CE Energy DMCC v Ultimate Oil and Gas DMCC & Anor

A worldwide freezing order requires a plausible evidential basis for a real risk that assets will be dissipated. The risk must be assessed separately against each respondent and cumulatively, by reference to all the circumstances. The strength of the claim, dishonoured cheques, non-payment, unsatisfactory conduct and incomplete disclosure may support an inference of risk, but none is necessarily sufficient alone. A freezing order is not security for a debt. Where substantial disclosed assets, including real property and cargo providing practical security, exist and there is no primary evidence of dissipation or specific trigger event, the order should be discharged.

The claimant sought continuation of a worldwide freezing order granted ex parte against Ultimate Oil and Gas DMCC and its sole owner, Alhaji Abdulrahman Musa Bashar. The order supported court proceedings against Mr Bashar under a personal guarantee and LCIA arbitration proceedings against Ultimate. The defendants accepted that the claimant had a strong arguable claim but applied to discharge the order, principally contending that there was no evidence of a risk of dissipation. The claimant relied on dishonoured cheques, non-payment, incomplete asset disclosure, prior contempt proceedings and the defendants’ conduct. The central issue was whether the evidence established a risk of dissipation against either defendant.

1. Disposition. The worldwide freezing order was discharged. The claimant’s application for further disclosure was dismissed. Retrospective permission was granted, to the extent necessary, for a US$75,000 payment.
2. The principles stated in Petroceltic Resources Limited & Ors v David Fraser Archer [2018] EWHC 671 (Comm) applied. The claimant did not need to prove risk on the balance of probabilities, but had to establish an arguable case or plausible evidential basis. The risk had to be established separately against each respondent. The purpose of the order was not to provide security, and the assessment was fact-specific and cumulative.
3. The burden remained on the claimant, as emphasised in Holyoake v Candy [2018] Ch 296. An adverse inference from an unsatisfactory explanation could arise only after the claimant had produced material from which a real risk could be inferred.
4. The defendants’ conduct was unsatisfactory and the claimant’s merits were strong. However, dishonoured cheques and failure to pay debts did not themselves establish dissipation, consistently with Les Ambassadeurs Club Limited v Albluewi [2020] EWHC 1313 (QB). The claimant’s continued dealings with the defendants after knowledge of the earlier Sahara litigation also weakened reliance on that history. The period during which the parties had been litigating without a specific trigger event was a further factor against the order, in accordance with Ivy Technology v Martin [2019] EWHC 2510.
5. Mr Bashar had disclosed assets substantially exceeding the order’s value, much of it in real property. The cargoes also provided some practical security. Although the disclosure was incomplete and unsatisfactory, there was no primary evidence that either defendant had attempted improperly to dispose of assets. The court was therefore not satisfied that any risk of dissipation existed.
6. The complaints of inadequate full and frank disclosure on the ex parte application were rejected. The obligation was fundamental but had to be applied realistically on the matters raised.