Freezing orders: a quick guide

An introduction to freezing orders, what they are, the procedure and key points for applicants and respondents. This note provides links to Practical Law's more detailed materials on freezing orders.

Contents

What is a freezing order?

A freezing order (formerly called a mareva injunction) is an interim injunction that restrains a party from disposing of or dealing with his assets.

The usual purpose of a freezing order is to preserve the defendant's assets until judgment can be enforced.

A freezing order can be made in respect of assets:

  • Within England and Wales (domestic freezing order).
  • Situated outside the jurisdiction or worldwide (worldwide freezing order or WFO).

The court's jurisdiction to grant a freezing order is derived from section 37 of the Supreme Courts Act 1981 (SCA 1981). The relevant procedural rules are in CPR 25 and PD 25A. The individual court guides also contain specific provisions regarding freezing orders, see:

It is possible to seek a freezing order against a third party (against whom the applicant has no claim) where it appears that the assets, which are ostensibly those of the third party, are in fact, owned by the defendant. This is referred to as the Chabra jurisdiction, following the decision in TSB Private Bank International SA v Chabra [1992] 1 WLR 231.

 

Requirements for a freezing order

A freezing order is an equitable remedy. The court will exercise its discretion to grant a freezing order only where it considers it just and convenient to do so (section 37(1), SCA 1981).

In addition, case law has established the following conditions for a freezing order:

  • The applicant must have a cause of action, that is, an underlying legal or equitable right.
  • The applicant must have a good arguable case.
  • The existence of assets within the jurisdiction.
  • Real risk of the respondent's assets being dissipated.

For more detail, see Practice note, Freezing injunctions: an overview: What must be proved? (www.practicallaw.com/8-203-9841)

 

Key points for applicants

 

Key points for respondents

  • The respondent should take all possible steps to ensure compliance with the terms of a freezing order.
  • Any breach of the order may lead to committal proceedings for contempt of court.
  • The respondent is likely to be required, within a specified period of time, to disclose details of his assets.
  • The respondent should promptly consider whether there are any grounds for making an application to vary or discharge the order.

For more information, see Practice note, Freezing injunctions: an overview: Steps to be taken by the respondent (www.practicallaw.com/8-203-9841).

 

Freezing order procedure

Freezing orders are usually sought without notice to the respondent, as giving notice would defeat the purpose of the injunction. Applications are made under the procedure in CPR 23, generally, to a judge in the High Court or a circuit judge in the County Court. For the court's jurisdiction, see Practice note, Freezing injunctions: an overview: Where do I apply? (www.practicallaw.com/8-203-9841)

  • The application notice should be completed using Form N244 (www.practicallaw.com/8-205-6543) or, in the Commercial Court, N244 (CC) (www.practicallaw.com/0-506-7561).
  • Evidence in support of the application should be made in an affidavit (PD 25A.3.1).
  • The draft order should generally be based on the standard form annexed to PD 25A, or Appendix 5 of the Commercial Court Guide.
  • If a freezing order is granted at the without notice hearing, it will usually be made for a specified period of time, and a return date will be fixed for a full hearing.
  • The applicant should promptly serve the order (and other necessary documents) on the respondent and any third parties known or believed to hold assets of respondent.
  • At the full hearing, the court will determine whether the injunction should be continued, varied or discharged.

For detailed guidance on the procedure, see Practice note, Freezing injunctions: an overview: How do I apply? (www.practicallaw.com/8-203-9841)

 
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