Ammar Al Assam & Ors. v Dimitrios Tsouvelekakis

The court granted a worldwide freezing injunction under its s37 Senior Courts Act 1981 jurisdiction after finding the classic requirements were met. The judge accepted that the claimants had a good arguable case, that the defendant had assets both within and outside the jurisdiction and that there was a real risk of dissipation of assets. The risk of dissipation was supported by the pleaded causes of action (notably claims for breach of fiduciary duty, dishonest assistance and deceit arising from allegedly false portfolio reports), the defendant's unexplained or misleading statements in evidence and his capacity to use complex offshore arrangements. The court considered delay and the defendant's character and concluded the delay was not such as to defeat the application. The judge made the freezing order and reserved the costs of the application.

Background and nature of the application.

The claimants, beneficiaries and related trust companies of two Cyprus-governed trusts (the AAA Trust and the Hamza Trust), applied for a worldwide freezing injunction against their long-term advisor, the defendant, in relation to alleged losses from a series of investments and alleged misreporting of trust assets. The substantive pleadings include claims in negligence, breach of fiduciary duty, deceit, dishonest assistance, an alternative Swiss tort claim and a contractual claim under Swiss law by the two trust companies that held the assets.

Key facts.

• The trusts held underlying asset companies (AAA Group Inc and Hrostenco Corporation) with custody/brokerage accounts at a Swiss financial entity (Kendra).
• The claimants complain principally about five matters: substantial investments in Rolaware and Dremoplex, payments to a Mme Lisa Locca, payments to the Givols, and payments to NewLead JMEG LLC, and about ongoing portfolio reports provided by the defendant (the DT Portfolio Reports) which allegedly misrepresented holdings and cash balances.
• The defendant accepted for the purposes of the freezing hearing that the claimants have a "good arguable case" but denied wrongdoing and argued there was no real risk of dissipation.

Procedural posture.

The defendant had earlier mounted a jurisdictional/forum non conveniens challenge which was rejected by Judge Richards ([2022] EWHC 451 (Ch)). This hearing before HH Judge Davis-White QC followed a two-day inter partes hearing on 19 and 20 May 2022 on the claimants' freezing order application; the detailed reasons were handed down on 11 August 2022.

Issues for decision.

• Whether the claimants had a good arguable case on the pleaded causes of action.
• Whether the defendant had assets inside and outside the jurisdiction and whether assets within the jurisdiction were likely insufficient to satisfy any judgment.
• Whether there existed a real risk of dissipation or concealment of assets such as to render enforcement of a judgment insecure.
• Whether any delay in bringing the application or other discretionary factors weighed against granting the freezing relief.

Court's reasoning and conclusion.

The judge accepted the concession that there was a good arguable case and, on the evidence adduced, considered that the causes of action—especially the allegations of deceit (false portfolio reports), dishonest assistance and breaches of fiduciary duty—gave rise to a relevant risk of dissipation. The court found evidence raising concerns about the defendant's factual explanations in affidavit evidence, and noted his ability and opportunity to use complex offshore structures. The judge analysed and rejected the contention that delay was fatal, accepting that substantial and necessary investigations (including obtaining Kendra documents and other materials) made the timing reasonable. Balancing these matters, the court concluded it was just and convenient to grant the worldwide freezing order. The judge reserved the costs of the application and explained the reasons for doing so, discussing authority on the general principle that costs of interlocutory freezing applications are usually reserved and outlining when departures from that starting position are appropriate.

The application for a worldwide freezing order was granted. The court held that the claimants had a good arguable case, that there were assets of the defendant inside and outside the jurisdiction and that there was a real risk of dissipation supported by allegations of deceit, dishonest assistance and other fiduciary breaches and by unsatisfactory aspects of the defendant's evidence and conduct. Delay was considered but not held to be unjustifiable. Costs of the freezing application were reserved for the reasons set out in the judgment.