Court Orders Disclosure and Amendment of Worldwide Freezing Order in Princess Deema v Gibbs Case

Citation: [2024] EWHC 237 (Comm)
Judgment on

Introduction

The case of HRH Princess Deema Bint Sultan Bin Abdulaziz Al Saud v Ronald William Gibbs deals with a series of applications made by the claimant in relation to a worldwide freezing order (WFO) previously granted against the defendant. The case elucidates the UK court’s approach in ensuring compliance with WFOs, particularly when faced with a defendant’s alleged non-disclosure of assets and breaches of the order. The judgment, delivered by Mr Justice Calver, addresses the applications for disclosure and amendment of the WFO and reinforces the legal principles concerning asset disclosure and the effective enforcement of a WFO.

Key Facts

The WFO was originally granted to restrain the defendant from disposing of assets up to the value of $30 million. The defendant’s previous asset disclosure under the WFO did not fully account for all assets, particularly liquid assets, and the claimant’s applications sought further disclosure to remedy apparent breaches of the freezing order. Despite various assets being disclosed by the defendant, significant transactions and the true value of assets remained hidden or unverified, including the unauthorized sale of shares and the secrecy surrounding transactions using undeclared bank accounts.

The ruling by Mr Justice Calver offers several insights into the principles applied by the English courts in upholding freezing orders:

Ancillary Orders for Effectiveness of Freezing Injunctions

The court’s power under section 37(1) of the Senior Courts Act 1981 or alternatively under its inherent jurisdiction can extend to making ancillary orders necessary to make a freezing injunction effective. This can include requiring disclosure of assets and banking information as evidenced in Privatbank v Kolomoisky [2018] EWHC 482 (Ch).

Necessity and Proportionality

The test to justify further disclosure remains whether such disclosure is necessary to make the freezing order effective, for a proper purpose, and proportionate, mirroring the sentiments in JSC Mezhdunarodniy v Pugachev (No 2) [2016] 1 WLR 781.

Breach of Freezing Order

The concealment of assets, the unauthorized disposal of assets, and the inconsistency in disclosed asset values are considered breaches of WFOs. Particularly, the defendant’s overvaluation of SAM (Silver Arrows Marine) and withholding the existence of additional bank accounts or sources of funds were key breaches noted by Mr Justice Calver.

Outcomes

Mr Justice Calver found multiple breaches of the WFO by the defendant, such as the failure to reveal the sources of his funding for living and legal expenses and the unauthorized disposal of assets. Consequently, the judgment granted the claimant’s applications. An order was made for the disclosure of all relevant bank accounts and transactions since January 2021. The judgment also permitted the amendment of the WFO, reducing the threshold of the defendant’s assets for the prohibition to $29.4 million, excluding the overvalued shares in SAM, and decreasing the defendant’s weekly allowance for ordinary living expenses from £17,500 to £7,500. This was on the basis that the defendant had significantly altered the valuation of his disclosed assets, which altered the applicability of the WFO’s initial terms.

Conclusion

The judgment in HRH Princess Deema Bint Sultan Bin Abdulaziz Al Saud v Ronald William Gibbs highlights the court’s strict stance on the enforcement of worldwide freezing orders and the necessity for full and frank disclosure of assets by defendants subject to such orders. It is a firm reminder of the court’s willingness to employ its powers to make ancillary orders to ensure compliance with WFOs and the principle that the administration of justice requires parties to act with transparency and honesty. The case reinforces the responsibilities on parties subject to freezing orders to maintain accurate and up-to-date information regarding their assets and to avoid any actions that could potentially breach the terms of the order.

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