Once you have identified the assets https://fortiorlaw.com and before starting proceedings, you may want to take steps to preserve them. There are several ways to do so. Which one would be the most appropriate depends on the context in which you operate.

If you have a contract to purchase specifically identified goods and have title to those goods, but someone is trying to misappropriate them, you may want to freeze/attach those specific goods. You may either do this in the jurisdiction where the goods are located via local Courts, or you may do this in English Courts provided that they have jurisdiction to determine the underlying dispute, or the underlying dispute is subject to the jurisdiction of an arbitral tribunal seated in England.

To do this, you do not usually need to demonstrate a risk of dissipation on the part of your opponent. All you have to do is show that your goods are likely to be interfered with. For example, you may have evidence that someone is trying to sell your goods the second time round, or that someone is redirecting railway wagons with your goods in a different direction. These freezing/attachment orders are usually quick and relatively easy to obtain. In England they can be obtained within hours after an appropriate application is filed with the Court, even during weekends and during the night.

If your goods are being transported by ship and you have a maritime claim (such as a claim for damage to goods during a sea voyage or unlawful discharge of the goods) you may want to arrest the ship in support of your claim against the shipowner. If you have good grounds for the arrest, then normally to release the ship the P&I club will provide you with a guarantee that you will be paid the sums due to you once your claim succeeds in Court or in arbitration.

If you have details of the bank account of your counterparty, you may freeze it in the jurisdiction where it is located. The procedure and requirements for doing so vary depending on jurisdiction. In some jurisdictions, the Courts simply need to verify that you have a good arguable case and will then freeze the account without exceptions. In others, you will have to demonstrate a serious risk of dissipation before the Court freezes the account, and the freezing order will be subject to multiple exceptions allowing the respondent to conduct ordinary business, pay legal fees and (for individuals) cover reasonable living expenses. In some jurisdictions, it may not be possible to freeze an account at all. For example, in Switzerland, there is a law effectively prohibiting local Courts from freezing accounts of Swiss-registered companies in support of either Swiss or foreign proceedings against them.

What if you cannot find any assets?

Worldwide freezing and disclosure orders

If you cannot find any specific assets, but you have evidence that your counterparty has been hiding its assets in the past or it is otherwise behaving dishonestly, you may be able to apply for a worldwide freezing injunction and an accompanying disclosure order to the English Courts.

The consequences of such an order are as follows:

• the respondent cannot dispose of its assets or diminish their value below a specified limit (usually the value of your claim plus interest and legal costs to completion of the claim);

• the respondent must disclose all its assets beyond a specified limit (usually above GBP10,000-GBP20,000) which the respondent controls indirectly and over which he has control even though they are not registered in his name – money on bank accounts, cars, real property, shares, rights to call for disbursement under loan agreements, money on lawyers’ client accounts are all disclosable assets;

• there are exceptions to the order: usually the respondent may pay reasonable legal fees to defend the claim from its assets, however before doing so it is obliged to inform the claimant’s solicitors and tell them where the assets are coming from;

• another exception is that the respondent may use its assets in the ordinary and proper course of business, such as to pay salaries of its existing employees, pay office rent, utility bills and so forth – this exception may be narrowed down where you have a respondent who dissipates assets by specific mechanisms which he tries to portray as ordinary and proper course of its business;

• if the respondent breaches the freezing order or the order to disclose its assets, he (where the respondent is an individual) or its directors/shadow directors (where the respondent is a company) may be pursued for contempt of Court – sanctions for contempt in these circumstances may range from a short suspended prison sentence to a custodial sentence of up to two years.