Author: Frances Jenkins
Frances Jenkins, Associate, Fladgate LLP (email@example.com)
In Eastern European Engineering Ltd v Vijay Construction (Proprietary) Ltd  EWHC 1539 (Comm), Eastern European Engineering Ltd (EEEL) applied to the Commercial Court in London for a WFO (WFO) against Vijay Construction (Vijay) in support of an ICC arbitral award.
EEEL had entered into six contracts with Vijay relating to the construction of a resort in the Seychelles. The contracts were governed by Seychelles law and provided for ICC arbitration seated in Paris. Before the construction work was finished, EEEL terminated the contract because of alleged delays and defects. EEEL commenced an ICC arbitration, and the sole arbitrator later held that EEEL had validly terminated each of the construction contracts and ordered Vijay to pay EEEL damages plus interest and costs amounting to approximately €18 million. Vijay did not pay.
Prior to this application, there had been a number of other proceedings commenced either to enforce or challenge the award in France, England and the Seychelles, including applications for injunctive relief.
In England, EEEL applied for a WFO to restrain Vijay from removing from England and Wales any assets in the jurisdiction and disposing of, dealing with or diminishing the value of its worldwide assets up to €18 million. Vijay argued that the court lacked jurisdiction to grant a WFO because:
The court considered that it did have jurisdiction to grant a WFO but in exercising that discretion the case for a WFO was not made out, holding that:
The judge did, however, consider that it was appropriate to grant a domestic freezing order over the limited assets in the jurisdiction because he was satisfied that there was solid evidence that there was a real risk that any judgment would go unsatisfied, because the assets were movable and Vijay had expressly stated in evidence that it would rather not pay the award and would allow itself to be wound up.