applicant had not shown a good arguable case that Mr Melnykov was a party to the contract or personally liable under it. Service of a notice of arbitration did not itself establish jurisdiction. The evidence did not show that Savoy Trading lacked authority to contract, that Mr Melnykov was personally liable for any resulting obligation, or that he contracted as agent for an undisclosed principal. The nominee declaration and power of attorney were insufficient.

2. The court followed Linsen International Ltd v Humpuss Sea Transport Pte Ltd [2011] EWHC 2339 as discussed and followed in Cruz City 1 Mauritius Holdings v Unitech Limited [2014] EWHC 3704 (Comm). The necessary-and-proper-party gateway was therefore unavailable on the evidence.

3. Jurisdiction under CPR 62.5. Following Cruz City and DTEK Trading SA v Morozov [2014] EWHC 94, the court held that permission under CPR 62.5(1)(c) could not be granted against a non-party to the arbitration agreement. The court also followed their reasoning that section 44 of the Arbitration Act 1996 did not permit orders against a non-party, notwithstanding the conflicting authorities referred to by the applicant.

4. Substantive relief. Even if jurisdiction existed, the evidence did not establish a real risk that Mr Melnykov would dissipate assets. The alleged omissions, the partnership structure, and speculation that funds might have reached him did not provide sufficient evidence for a draconian freezing order.

5. Penal notice. CPR 81.4(3) applies to directors or officers of corporations and should not be extended to partners or de facto partners. The court also found, on the evidence, no good arguable case that Mr Melnykov was a de facto partner. The alternative application was refused.