Freezing by Skype

24/04/20

On 15 April 2020, Richard Blakeley and Ben Woolgar obtained a worldwide freezing order in the sum of US$46 million in a shipping finance dispute, appearing over Skype for Business, in one of the first remote without notice hearings before the Commercial Court during the pandemic.

The underlying dispute concerns lending to Nevis group of companies for investment in the ship recycling industry. The claimants pursue the defendants under a contracts of guarantee, and bring claims in deceit, alleging a sustained fraud on the lenders. The hearing involved the familiar questions of dissipation, as well as service out of the jurisdiction and alternative service.

More unusual, however, was obtaining such an order by video link. Novel points which emerged included how the applicants and the Court should deal the impossibility of swearing an affidavit in person (because affidavits are required rather than witness statements in applying for freezing orders), the need to give respondents to such an application adequate time in light of Covid-19 to meet their disclosure obligations, and whether lockdowns due to Covid-19 justified orders for alternative service.  As regards affidavits, the Court dispensed with the requirement for evidence on affidavit and permitted the applicants to rely on witness statements accompanied by a statement of truth.

The hearing also took place in circumstances in which the applicants and their legal team were under a duty of full and frank disclosure. This will need to be complied with, while making sure that electronic hearings are manageable and effective in circumstances where the Court is unlikely to have access to substantial hardcopy documents (in this case for example the exhibits numbered over 3,000 pages).