BOCIMAR INTERNATIONAL N.V v EMIRATES TRADING AGENCY [2016] DIFC CFI 008 — Amended Freezing Order (08 February 2016)

This order details the enforcement of a significant asset preservation measure against Emirates Trading Agency LLC, securing a claim value exceeding US$ 118 million.

What is the specific nature of the dispute between Bocimar International N.V and Emirates Trading Agency LLC that necessitated this freezing order?

The dispute concerns a high-stakes commercial claim brought by Bocimar International N.V against Emirates Trading Agency LLC (ETA). The litigation, registered under case number CFI/008/2015, involves a substantial financial claim amounting to US$ 118,801,381.90. The claimant sought the intervention of the DIFC Court to prevent the dissipation of assets that could otherwise be used to satisfy a potential judgment.

The court’s intervention was required to ensure that the respondent did not remove or diminish assets that might be necessary to satisfy the substantial debt. As noted in the court documentation:

This is a Freezing Order made against Emirates Trading Agency LLC (‘the Respondent’) on 28 January 2016 by Justice Sir John Chadwick on the application of Bocimar International N.V.

This order serves as a critical procedural step in the broader litigation between the parties, following earlier procedural developments in the same case family, such as BOCIMAR INTERNATIONAL N.V. v EMIRATES TRADING AGENCY [2015] DIFC CFI 008 — Procedural limits on expert evidence in jurisdiction challenges (26 August 2015) and the subsequent BOCIMAR INTERNATIONAL N.V. v EMIRATES TRADING AGENCY LLC [2016] DIFC CFI 008 — Consent order for enforcement of English High Court judgments (26 January 2016).

Which judge presided over the issuance of the amended freezing order in CFI 008/2015?

The amended freezing order was issued by Justice Sir John Chadwick, sitting in the DIFC Court of First Instance. The order was finalized on 8 February 2016, following an initial freezing order granted on 28 January 2016.

What arguments were advanced by the parties regarding the scope of the freezing order?

The application was brought by Bocimar International N.V on a without-notice basis, requiring the court to balance the claimant’s need for security against the respondent’s right to be heard. The respondent, represented by Clyde & Co, was granted the right to apply to the court to vary or discharge the order. The court set a specific timeline for the respondent to signal its intent to challenge the order, as stated:

The Respondent shall advise the Court and the Claimant by no later than close of business on 9 February 2016, if it intends to seek to discharge or vary the Freezing Order herein and the grounds therefore.

The claimant’s position focused on the necessity of restraining specific real estate assets and bank accounts held by ETA to prevent the diminution of the respondent's net worth below the US$ 118.8 million threshold.

What was the precise legal question the court had to answer regarding the reach of the freezing order over third-party held assets?

The court had to determine the extent to which a freezing order could capture assets not held directly in the name of the respondent, specifically those held by affiliated companies or controlled by third parties. The legal question centered on whether the respondent possessed the requisite "power" to dispose of or deal with such assets, thereby bringing them within the ambit of the court’s injunctive relief.

How did Justice Sir John Chadwick define the respondent's control over assets for the purpose of the freezing order?

Justice Sir John Chadwick applied a broad definition of "assets" to ensure the effectiveness of the injunction. The court established that the order applies to assets regardless of whether they are held solely or jointly, or if they are held in the name of a third party, provided the respondent maintains the power to control them. The court’s reasoning is explicitly defined in the order:

Paragraph 4 applies to all of the Respondent’s assets whether or not they are in its own name and whether they are solely or jointly owned.

Furthermore, the court clarified the test for control:

For the purpose of this order the Respondent’s assets include any asset which it has the power, directly or indirectly, to dispose of or deal with as if it were its own.

The Respondent is to be regarded as having such power if a third party holds or controls the asset in accordance with its direct or indirect instructions.

Which specific DIFC authorities and procedural rules were applied in the issuance of this order?

The order is governed by the Rules of the DIFC Courts (RDC), which provide the framework for interim injunctions and freezing orders. The court exercised its inherent jurisdiction to grant the freezing order to protect the subject matter of the claim. The order specifically references the requirement for the respondent to provide an affidavit detailing assets, a process underpinned by the court’s power to punish non-compliance as contempt.

How did the court address the risk of non-compliance and the potential for contempt in the context of asset disclosure?

The court emphasized the gravity of the disclosure obligations. By requiring the respondent to swear an affidavit regarding its worldwide assets exceeding US$ 100,000, the court established a clear standard for transparency. The order includes a penal notice warning that failure to provide accurate information constitutes a serious breach of court authority:

Wrongful refusal to provide the information is contempt of court and may render the Respondent liable to be imprisoned, fined or have his assets seized.

The order also provides a limited exception for the respondent to refuse information if it is likely to incriminate them, though it strongly advises the respondent to seek legal counsel before invoking such a privilege.

What was the final disposition and the specific monetary relief granted to the claimant?

The court granted the amended freezing order, prohibiting Emirates Trading Agency LLC from removing assets from the DIFC or diminishing their value up to the total amount of US$ 118,801,381.90. The order specifically lists real estate assets, including the Al Warsan Site and the Marina Site, and accounts held at HSBC Bank Middle East, Emirates NBD, and Mashreqbank PSC. The order also includes standard exceptions, such as allowing the respondent to spend a reasonable sum on legal advice, provided they disclose the source of funds:

But before spending any money the Respondent must tell the Applicant’s legal representatives where the money is to come from.

Additionally, the order protects the rights of banks to exercise set-off rights:

Set off by banks This injunction does not prevent any bank from exercising any right of set off it may have in respect of any facility which it gave to the Respondent before it was notified of this order.

What are the wider implications of this order for practitioners dealing with asset preservation in the DIFC?

This case highlights the court’s willingness to grant robust, worldwide freezing orders that extend to assets held by third parties or affiliates, provided the respondent maintains effective control. Practitioners must note that the DIFC Court will look through corporate veils to identify assets that the respondent can "deal with as if it were its own." The strict disclosure requirements and the inclusion of a penal notice underscore the court’s uncompromising stance on asset preservation. Litigants must be prepared to provide detailed, sworn affidavits of assets within tight timeframes, or face severe consequences for contempt.

Where can I read the full judgment in Bocimar International N.V v Emirates Trading Agency LLC [2016] DIFC CFI 008?

The full text of the amended freezing order can be accessed via the DIFC Courts website: https://www.difccourts.ae/rules-decisions/judgments-orders/court-first-instance/cfi-0082015-bocimar-international-nv-v-emirates-trading-agency-llc-3 or via the CDN link: https://littdb.sfo2.cdn.digitaloceanspaces.com/litt/AE/DIFC/judgments/court-first-instance/DIFC_CFI-008-2015_20160208.txt

Cases referred to in this judgment:

Legislation referenced:

• Rules of the DIFC Courts (RDC)
• DIFC Court Law (Jurisdiction and Powers)