SIA Investment Industry v Pardus Wealth Ltd [2024] EWHC 2774 (Comm)
The recent judgment in SIA Investment Industry v Pardus Wealth Ltd, Gregory Robert Bryce, demonstrates the dangers of not complying fully with the disclosure requirements of a Freezing Order.
It also provides an illustration of how a Freezing Order applicant can use a contempt application if the Respondent (the person or entity who is subject to the Freezing Order) attempts to use disclosure delays for tactical purposes.
Background to the case
In January 2021, a German company Traglo, entered into a Purchase and Transfer of Ownership Agreement with the Respondents and another.
Under the Agreement, the Respondents agreed to purchase from Traglo nickel wire stored in Germany for €3,000,000. The invoice had to be paid by 28 February 2021. If payment was not made by this date, monthly interest of €5,000 plus VAT would be payable on any arrears.
The parties had an Arbitration Agreement that provided any disputes would be sent to arbitration. German law and the German language would apply to any arbitration.
The Respondents did not pay the purchase price by the due date but did make nine payments totalling €97,850 towards the contractual interest due on the arrears.
The German company assigned its claims to the Applicant, SIA. On 23 March 2022, SIA commenced an arbitration seeking partial payment of €250,000 (and not its full entitlement of €3,000,000 plus interest). The Respondents were ordered to pay €250,000 by way of a debt and €54,271.51 in costs.
On 2 October 2023, SIA made an application in the Commercial Court to have the Arbitral Award recognised pursuant to section 101 of the Arbitration Act 1996 and for judgment to be entered accordingly. This was granted. On 26 October 2023, SIA commenced a second DIS arbitration, seeking payment of the remaining €2.75 million owing under the contract.
SIA sought a Freezing Order upon discovering five claims brought against Mr Bryce in the London Commercial Court and the Kings Bench Division and two prior Freezing Orders. SIA submitted that there was a real risk of dissipation of assets because the Respondents had made clear in correspondence that they had no intention of satisfying the Arbitration Order by stating that SIA should apply for an interim charging order over a particular property. The Freezing Order was granted with a cross undertaking in damages of €300,000. The terms of the Order permitted Mr Bryce to spend £2,000 per week towards his ordinary living expenses plus legal costs.
Paragraphs 8 and 10 of the Freezing Order provided the following key points:
- The Respondents must, by 22 November 2023, inform the Applicant’s Solicitors in writing of all his/its assets exceeding £10,000 in value, giving the value, location, and details of all such assets and details of any charges, security or other encumbrances over those asset.
- Wrongful refusal to provide the information is contempt of court and may render the Second Respondent liable to be imprisoned, fined or have his assets seized.
- Within seven calendar days after being served with the Order, each of the Respondents must swear and serve on the Applicant’s Solicitors an affidavit setting out the above information.
The Respondent failed to meet the 22 November 2023 deadline. He was sent an email reminder the following day. Mr Bryce sent a list of assets on 24 November 2024 but did not include a sworn affidavit. The list of assets was incomplete and could not be used to police the Freezing Order.
The Court’s decision
The Hon. Mr Justice Bryan ruled that all the elements of the contempt of court application were clearly provide beyond reasonable doubts. He stated:
“The timing of the Bryce Affidavit, accompanied by no explanation as to its late service, has all the hallmarks of a deliberate attempt to file evidence at the very last moment, and for tactical reasons. Otherwise, why was it not served much earlier? It does not appear to contain the product of any very recent investigations linked to any delay in the provision of information that should have been provided nearly a year ago.”
Mr Justice Bryan went on to say that Mr Bryce was well aware that he had not complied with the terms of the Freezing Order. Evidence also showed that he knew what his assets were and failed to disclose them all. Assertions that he had “forgotten” about certain assets, including a property in Tenerife, were simply not credible.
Concluding comments
The terms of a Freezing Order must be taken seriously and complied with fully, including meeting the timelines for disclosures and affidavits. Given that by the time a Freezing Order application has been made, the relationship between the parties has normally completely broken down, an Applicant can at least be confident that redress through the Courts is available.
To discuss any points raised in this article, please call us on +44 (0) 203972 8469 or email us at mail@eldwicklaw.com.
Note: The points in this article the law at the time of writing, 19th December 2024. This article does not constitute legal advice. For further information, please contact our London office.
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