Serving Chabra freezing orders out of the jurisdiction

In Commercial Bank of Dubai PSC v Al Sari [2024] EWHC 3304 (Comm), the High Court considered the question of permission to serve a freezing order out of the jurisdiction on a party who was not a defendant to the primary claim. While it can be done in appropriate cases, it was not permitted in this instance.

A series of interim applications were heard together as part of a lengthy and complex case which began with proceedings in Sharjah in 2012. The claimants had obtained judgment in England to enforce a judgment obtained in Sharjah against the first to third defendants (Ds 1-3), and a worldwide freezing order (WWFO) in support of that enforcement judgment.

Among the applications before the English court was a request by the claimants for a further WWFO, this time against the tenth defendant (D10). This WWFO was sought on two bases: (1) in respect of substantive claims against D10, and (2) on the Chabra basis¹, i.e. against D10 as a “non-cause of action defendant” (NCAD) because he may hold assets falling within the scope of the WWFO already granted against Ds 1-3.

The application for a Chabra WWFO raised the question whether the claimants would be permitted to serve such an order out of the jurisdiction, given that D10 was overseas. 

The Chabra WWFO and service out

The applicant for a Chabra WWFO must provide an evidential basis for the allegation that the NCAD is holding assets against which a judgment against the primary defendant can be enforced. 

In this case, the court accepted that there was a good reason to suppose D10’s interest in D7 and D9 was held on behalf of Ds 1-3 and that there were other business links between D10 and Ds 1-3. As such, the court was willing to conclude that if there were a basis to serve on D10 out of the jurisdiction, an appropriate WWFO could be made. Thus the key question was whether such a WWFO could be served out of the jurisdiction on D10. 

When seeking permission to serve outside the jurisdiction, a claimant must satisfy the court that: 

1. there is a serious issue to be tried on the merits of the claim;
2. England is clearly the appropriate forum for the trial of the claim; and
3. there is a “good arguable case” the claim falls within one of the jurisdictional gateways set out in Practice Direction 6B. 

In this case, the claimants argued that the “necessary or proper party” gateway, under PD6B paragraph 3.1(3) (Gateway 3), was applicable. Gateway 3 allows a claimant to serve proceedings on a party outside of the jurisdiction where:

• a claim is or will be served against a defendant (the “anchor defendant”);
• there is between the anchor defendant and claimant a real issue which is reasonable for the court to try; and
• the proposed additional party is a necessary and proper party to that claim. 

To determine whether Gateway 3 was available, Foxton J had to consider its nature and purpose. Foxton J is a member of the Civil Procedure Rules Service Sub-Committee involved in maintaining and developing the gateways, and the author of extra-judicial commentary on both the gateways and the freezing injunction jurisdiction. As such, his judgment on this topic is especially noteworthy. Foxton J determined the following.

• Gateway 3 requires that substantive proceedings have been commenced against the anchor defendant. Those substantive proceedings could be proceedings to enforce a judgment or arbitral award.
• The use of Gateway 3 is not then limited to issues within the substantive proceedings. Gateway 3 can be used where procedural relief is sought against the anchor defendant and the NCAD is a necessary and proper party to that relief. Accordingly, the gateway could in principle be used to serve a WWFO on a NCAD outside the jurisdiction.
• Gateway 3 can only be used if there is a “live” issue between the claimant and anchor defendant which also arises between the claimant and the NCAD. The live issue might be substantive or procedural, but it must be actual and not hypothetical. The live issue must be one which will be the subject of investigation and determination for both defendants at the same hearing, thereby meeting the justification for the gateway – which is avoiding the multiplicity of proceedings and the risk of inconsistent findings.
• To keep Gateway 3 within sensible bounds, there must be some common factual enquiry or determination involving the anchor defendant and the party to be joined. It is not enough to simply rely on the fact that obtaining information from the NCAD would assist the claim against the anchor defendant.  

On the facts, the Chabra WWFO could not be served on D10 out of the jurisdiction under Gateway 3. In the alternative, it would not have been appropriate for the court to exercise its discretion to grant permission to serve out.

• There were no live post-judgment applications against Ds 1-3 to which D10 was a necessary and proper party, and no attempt had been made to justify the application by reference to such an application.
• The mere possibility that such issues might arise in the future was insufficient for the court to grant permission.
• There was no evidence that Ds 1-3 would engage in the post-judgment phase of English proceedings. In the words of counsel for the claimants, Ds 1-3 had “dropped out of these proceedings” and would face a two-year prison sentence for contempt if they returned to the jurisdiction.
• The real purpose of the application was the disclosure of assets, and the court was not persuaded Gateway 3 was applicable merely for the purpose of obtaining information from D10 to assist the claimant enforce its judgment debt. 

Comment

In 2025, the WWFO order celebrates its 50^th anniversary as a tool of English civil justice. Since its inception, the remedy has become immensely popular for litigants who need help securing their rights in international cases. But although the grant of such orders might no longer be described as a “nuclear weapon” of English law, given their prevalence, there are still limits on the jurisdiction to grant them such is their impact on respondents. This case illustrates that the English court is willing to think broadly about WWFO applications and will do its best to assist litigants, but remains mindful that there are limits to its jurisdiction that must be respected.

¹ Named for the case of TSB Private Bank International SA v Chabra [1992] 1 WLR 231.