Third-party assets controlled (de facto or de jure) by the respondent are ordinarily outside the scope of a freezing injunction unless exceptional circumstances can be established.

By Oliver E. Browne and George Schurr

In the recent case of FM Capital Partners Ltd v Frédéric Marino, Aurélien Bessot, Yoshiki Ohmura, and Marit Sjovaag [2018] EWHC 2889 (Comm), the English High Court held that if a company wholly owned or controlled by the respondent is a non-trading company without an active business, and the respondent deals with or disposes of that company’s assets outside the ordinary course of business, that conduct may be enjoined by the terms of a freezing injunction. These are exceptional circumstances that brought the third party’s assets within the scope of the order. In all other circumstances, the proper course of conduct is for an application to be made to join the third party as a respondent to the order itself.

Facts

A Worldwide Freezing Order (WFO) was granted in July 2018 following the High Court’s judgment against Mr Ohmura (the Respondent) for his dishonest assistance in acts of bribery and breaches of fiduciary duty by Mr Marino (the First Defendant). The terms of the WFO, as issued, prohibited the Respondent from disposing of, diminishing in value, or otherwise dealing with his assets up to a value of US$11,250,000.