Freezing Injunctions

What a freezing injunction actually is

A freezing injunction is an interim order of the High Court that stops someone dealing with their assets while a claim against them is fought out. It does not hand you any money. It does not give you ownership of anything. It simply holds the position, so that if you win, there is still something left to enforce against.

Lawyers of a certain vintage still call it a Mareva injunction, after the 1975 shipping case that popularised it. The modern power sits in section 37(1) of the Senior Courts Act 1981, and the Civil Procedure Rules describe it at rule 25.1(1)(f) as an order “restraining a party from removing from the jurisdiction assets located there or restraining a party from dealing with any assets whether located within the jurisdiction or not”.

Donaldson LJ once described the freezing injunction and the search order as the law’s two “nuclear weapons”. That is not judicial theatre. An order of this kind can paralyse a business overnight: bank accounts stop, counterparties get nervous, and reputations take damage that a later victory does not always repair. Courts know this, which is why they grant the orders readily where the evidence is there — and discharge them ruthlessly where it is not.

Mareva Compania Naviera SA v International Bulkcarriers SA [1975] 2 Lloyd’s Rep 509; Bank Mellat v Nikpour [1985] FSR 87.

The test the court applies

Four things have to be established, and the third is where most applications live or die.

1. A good arguable case Not proof, and not a balance-of-probabilities finding. The classic formulation is a case “more than barely capable of serious argument” — it need not be one the judge thinks is more likely than not to succeed. You must have an accrued cause of action; a freezing order cannot be used to shore up a claim that has not yet arisen.
2. Assets that can be frozen There must be assets to bite on — bank accounts, property, shares, vehicles, cryptocurrency, receivables, beneficial interests. Evidence of what exists and where matters; so does evidence that the assets are within the respondent’s control even if not in their name.
3. A real risk of dissipation This is the heart of it. You must show, on objective evidence, a real risk that a judgment in your favour would go unsatisfied because the respondent has moved, hidden or dealt with assets in a way that is unjustified. Ordinary commercial trading is not dissipation. Suspicion, hostility and mere insolvency risk are not enough. What persuades courts: a proven history of dishonesty connected to the way assets are handled, opaque offshore structures with no commercial rationale, sudden transfers to relatives, dissolved companies, evasive answers, unexplained movements of funds after a letter of claim.
4. Just and convenient Finally the court weighs the overall justice: the strength of the case, the hardship to the respondent, the effect on third parties, whether a narrower order would do, and whether you came promptly.

Ninemia Maritime Corp v Trave Schiffahrtsgesellschaft mbH (The Niedersachsen) [1983] 1 WLR 1412; Lakatamia Shipping Co Ltd v Morimoto [2019] EWCA Civ 2203; Les Ambassadeurs Club Ltd v Yu [2021] EWCA Civ 1310.

Without notice — and the duty that comes with it

Almost every freezing injunction is obtained without notice. The logic is obvious: warn someone you are about to freeze their accounts and the accounts will be empty by the time you reach court.

The price of being heard behind the other side’s back is a duty of full and frank disclosure and fair presentation. You must tell the judge everything material — including everything that helps the respondent. You must make the argument the absent party would have made. You must flag weaknesses in your own evidence, defences you know about, delay you cannot explain, and any relevant procedural history.

This duty is enforced strictly. Orders obtained on a partial account are routinely discharged on the return date, frequently with indemnity costs, and sometimes with the applicant refused a fresh order even where the underlying merits were sound.

What follows is a compressed timetable. The order is granted, served on the respondent and immediately on their banks and other third parties. An asset disclosure affidavit is usually due within a few days. A return date is fixed — typically about a week later — at which the respondent finally gets to be heard and the court decides whether the order continues to trial.

Worldwide freezing orders

The English court will, in a proper case, freeze assets anywhere in the world. A worldwide freezing order operates in personam — it binds the respondent, wherever they or their assets happen to be — and English judges have not been shy about granting them where domestic assets are plainly insufficient.

Two safeguards come as standard. The Babanaft proviso limits the order’s effect on third parties outside the jurisdiction until it is recognised locally. And permission is normally required before the order is enforced abroad, governed by the Dadourian guidelines, which ask whether foreign enforcement is just, proportionate and not oppressive.

