In a unanimous decision, the Supreme Court has confirmed that the right to draw down under loan agreements is caught by the expanded definition of “asset” contained in the current standard Commercial Court form of freezing order which includes “any asset which it (the respondent) has the power, directly or indirectly, to dispose of or deal with as if it were its own“: JSC BTA Bank v Ablyazov  UKSC 64.
The decision helpfully clarifies that:
- freezing orders will be construed strictly in accordance with what the words in fact mean;
- in the absence of the expanded wording now contained in the standard form of order, the right to draw down loans will not be frozen; and
- the expanded wording does widen the scope of the order meaningfully and can include assets not “owned” by the respondent.
From a practical perspective, great care needs to be taken when drafting freezing orders to ensure that assets which the respondent is suspected of having are clearly within the scope of the order. It will be dangerous to assume that the word “assets” will necessarily have its everyday meaning in the context of a freezing order.
For more information, please see our Litigation Notes blog.