FW Aviation (Holdings) 1 Limited v VietJet Aviation Joint Stock Company

A post-judgment freezing order still requires proof of a real risk that the judgment will go unsatisfied because of unjustified dissipation of assets. The applicant must provide solid and cogent evidence of active steps to frustrate enforcement. Mere non-payment by a defendant able to pay is insufficient. The court assesses the evidence cumulatively, but ordinary-course transactions do not become dissipation merely because they occur after judgment. Dividends, transfers of future aircraft deliveries to subsidiaries, and purchase orders for new aircraft may fall within ordinary business activity, particularly where they do not dispose of assets available for enforcement. The court need not decide whether relief is just and convenient if the dissipation hurdle is not met, although the potentially severe impact of a worldwide order on an operating business requires particular care.

Following liability and quantum judgments requiring VietJet to pay substantial sums to FWA, and after VietJet made only a US$2 million payment, FWA applied for worldwide freezing order relief. The Court of Appeal had dismissed VietJet’s appeal against the liability judgment.

FWA relied on VietJet’s prior conduct, allegedly misleading statements about raising funds, a proposed dividend, transfers of future aircraft deliveries to subsidiaries, and substantial aircraft and engine purchase orders. The central issue was whether those matters established a real risk of unjustified dissipation sufficient to justify post-judgment relief.

1. Application refused. The fourfold freezing-order test requires a good arguable case, a real risk that a judgment will not be satisfied because of unjustified dealing with assets, assets within the injunction’s geographical scope, and a conclusion that relief is just and convenient. The good arguable case requirement was necessarily satisfied post-judgment, but the dispute concerned risk of dissipation and, if necessary, justice and convenience.
2. The relevant risk is assessed objectively. It must be established by solid and cogent evidence, although proof on the balance of probabilities is unnecessary. The distinction is between a defendant who can pay but refuses to do so and one determined to frustrate recovery by transferring, concealing or otherwise unjustifiably dissipating assets. A post-judgment context may provide an incentive to dissipate, but does not itself establish the risk.
3. The court considered the evidence cumulatively. VietJet’s earlier conduct was too old and insignificant, particularly since it had remained fully engaged in the litigation without any earlier freezing-order application. There was no sufficient basis for finding that statements about raising finance had misled the court.
4. The proposed dividend was an aspect of ordinary-course business activity. Its post-judgment timing did not make it improper or unjustified, and it was uncertain whether any dividend would be paid in cash or shares. The transfers concerned future aircraft which were not VietJet assets and therefore could not constitute dissipation of assets available for enforcement. They were also ordinary business transactions.
5. The aircraft and engine purchase orders involved acquiring, rather than disposing of, assets. The orders had been planned over many months, required only relatively modest near-term payments, and were not shown to have been provoked by the judgment. They therefore provided no evidence of dissipation, whether considered individually or cumulatively.
6. Since the dissipation hurdle was not overcome, the just-and-convenient limb did not arise. The judge nevertheless observed that a worldwide order affecting an active and growing airline would require great care because of its potentially severe chilling effect on ordinary commercial operations.

The judgment records that VietJet’s appeal against the earlier liability judgment was dismissed by the Court of Appeal. The present application was determined at first instance by the Commercial Court.