Since Derby & Co Ltd v Weldon  Ch 48 it has been common practice to include in a freezing order an undertaking by the applicant not to enforce the order without the court’s permission. Typical wording reads:
“The applicant will not without the permission of the court seek to enforce this order in any country outside England and Wales or seek an order of a similar nature including orders conferring a charge or other security on the Respondent or the Respondent’s assets.”
In Akcine Bendrove Bankas Snoras v Antonov  EWHC 887 (Comm) the Commercial Court considered the scope of this standard undertaking and the extent to which it tied the hands of the applicant.
When such undertakings were first introduced they were intended to address two primary concerns. The first was to avoid oppression of a respondent by an applicant commencing multiple proceedings in different jurisdictions in order to enforce a freezing order. The second was to ensure that the freezing order did not generate a more far reaching effect in the foreign jurisdiction than in England (see Weldon at 55-56, 59). At the time the wording was limited to direct enforcement of the order and did not contain the underlined section above.
When the terms of the undertaking were considered by Hamblen J (including the underlined section) in In the matter of an LMAA Arbitration E, F, G v M (FvM)  EWHC 895 (Comm) he observed “The main concern underlying the undertaking is an inappropriate or oppressive extension of the [worldwide freezing order] through its enforcement abroad or its duplication. It is not directed at precluding the pursuit of different and independent rights to security that may be available abroad.” [para 53].
With Weldon and LMAA in mind the Commercial Court considered an application for a declaration that certain activities in Lithuania and Switzerland did not breach the undertaking given as part of a live freezing order granted in England.
The relevant facts can be stated briefly. Snoras obtained a freezing order against Antonov in May 2012. Antonov applied to discharge the order on 4 February 2013 and Gloster J refused. Proceedings were stayed by consent in December 2013. On 3 April 2017 Snoras issued proceedings in Lithuania with some overlap to the English proceedings. On 6 April 2017 Snoras obtained an order seizing certain assets of Mr Antonov (referred to as the “Lithuanian Arrest”). Between May and July 2017 Snora obtained various orders from Zurich seizing funds held in certain named bank accounts (referred to as the “Swiss Arrest”).
The question for the court was: did the Lithuanian and/or Swiss Arrest amount to ‘an order of a similar nature’ so as to lead to a breach of their undertaking?
Mr Peter MacDonald Eggers QC found that it did not.
In doing so he made the following points:
On the facts neither the Lithuanian Arrest nor the Swiss Arrest fell within the narrower interpretation. Pertinent features included: the fact that they were made in support of a Lithuanian Civil Claim not the English Civil Claim; that they did not endow any secured or privileged rights on Snoras; and, they did not provide direct or effective enforcement of the English freezing order.
In the alternative the Judge found that retrospective permission would have been appropriate given: the lack of evidence of oppressive effect; the inadvertent nature of the breach; and, the absence of evidence to suggest any change to the position assessed by Gloster J where the order was maintained.
This decision provides welcome clarity on the interpretation of a common undertaking and it does not leave the holder of a freezing order hamstrung from pursuing alternative claims with associated interim relief in foreign jurisdictions.
Article written by Lydia Banerjee.