The importance of compliance with undertakings given to the court when pursuing proceedings in multiple jurisdictions

Written on 4 Jul 2017

The judge in the English case of Société Générale v Goldas Kuyumculuk Sanayi emphasised that freezing orders are a draconian remedy and that when a party obtains a freezing order “it is incumbent upon it to progress the proceedings expeditiously, unless the Court sanctions delay.  A failure to do so is an abuse of process.”  In this case the judge was critical even of a day’s delay in issuing the claim after the freezing order had been granted.  To avoid the risk of being criticised, an undertaking to the court to take an action “as soon as practicable” should be taken literally.

Société Générale obtained worldwide freezing orders in March and April 2008 and issued two sets of proceedings against Turkish and Dubai companies that formed part of the Goldas group, a multinational jewellery manufacturer.   However, soon after issuing both claims and obtaining freezing order relief in London, Société Générale decided to focus its attentions instead on bankruptcy proceedings in Turkey.

However, the English judge was critical of the claimant for failing to pursue the English court proceedings in circumstances where it had obtained worldwide freezing orders in support of the pursuit of the English claims.

This is an important reminder to claimants who choose not to pursue actively the proceedings which were relied upon when obtaining a freezing injunction.  Where it is desirable to put one set of proceedings on hold in favour of another, the court should be asked to agree this  and should then be kept informed about the case’s development.  A failure to do this could constitute a breach of the undertakings given to the court – something which is taken very seriously by the court.

The judgment also addresses a number of other issues including orders dispensing with service and permitting service by an alternative method.