Lenkor Energy Trading DMCC v Irfan Iqbal Puri

The inclusion of an Angel Bell exception in a post-judgment worldwide freezing order is a discretionary question turning on all the circumstances. There is no automatic presumption, but it will sometimes, and perhaps usually, be inappropriate to permit the judgment debtor to continue dealing with assets in the ordinary course of business after judgment. The court should consider the policy favouring enforcement, the risk of dissipation, and the impact of removal on the debtor’s business. A party seeking to retain the exception should provide evidence explaining that impact, including the nature of the business and the relevant expenditure. The discretion may be exercised afresh where judgment creates a material change of circumstances.

The claimant obtained a Dubai judgment against the defendant and subsequently secured English summary judgment enforcing that judgment. The Court of Appeal rejected the defendant’s appeal, and the Supreme Court refused permission to appeal. The English judgment thereby became final and enforceable.

The claimant renewed its application to delete paragraph 11(b) of a worldwide freezing order. That paragraph permitted the defendant to deal with assets in the ordinary and proper course of business. A similar application had been dismissed in 2019 because no enforceable English judgment then existed. The issue was whether the final English judgment and the evidence justified removing the exception.

1. Fresh exercise of discretion. The entry of the English judgment was a material change of circumstances which entitled the court to reconsider the exception afresh.
2. Applicable approach. The court applied the guidance in Emmott v Wilson [2019] EWCA Civ 219. Whether an Angel Bell exception should remain in a post-judgment freezing order turns on all the facts. Refusal is neither an automatic starting point nor a remedy confined to last resort. The more draconian the relief, the greater the need for justification.
3. The policy of the law strongly favours enforcement of judgments. In the context of an established risk of dissipation, it may be inappropriate to leave a judgment debtor free to carry on business while ignoring the outstanding judgment. The guidance from Nomihold was relevant to that assessment.
4. A party seeking to retain the exception should explain the effect of its removal on the business. The court accepted the relevance of the observations in Tidewater Marine International Inc v Phoenixtide Offshore Nigeria Ltd [2015] EWHC 2748 (Comm) and Halifax v Chandler [2001] EWCA Civ 1750 concerning the need for evidence of available assets and the consequences of freezing relief.
5. On the evidence, there was no adequate explanation of the defendant’s business, expenditure, profits or losses, or of the destination of misappropriated funds. Allegations of dishonesty and want of probity had also gone unanswered. Other matters, including the repossession of a property, alleged breaches concerning bank disclosure and alleged evasion of service, were either unsupported or not relied upon.
6. The application was granted. The worldwide freezing order was varied by deleting paragraph 11(b). The defendant remained free to apply to reinstate the exception, but would need to provide much fuller evidence.

The judgment records that a previous application to remove the exception was dismissed in 2019 as premature because no enforceable English judgment existed. Summary judgment was later granted by Master Davison on 23 January 2020. An appeal was rejected by Murray J on 4 June 2020, and the Court of Appeal rejected a further appeal by order dated 21 May 2021. The Supreme Court refused permission to appeal on 12 May 2022.