English courts continue to set tone on WFO enforcement

Alan Sheeley, a civil fraud and asset recovery expert at Pinsent Masons, was commenting following a recent judgment by the Court of Appeal of England and Wales which underscores the English courts’ view that freezing orders do not affect or concern non-respondents outside of their jurisdiction.

The case relates to a dispute between a shipping company that obtained a WFO in 2011 against the owner of another shipping company over alleged breach of contract and claims of damages for unlawful means of conspiracy.

Contrary to case law, at first instance, the deputy judge ruled that the ‘Babanaft proviso’ precluded any liability for unlawful means of conspiracy. The Babanaft proviso is a standard provision in WFOs which identifies the categories of people based outside the jurisdiction who are and who are not affected by the order.

This case reached the Court of Appeal, which found that the standard wording of the Babanaft provision does not prevent parties based outside the jurisdiction from avoiding civil liability for unlawful means of conspiracy when they knowingly help a defendant breach an English freezing order.

The court unanimously upheld an earlier decision by the Supreme Court in a similar case that no such defence is available. The court overturned the first instance decision and held the respondents liable for tortious conduct.

The decision highlights the English courts’ continued willingness to develop the law and practice around freezing orders and their approach to comity. It also provides significant context for any businesses navigating complex enforcement scenarios, Sheeley said.