The High Court has reaffirmed its jurisdiction under section 37(1) of the Supreme Court Act 1981 to compel defendants who are subject to the court’s jurisdiction to disclose their assets worldwide in order to aid execution of a judgment or (as in this case) arbitration award, despite the absence of a freezing injunction: Cruz City 1 Mauritius Holdings v Unitech Limited and others  EWHC 1323 (Comm).
Section 37(1) provides that the High Court may “grant an injunction or appoint a receiver in all cases in which it appears to the court to be just and convenient to do so”. Previous cases held that this gave the court jurisdiction to order disclosure of assets worldwide in aid of execution, even if there was no freezing injunction in aid of execution. The defendants in the present case argued that, to the extent that such cases decided that a foreign defendant could be ordered to disclose assets outside the jurisdiction in aid of execution, they were no longer good law following Masri v Consolidated Contractors International (No 4)  UKHL 43. In Masri the House of Lords held that CPR 71.2, which allows a judgment creditor to apply for an order requiring an officer of a corporate judgment debtor to attend court to provide information needed to enforce the judgment, did not have extraterritorial effect; i.e. the court had no jurisdiction to compel a company officer who was outside the court’s jurisdiction to attend court to provide such information.
In the present case, the High Court held that Masri did not prevent the court from granting an order under section 37(1) requiring the defendants to provide disclosure “verified by an affidavit of a proper officer”. The critical distinction was that the defendants in this case were subject to the jurisdiction of the English court, even if all of their “proper officers” were likely to be outside the jurisdiction. Unlike in Masri the court was not asked to make an order against a non-party outside the court’s jurisdiction. Click here to read more about the decision on our arbitration blog.