England will also grant free-standing freezing relief in support of proceedings running in another country, under section 25 of the Civil Jurisdiction and Judgments Act 1982 — one of the reasons London remains a favoured venue for asset recovery even when the substantive fight is elsewhere.

Derby & Co Ltd v Weldon (Nos 3 & 4) [1990] Ch 65; Babanaft International Co SA v Bassatne [1990] Ch 13; Dadourian Group International Inc v Simms [2006] EWCA Civ 399.

The orders that travel with it

A freezing injunction on its own is often of limited use. You need to know what there is and where it went. The armoury usually deployed alongside it:

• Asset disclosure order. The respondent must swear an affidavit listing their assets worldwide, above a stated value, whether held in their own name or not — typically within days. This is frequently the most valuable part of the whole exercise.
• Norwich Pharmacal orders. Compelling an innocent third party mixed up in wrongdoing to identify the wrongdoer.
• Bankers Trust orders. Requiring banks to disclose account records so misappropriated funds can be traced through the system.
• Search orders. Permitting a supervised search of premises to preserve evidence that would otherwise be destroyed.
• Chabra relief. Extending the freeze to assets held by a third party — a nominee, a spouse, a shell company — where those assets are in substance the respondent’s.
• Passport delivery-up and travel restrictions. Exceptional, but available where necessary to make the disclosure obligations effective.
• Post-judgment freezing orders. Available in aid of enforcement once you have a judgment and the debtor starts moving money.

Norwich Pharmacal Co v Customs and Excise Commissioners [1974] AC 133; Bankers Trust Co v Shapira [1980] 1 WLR 1274; TSB Private Bank International SA v Chabra [1992] 1 WLR 231.

What a freezing injunction does not do

Three misunderstandings cause more grief than any others.

The price of asking: cross-undertakings

Nobody gets a freezing injunction for free. In exchange, the applicant gives the court a cross-undertaking in damages: a promise to compensate the respondent, and usually affected third parties, for loss caused if the order turns out to have been wrongly granted.

That exposure is real and can be very large — a frozen trading business can lose contracts, financing and value quickly. Where the applicant is impecunious, offshore, or funded by someone else, the court will often require fortification: security by way of payment into court, a bank guarantee, or an after-the-event insurance policy. Expect to have to prove you can actually stand behind the promise.

Breach is contempt of court

A freezing injunction is a court order, and disobeying it is contempt. The sanctions are not nominal: imprisonment for up to two years, unlimited fines, and sequestration of assets. Where the respondent is a company, its directors can be committed personally.

Third parties are exposed too. A bank that, knowing of the order, allows a frozen account to be emptied may itself be in contempt — which is precisely why the first thing done after an order is granted is to serve it on every financial institution that might hold something.

If a freezing injunction has just been served on you

The instinct to move money is the single most damaging thing you can act on. Do not do it. Then, quickly:

• Read the exceptions. The order will set out what you may still spend on living costs, legal fees and ordinary business. Work within them and keep records.
• Diarise the disclosure deadline. Asset affidavits fall due fast, and an incomplete one compounds your problems considerably.
• Get the applicant’s evidence. You are entitled to the affidavits and the note of the without-notice hearing. That material is where the case for discharge is usually found.
• Test the disclosure duty. If the applicant withheld something material from the judge, discharge is a genuine prospect — often with costs.
• Attack the risk of dissipation. Applicants regularly conflate a weak defendant with a dissipating one. Courts do not.
• Negotiate or substitute. Increased allowances, narrower scope, or alternative security in place of the freeze are all routinely agreed before the return date.

All of this happens in days, not weeks. Which brings us to the practical question.

Choosing a London firm

Freezing injunction work is not general commercial litigation done faster. It is a distinct discipline: assembling admissible evidence of dissipation risk under extreme time pressure, drafting an order a judge will actually make, discharging a duty of candour that can end the case if mishandled, and then holding the order at the return date against experienced opposition.

Practical things worth checking before you instruct anyone: whether the firm has actually appeared in the Commercial Court and the wider High Court; whether they can convene counsel and an affidavit at short notice; whether they will work with foreign lawyers where assets sit abroad; and whether they will tell you honestly and early what this is going to cost.

On that last point — the one most firms are vaguest about — the recommendation on this page is straightforward.

Details above are taken from the firm’s own published information. Fee ranges and current availability should be confirmed directly with the firm.

Common questions