Freezing orders, delay and proprietary injunctions: key lessons from Alliance Petrochemical v Mazzagatti Background The WWFO application The applicable principles The impact of delay API's three new grounds: all rejected The proprietary injunction A BVI perspective Freezing orders in the BVI Practical takeaways for offshore litigators

The English Commercial Court has confirmed that delay in seeking a freezing order and proprietary injunction can be fatal to the application.

In Alliance Petrochemical Investment (Singapore) Pte Ltd v Mazzagatti , the Court refused API's application for a worldwide freezing order (WWFO) and a proprietary injunction after Alliance Petrochemical Investment (Singapore) Pte Ltd (API) waited approximately 17 months to apply and did not produce new evidence of dissipation. The judgment arose from allegations that at least €143 million had been misappropriated from API, a Singapore-incorporated petrochemical company, and its subsidiary, Alliance Petrochemicals Trading LLC (APT).

API alleged that its former CEO, Mr Mazzagatti, and his associate, Mr Dixit, misappropriated at least €143,808,798.66 from API and APT. It said the money was diverted through customer payments, profits routed through Napag IT Limited, and direct withdrawals from API and APT's bank accounts.

API alleged that a substantial portion of the misappropriated funds financed the acquisition of RockRose Energy plc by Viaro Energy Limited, a company indirectly 96.4 per cent owned by Mr Mazzagatti. API also alleged that Viaro Energy relied on forged loan facility documents, purportedly from two Abu Dhabi individuals for £250 million each (the Abu Dhabi Loan Facilities), to present the acquisition as having legitimate financing.

The court refused API's application for a WWFO, which sought to restrain assets up to €160 million. API had established serious issues to be tried. The decisive question was whether there was a real risk of unjustified dissipation of assets.

The test for a freezing injunction is well established. The applicant must show:

1.

a good arguable case/serious issue to be tried;

2.

a real risk, judged objectively, that a future judgment would not be met because of an unjustified dissipation of assets; and

3.

that it would be just and convenient to grant the order.