Celtic Resources Holdings v Arduina Holding BV (2006)
The applicant company, which had applied to continue a freezing order granted against the respondent, had failed to satisfy the relatively high burden of establishing a real risk that the respondent would dissipate its assets.
The applicant (C) applied to continue a freezing injunction which had been granted against the respondent (X). C had been the successful party in arbitration proceedings brought by X. The arbitrator made a costs award in C's favour. C was subsequently given permission to enforce that award as a judgment and judgment was thus entered in C's favour. The freezing order was granted in aid of the execution of that judgment. Prior to the arbitration hearing, the arbitrator had refused to exercise his discretion to grant C's application for security for costs. X argued the court should be wary of acceding to C's application for the continuation of the freezing order as it sought, in effect, to review the exercise of the arbitrator's discretion as to security. C argued that there was a real risk that X would dissipate its assets prior to the execution of the judgment.
(1) It was open to the instant court to grant and continue the freezing order whatever the arbitrator's decision. His functions were now over and his costs award had become a judgment of the court. The instant court was entitled to consider whether, on ordinary principles, C, as a judgment creditor, was entitled to a freezing order on the evidence put before it. Such an approach did not constitute a review of the arbitrator's decision but the exercise of an independent jurisdiction. (2) C had failed to satisfy the relatively high burden of establishing a real risk that X would dissipate its assets. X was part of a group of companies of considerable substance. There was no pattern of default in honouring awards or judgments, or evidence of administration or bankruptcy. X had had the opportunity to dispose of its assets at a time when there was no freezing order in place but there was an award requiring it pay a large sum in costs, and when it was apparent that C was seeking a freezing order. The fact that X had not done so was positive evidence that it was not likely to dispose of its assets in order to avoid having to honour the judgment.