Let’s say one day you wake up to your company’s accounts almost empty. Maybe the records for the property were modified without your knowledge. Or funds were moved without a word said. You are in the midst of a conflict, and the bedrock of your business suddenly seems unstable. A freezing injunction could be exactly what you need.
It prevents the person from doing anything to specific assets. This would be a form of court order. The aim is to keep things in the same place until the dispute is resolved. No funds should be able to disappear.
Why This Matters Right Now
- Stop sudden transfers
If, after a disagreement, one party attempts to sell off assets, accounts can be frozen. Everything can be frozen until accounts are emptied. - Keep things level
If both sides are claiming control over a share, intellectual property or both, the injunction keeps the assets from being impacted during the disputes. - Make your win count
If the other side withdraws money from their account, all the effort you put into litigation could go to waste. That’s why freezing injunctions can be so effective, so there’s something tangible left to enforce. - Catch hidden moves
Parasitic individuals or organisations may attempt to delete their digital footprint or redirect their assets to family members to evade legal troubles. A freezing order can eliminate these kinds of manoeuvres. - Hold what’s left
Increasing the chances of recovery of the remaining assets requires freezing the assets if some have already been removed or appropriated.
Such an order is not uncommon. It is a form of freezing order that has received wide acceptance. Courts in over 90 jurisdictions, including key global business centres, have recognised the need for such orders to ensure justice during complex disputes. As 2 Temple Gardens puts it, such injunctions are even capable of extending to assets located anywhere in the world as long as the court has some form of jurisdiction over the parties.
What You Need to Show the Court
This is not an informal order. To obtain the order, you have to describe yourself as:
- Having a substantial legal claim. Not merely a fishing expedition.
- There is a substantial chance of the other party attempting to move or hide assets.
- The order is practically justified and warranted for the circumstances. The order is reasonably justified and appropriate given the situation.
Complete disclosure is required. You cannot hide damaging evidence or facts. You cannot fill in gaps or leave gaps for the judge. If the judge finds out about the dishonesty, the order would get cancelled, and you’d have to bear legal costs.
In most cases, such orders are granted without the other party being notified in advance. This is the whole point. Premature disclosure would allow assets to be moved before the order comes in.
Can You Use This Across Borders?
Certainly. In extreme scenarios, courts can issue what is known as a Worldwide Freezing Order. If the assets are located overseas, the court can still take action if there is adequate justification. Courts in England, Singapore, Hong Kong, and even Dubai often issue such orders when there is a reasonable ability and justification to enforce them.
What To Do If You’re Served One
It’s uncomfortable, but it’s not over. If a freezing order is issued against your business:
- Review it thoroughly.
- Inform your finance and legal teams.
- Reach out to your attorney right away.
- Get ready for a hearing, typically within a week.
You can present your case, which allows you to fund payroll, rent, or payments to suppliers. The court has the ability to modify the freezing order for essential expenditures.
Other Things You Should Know
- You must accomplish your primary assertion. The court won’t allow the order to stagnate without some form of progress.
- If you claim the order without merit or use the order unethically to bully the other side, it can be cancelled, and you will be ordered to pay for damages.
- In most cases, you will have to provide a cross-undertaking. This means that you will be liable to compensate for any damage the freezing order unjustly caused.
Final Thoughts
A freezing injunction isn’t going nuclear, it is simply a way to defend yourself. If you feel that your assets are about to be removed, or have already been removed, this is a way to defend your position.
It isn’t overly complex, but it does carry quite a bit of weight. If you are just a step away from it, reach out to a professional. It is impactful to advocate, and could ensure your livelihood is protected from a multitude of difficulties.
