United Arab Emirates
Freezing orders are a category of interim relief that both the DIFC and ADGM courts have the power to grant. It is also worth noting that, in the case of the DIFC courts, there are cases in which freezing orders granted in other jurisdictions have been enforced. These applications are made to the relevant Court of First Instance.
Orders can be made for the freezing of any assets (moveable and immoveable). However, the enforceability of those orders will depend on whether the jurisdiction in which they will be enforced recognizes such orders (or have the power to grant such relief). For example, the DIFC court could make an order to freeze (or otherwise attach) the shares of a limited liability company in onshore Dubai. Whether that attachment will be effective will be subject to: (i) whether the Dubai courts will recognize the DIFC court's order; and (ii) whether such a form of relief is one that is available under the laws of Dubai and the UAE (and therefore one that the Dubai courts can grant).
The DIFC court generally follows English law principles when considering applications for freezing orders. The considerations for such applications include:
- that there is a serious question to be tried;
- that the balance of convenience is in favor of granting such an order;
- that there is a likelihood of injury/damage for which damages would not be an adequate remedy;
- the applicant having an underlying cause of action, in that the applicant must have a substantive claim that may give rise to a judgment that will be enforced against the respondent's (potentially frozen) assets;
- the applicant having a good arguable case;
- the existence of the respondent's assets and such assets being sufficient to meet the applicant's substantive claim; and
- a real risk of dissipation of the respondent's assets.
Furthermore, in ex parte applications (i.e. where the respondent is not present at the first hearing), the applicant is under a duty of full and frank disclosure which in turn requires it to disclose all relevant material to the court, including material which may be adverse to its case.
Additionally, an applicant obtaining a freezing order from the DIFC courts is generally required to provide a cross-undertaking in damages. This would act to satisfy any damages the respondent incurs where it transpires that the application was wrongfully granted.
The ADGM courts are likely to apply a similar approach.
Both the ADGM and DIFC court rules recognize that applications for interim relief (which include freezing orders), may be made before any substantive proceedings are commenced. In that regard, both court rules provide that the court may give directions requiring a claim to be commenced. Therefore, the issuance of any substantive proceedings will be subject to the discretion of the court.