Beyond reach: High Court draws the line on non-party freezing orders
The English Court has power to grant wide-ranging and invasive freezing injunctions. But there are limits. Even where there exists a real risk of dissipation, a recent court decision shows that it is likely to be difficult to obtain a post-judgment freezing order over assets held by a third party based abroad.
Background
So you bring a claim against an English company for payment of significant business loans.
You win and look to enforce that judgment.
You discover that the company has received large sums of money which could not be accounted for in its financial statements and which had not been retained in its bank accounts.
Moreover, it appears that payments had been made by the company to associated parties based abroad. There appears to be no proper purpose for those payments, and the recipients do not seek to justify or explain them or suggest that they provided any value in return for the same.
Further still, you can show that there is a real risk that enforcement of your judgment will be frustrated by dissipation of the assets in question.
Surely in those circumstances the English court would be willing to grant a freezing injunction against the assets of those foreign associates?
Well, in the recent case of Gilbert v Broadoak [2026] EWHC 153 that’s exactly what happened.
On a without notice application made by the successful claimant following judgment, the Court granted a freezing injunction over the assets of two non-parties that were related to the defendant and were based in Spain.
But when the matter came back before the court at the return date hearing, those foreign parties argued that the English court did not in fact have personal jurisdiction over them.
The court agreed and the injunction against the Spanish respondents was discharged.
Decision
Harsh? At first blush maybe, but a closer examination of the decision reveals a sound basis for this outcome.
It is well established that the English Court can grant a freezing injunction over the assets of defendants to English proceedings.
Based on the decision in TSB Private Bank International SA v Chabra [1992] 2 All ER, the English court can also grant a freezing injunction against parties that are not themselves defendants in the litigation. This applies to injunctions sought against such non-parties both before and after judgment is made in the proceedings.
‘Chabra’ injunctions – as they are known – are often granted in circumstances where there is evidence that the foreign party is holding assets for the benefit of the defendant (although it is less well known that such injunctions can be put in place where the third party is merely accountable to the principal defendant for some debt or other receivable, claim or potential claim). As with any freezing injunction though, it will still be necessary in all cases to show that the assets of the third party are still at risk of dissipation.
The application for an injunction must first be served on the non-party in question. And where they are based abroad it will be necessary to obtain the permission of the court to serve the application out of the jurisdiction. In turn, the applicant will need to show (among other things) that one or more of the jurisdictional gateways as set out in CPR PD 6B paragraph 3.1 is satisfied.
In the Gilbert case, the claimant argued that five such gateways were satisfied. The Court disagreed on each occasion. In particular, the claimant relied on:
- Gateway 2 which applies where ‘a claim is made for an injunction ordering the defendant to do or refrain from doing an act within the jurisdiction’. This was rejected by the Court: gateway 2 does not apply to an interim freezing injunction. The term ‘injunction’ in the rule refers only to an injunction sought as final, substantive relief.
- Gateway 3 which applies where ‘a claim is made against the defendant on whom the claim form has been or will be served and – (a) there is between the claimant and the defendant a real issue which it is reasonable for the court to try; and (b) the claimant wishes to serve the claim form on another person who is a necessary or proper party to that claim’. This might have worked had the Chabra injunction been sought at the start of the proceedings. But here the claim against the defendant had already been tried and determined. The possibility that a common issue might arise at some point in future was held to be insufficient to invoke gateway 3.
- Gateway 10 which applies where ‘a claim is made to enforce any judgment’. This was rejected on the basis that a freezing injunction is not enforcement of a judgment but merely a remedy to prevent the right of enforcement from being rendered ineffective by the dissipation of assets against which the judgment could otherwise be enforced.
- Gateway 20 which applies where a claim was made ‘under an enactment which allows proceedings to be brought’ and those proceedings were not covered by any of the other gateways. The claimants argued that the application should pass through gateway 20 because it was a claim made under the Senior Courts Act 1981 s.37 which empowers the court to make interim or final injunctions. Again, this was rejected: the phrase “an enactment which allows proceedings to be brought” meant an enactment which established the procedural right to bring proceedings. The fact that a claim or application might be connected with or dependent in some way on an enactment – e.g. s37 – was not sufficient to engage gateway 20.
On this basis it was held that the Court did not have jurisdiction over the Spanish non-parties. As such, the freezing order against them was discharged.
The decision is understood to be under appeal.
Key takeaways
So a possibly surprising outcome, but the Court was clearly constrained by the limitations of the jurisdictional gateways in question. Indeed, it is notable that the Judge in the Gilbert case concluded as follows: “It may seem harsh that the Claimants have a good claim in principle to freezing relief against the Respondents…..but no apparent route to establish jurisdiction. However, as Foxton said in Commercial Bank of Dubai…., ‘if there is to be a general power to serve proceedings out of the jurisdiction to assist the enforcement of an English judgment debt, that is a matter for the Rules Committee’”.
Parties faced with cases involving assets by foreign non-parties may well wish to look for alternative ways in which to prevent dissipation. This may include seeking a Chabra injunction at the start of the litigation (in order to engage gateway 3) or even seeing if the facts support the Chabra respondent being added as a party to the claim (for example, on the basis of knowing receipt) and being made subject to a freezing injunction in the usual way.
Ultimately, timely and strategic action at the very outset can often prove decisive in preserving assets and safeguarding the integrity of a claim.
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