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The Requirements for Applying for a Freezing Injunction

What is a freezing injunction? 

A freezing injunction is an interim order which prevents a party from accessing or disposing of assets in a way that prevents enforcement of an existing or potential future judgement. This includes money in the bank, property, cars, shares or business assets.  

What is the purpose of a freezing injunction? 

Longmore LJ stated in JSC BTA Bank v Solodchenko [2011] that “[t]he purpose of the [freezing] injunction is to preserve a defendant’s assets, subject to dealings in the ordinary course of business so that, if and when a judgment is pronounced, the defendant still has assets to meet that judgment.”1 Essentially, the purpose of a freezing injunction is to prevent the respondent from dissipating their assets or moving them abroad.  

Requirements to apply for a freezing injunction 

Freezing injunctions carry substantial implications, therefore the legal requirements which apply are different and more difficult than other types of prohibitory injunctions. The applicant is obligated to demonstrate a good arguable case, the existence of assets to which a freezing injunction could apply and a real risk that those assets could be dissipated in a bid to defeat enforcement of action. Furthermore, there must be a sufficient cause for the freezing injunction to be granted (e.g. the respondent has committed fraud).  Due to the significant implications of such order which will impact the respondent’s day-to-day life as well as personal and professional reputation, the courts must be satisfied that it is just and convenient to grant the injunction.   

An application for a freezing injunction can be made prior to issuing proceedings or at any stage after commencement of proceedings. There is no requirement to inform the other party when making this application. The applicant will have to make a full and frank disclosure of all relevant information given that the respondent will not have the opportunity to make representation on its own at a ‘without notice’ hearing. A freezing injunction is usually sought by an applicant, but respondents may also apply if they have a counterclaim. If a third party hold relevant assets belonging to the respondent, the court has the power to order a freezing injunction against them. It must be noted that the respondent must have sufficient assets to warrant a freezing injunction. 

Reference:

  1. SC BTA Bank v Solodchenko [2011] EWCA Civ 1241 at para [52] ↩︎

*This article is not legal advice but provides a general overview. The specific details of your case will determine the best course of action.