Integral Petroleum SA v Petrogat FZA & Ors

A freezing injunction requires a good arguable case, a real risk that a future judgment will be defeated by unjustified asset dissipation, and justice in all the circumstances. Delay does not by itself defeat the application where the risk remains established.

For service out under a claim brought pursuant to Insolvency Act 1986, section 423, the claimant must show a serious issue to be tried, a good arguable case that a jurisdictional gateway applies, and England as the clearly or distinctly appropriate forum. A sufficient connection may arise where the claim seeks to prevent frustration of an award made by a London arbitral tribunal and enforced by the English court.

Alternative service in a Hague Convention country requires special or exceptional circumstances. The urgency and coercive nature of a worldwide freezing order may satisfy that requirement.

Integral Petroleum sought, without notice, a worldwide freezing order, associated asset-disclosure orders, permission to serve proceedings out of the jurisdiction, and permission for alternative service.

The intended substantive claim was under section 423 of the Insolvency Act 1986. Integral alleged that Petrogat, acting through the other respondents, had transferred substantial sums for no or inadequate consideration with the purpose of putting assets beyond Integral’s reach.

The application arose against the background of unpaid LCIA awards concerning converted fuel-oil cargo. The awards had been entered as judgments and a receiver had been appointed, but the respondents had not paid or disclosed the destination of transferred funds. The central issues were whether the requirements for freezing relief, service out, and alternative service were satisfied.

1. Freezing relief. Integral established the three necessary requirements: a good arguable case on the merits, a real risk that a future judgment would not be met because of unjustified dissipation, and that it was just in all the circumstances to grant relief. The evidence supported an inference that the transfers lacked adequate consideration and that the respondents had participated in transactions potentially falling within section 423 of the Insolvency Act 1986.
2. The respondents’ contempt of court, refusal to pay the LCIA awards, failure to co-operate with the receiver, refusal to identify the destination of the funds, and inconsistent evidence about Petrogat’s assets constituted solid evidence of a real risk of dissipation. The delay since November 2020 was not, by itself, a reason to refuse relief where that risk remained established.
3. Further asset disclosure was necessary to give the freezing order practical effect. The inconsistent evidence about whether Petrogat remained an active trading company required clarification on oath.
4. Service out. Integral showed a serious issue to be tried, a good arguable case that the claim fell within paragraph 3.1, subparagraph 20 of Practice Direction 6B, and England as the clearly or distinctly appropriate forum. Although the parties, transfers, and assets were abroad, the claim was substantially connected with England because it concerned efforts to frustrate a London arbitral award enforced by the English court.
5. Alternative service. Under CPR 6.15 and 6.37(5)(b)(i), the court could order service by an alternative method. Special or exceptional circumstances existed, including the urgency of service of a coercive worldwide freezing order, the respondents’ dishonest conduct and evasiveness, the risk of contempt proceedings, and the absence of residential addresses for some respondents. Email service on the Kazakhstan respondent was valid under Kazakh law and was not prohibited by CPR 6.40(4).
6. The worldwide freezing order, disclosure orders, permission for service out, and alternative-service orders were granted.