Asset Tracing and Enforcement Update: September 2016

Written on 27 Sep 2016

Welcome to the latest edition of Osborne Clarke’s Asset Tracing and Enforcement Update.

In this edition, we discuss a recent European court (CJEU) judgment that supports the ability to rely on freezing orders against third parties, in other EU Member States, that were not involved in the original proceedings. This is an important point in practice for those concerned that a defendant will not comply with a freezing order.

Of course, while the EU regime continues to apply to the UK for the time being, this could change depending on the terms of the UK’s relationship with the EU post-Brexit. Below are three articles from the perspective of English disputes lawyers on what Brexit may mean for dispute resolution involving the UK.

We also report on further developments in the Ablyazov litigation that will impact on cross-border enforcement and highlight a piece of legislation that recently came into force in the UK that will make it easier to pursue claims against insurers where the insured entity is insolvent.  We are already using this legislation to assist clients of ours.

If you would like to discuss any of the issues raised in this Update, please contact us. Andrew Bartlett will be at the ABA conference in Moscow on 30 September 2016, along with Peter Clough and Olena Golovtchouk.  Please do get in touch if you will be attending.

Still no dodging the question – further decision of the English Court shows tough stance on overseas parties who seek to avoid court questioning over assets

In yet another Ablyazov-related judgment, the English High Court has refused to adjourn the cross-examination of an individual defendant (and named party to a worldwide freezing order granted by the English court) under CPR Part 71.

The individual had sought to have cross-examination undertaken by video link in Switzerland, rather than in person in the UK, stating that he feared extradition if he travelled to the UK. However, the Court found that those fears were essentially non-existent, and that the form of questioning provided for under Swiss law would not be a suitable cross-examination under CPR 71.

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Freezing orders enforceable across the EU against third parties not involved in original proceedings

The CJEU has held that a third party affected by a freezing order granted in the UK, but which was not a party to those proceedings, cannot resist enforcement of that order in another member state on public policy grounds.

The CJEU’s judgment in this case supports the utility of freezing orders of the type typically granted by the English courts, which can be readily enforced in other EU Member States, including against third parties holding or controlling assets, who were not party to the original proceedings.

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New Act to assist litigation against insolvent defendants

Greater assistance for parties with potential and existing claims against insolvent companies and individuals in the UK has recently become available as the Third Parties (Rights Against Insurers Act) 2010 came into force on 1 August 2016.

Following a long delay in implementation and some further amendments after the Act was initially given royal assent in 2010, a number of additional strategic opportunities for recoveries against an insolvent party in the UK have become available. The Act will be of interest to potential claimants against an insolvent party who has or may have had policies of insurance that cover the liabilities to which the claims relate.

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Brexit: what will it mean for disputes?

As part of our Brexit hub, we discuss what Brexit is likely to mean for litigation in the UK, including the issues that are most likely to lead to disputes and what this will mean for principles of choice of law and jurisdiction.

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We also ask whether parties uncertain as to the effect of Brexit on cross-border litigation will be looking to settle more disputes by arbitration.

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Finally, we focus on the issue of cartel damages claims and ask where claimants should bring claims in the future.

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