Singapore
1. Are freezing orders (or their equivalent referred to below) available in civil legal proceedings in this jurisdiction and what is their effect?
Yes. The respondent is prohibited from dealing with the assets referred to in the freezing order either within the jurisdiction or worldwide until a specified time (for example, a further hearing, judgment or payment) or further order of the Court.
2. Are other interim orders commonly made in conjunction with a freezing (or equivalent) order?
Yes. The Court typically also requires the respondent to provide disclosure in an affidavit of the nature, value and location of their assets.
3. Briefly what is the relevant legal test?
(i) The applicant has a valid cause of action over which the Court has jurisdiction;
(ii) the applicant has to show a good arguable case on the merits of their claim;
(iii) the respondent has assets, which may be within or (in the case of a worldwide freezing order) outside Singapore; and
(iv) there is a real risk of dissipation of the assets (for example, for the purposes of frustrating or impeding the satisfaction of a judgment or award).
4. Briefly what is the process for obtaining a freezing (or equivalent) order?
The applicant makes an application to the Court, in particular setting out in an affidavit the reasons for the application and the basis on which the relevant test is met. An application can be made on or without notice to the respondent. Where it is made without notice, the applicant has a duty of full and frank disclosure and the respondent has a right to ask the Court to vary or discharge this order.
5. Does the applicant have to provide any form of security or commit to compensation if its claim is ultimately unsuccessful and any freezing (or equivalent) order granted causes loss and damage to the respondent?
Yes. The applicant must provide a cross-undertaking in damages to the respondent.
6. Can it be sought against third parties?
Yes, a third party to the underlying proceedings or prospective proceedings may be made a party to a freezing order where there is good reason to suppose that its assets are in fact the assets of the defendant in the underlying litigation or will be available to the defendant to meet a judgment. Equally a third party which is not a party to the freezing order (for example, a financial institution holding the defendant’s assets) which is notified of it is still required to ensure that it does not knowingly assist the respondent in breaching the terms of the freezing order.
7. What assets are covered by a freezing (or equivalent) order?
Any tangible or intangible assets provided they are not perishable, whether within the jurisdiction (a domestic freezing order) or outside (a worldwide freezing order).
8. Can a freezing (or equivalent) order be made in support of substantive proceedings abroad?
Yes.
9. Can a freezing (or equivalent) order be made in support of arbitration proceedings or awards?
Yes. See, for example, section 12A read in conjunction with section 12 of the International Arbitration Act 1994.
10. At what stage of proceedings can a freezing (or equivalent) order be sought?
At any stage, including prior to commencing the claim or following judgment to assist with enforcement. However, if the intended freezing order is an interlocutory one, the claimant should file the application as soon as possible as delay is a factor the Court will consider in deciding whether to grant the freezing order.
11. Are there typically any exceptions to the general prohibition on the respondent’s use of assets subject to a freezing (or equivalent) order?
Yes. The order will generally provide that the respondent may deal with their assets:
(i) in the ordinary and proper course of business;
(ii) for ordinary living expenses; and/or
(iii) for legal advice and representation.
12. What happens after a freezing (or equivalent) order is granted?
The applicant will typically notify third parties (such as banks) of the freezing order when they might hold the respondent’s assets. Assuming the original order was obtained without notice (as it often will have been), the respondent may challenge the order. Depending on the Court’s decision concerning the challenge, the original order will usually either be maintained, set aside, extended or replaced with a Court-sanctioned undertaking which has broadly the same effect as a freezing order until trial.
13. Who pays the costs of the application for a freezing (or equivalent) order?
If the Court grants an interlocutory freezing order, the costs order is usually “costs in the cause”. In other words, the applicant or the respondent may be ordered to pay for the costs of obtaining the freezing order, which is usually decided at the final determination of the underlying litigation, and depending on the outcome of that final determination.
14. What protections are there typically in a freezing (or equivalent) order for third parties to such orders?
(i) A third party is not prevented from exercising any rights of set-off arising prior to its notification of the freezing order.
(ii) A third party does not need to enquire as to the application of any money withdrawn by the respondent if the withdrawal appears to be permitted by the freezing order.
(iii) A freezing order only affects third parties outside of the jurisdiction in certain circumstances.
(iv) As regards assets outside of the jurisdiction, a freezing order does not prevent a third party from complying with (a) what it reasonably believes to be its obligations under the law of the country where the assets are located or the law of any contract between itself and the respondent or (b) any orders of the Courts of the country where the assets are located.
(v) The applicant usually has to undertake to pay the reasonable costs of any third party which have been incurred as a result of the order, and to compensate them for any loss caused by it.
15. What are the consequences of breach of a freezing (or equivalent) order?
A respondent who disobeys a freezing order may be held in contempt of Court and may be imprisoned or fined. A third party may only be in contempt of Court where it knowingly helps or permits the respondent to breach the terms of the order.
16. Does a third party notified of (but not a party to) a freezing (or equivalent) order owe a duty of care to the applicant (meaning it can be liable to the applicant for non-compliance)?
Yes, if it knowingly helps or permits the respondent to breach the terms of the order.
17. Can a freezing (or equivalent) order be enforced abroad?
A Singapore freezing order does not affect or concern anyone outside the jurisdiction of the Singapore Court until it is declared enforceable or is enforced by a Court in the relevant country.
18. Can freezing (or equivalent) orders from overseas jurisdictions be enforced in this jurisdiction?
In general, no.
Contact
Sze-Hui Goh Managing Partner GT Law LLC Singapore sze-huigoh@gtlaw-llc.com www.gtlaw-llc.com
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