Camper & Nicholsons International Limited v Timothy Langmead

For an application under Arbitration Act 1996 sections 44 and 2(3) in support of a foreign-seated arbitration, the court applies a two-stage inquiry. It first asks whether the order would be granted in equivalent English proceedings, applying the ordinary freezing-order principles. It then considers whether the foreign seat makes relief inappropriate or inexpedient, including issues of comity.

Dishonesty does not automatically establish a real risk of dissipation. Where the alleged dishonesty is intimately connected with the claims and involves concealment or diversion of assets, however, the inference may readily arise. A worldwide order requires clear evidence of extra-territorial activity. In its absence, a domestic order is appropriate.

The claimant sought, without notice, a worldwide freezing order against its former employee or consultant in support of proposed arbitration proceedings seated in Switzerland. It alleged that the defendant had diverted commissions and charter referrals, misused its name and intellectual property, conducted valuation work while holding himself out as connected with the claimant, and diverted business after termination.

The arbitration had not yet commenced. The court considered urgency, jurisdiction under Arbitration Act 1996 sections 44 and 2(3), arguable merits, risk of dissipation, delay, full and frank disclosure, the territorial scope of relief, comity, and fortification.

The application was granted in part. The court made a domestic freezing order, subject to undertakings and £30,000 fortification, but declined to make a worldwide order.

1. Jurisdiction and structure. Sections 44 and 2(3) of the Arbitration Act 1996 require a two-stage inquiry. The court first asks whether the order would be granted if the arbitration were seated in England. It then asks whether the foreign seat makes the order inappropriate or inexpedient, applying considerations of comity and quasi-comity.
2. Arbitration not yet commenced. The court may act where the tribunal cannot presently act effectively. The claimant was required to undertake to commence the Swiss arbitration promptly.
3. Arguable case. Applying the realistic arguability threshold, the evidence supported claims that commissions and referral fees had been diverted to personal or Evendine accounts, business had been redirected, listings had not been disclosed, and valuation services had been conducted while the defendant held himself out as connected with the claimant.
4. Risk of dissipation. Alleged dishonesty does not automatically establish that risk. Here, the alleged false representations, fictitious identities, forged documents, misuse of intellectual property and diversion of funds were intimately connected with the claims. They therefore supported an inference of a real risk that assets might be removed or concealed to defeat enforcement.
5. Territorial scope. A worldwide freezing order is potentially exorbitant and should not be made without clear evidence of extra-territorial activity. The evidence showed that the defendant lived and worked in London and did not establish recent foreign assets or accounts. An English domestic order was therefore appropriate. The Swiss seat did not make that limited order inappropriate or inexpedient.
6. Ancillary safeguards. The order was conditional on a prompt arbitration undertaking, supplemental evidence addressing full and frank disclosure, and £30,000 paid into the claimant solicitors’ client account as fortification, subject to review at the return date.