Ras Al Khaimah Investment Authority v Farhad Azima

A post-judgment worldwide freezing order may be granted where the judgment creditor shows a good arguable case, assets within or outside the jurisdiction, a serious risk of dissipation, and that the order is just and convenient. The possibility that assets may already have been dissipated does not prevent relief where some assets may remain. An order may require a judgment debtor to procure or permit companies which it owns or controls to preserve assets, including assets held outside the jurisdiction. Comity concerns depend on the substance and relationship of foreign proceedings; they do not arise where the English order supports English judgments and complements, rather than interferes with, foreign proceedings.

Farhad Azima applied in private and without notice for a worldwide freezing order against Ras Al Khaimah Investment Authority after obtaining substantial unpaid judgments against it. The judgments arose from proceedings in which earlier judgments in RAKIA’s favour had been set aside for fraud, and from a judgment on RAKIA’s hacking counterclaim.

The application was prompted by the apparent sale of a Georgian hotel owned by RAKIA’s wholly owned subsidiary, together with the transfer of another Georgian asset. The central issues were whether the requirements for post-judgment freezing relief were met, whether the order could extend to assets controlled through subsidiaries, and whether Georgian proceedings, comity or delay made relief inappropriate.

1. Application granted. The court was satisfied that the requirements for a worldwide freezing order were met. The unpaid judgments established a good arguable case on the merits. The Georgian companies and their assets satisfied the assets limb. RAKIA’s dishonest conduct, failure to pay the judgments and apparent steps to become judgment-proof established a serious risk of dissipation.
2. The possibility that the proceeds had already been dissipated was not a reason to refuse relief. The order remained justified if there was some chance that assets remained.
3. The justice and convenience balance favoured relief. RAKIA v Bestfort Development, reported at [2018] 1 WLR 1099, concerned an application under section 25 of the Civil Jurisdiction and Judgments Act 1982, where substantive relief was being sought in Georgia and the evidence concerning those proceedings was inadequate. The present case was materially different: the substantive judgments had been obtained in England, the order was directed against RAKIA as judgment debtor, and the English and Georgian proceedings were complementary. There were therefore no material comity concerns.
4. The order could require RAKIA to procure or permit directly or indirectly owned or controlled bodies corporate to preserve assets. RAKIA’s control over significant decisions of its wholly owned subsidiary justified wording extending to assets held by that subsidiary and potentially other controlled entities. The wording could be varied on application if it proved too wide.
5. No fortification of Azima’s cross-undertaking was required because RAKIA owed more than £20 million, which was sufficient protection for any loss caused by the injunction. The usual restriction on foreign enforcement was retained for other jurisdictions but excluded Georgia. RAKIA was also ordered to disclose its assets within 72 hours of service, followed by affidavit disclosure within five working days.