The UK Court of Appeal unanimously held in Lakatamia Shipping Co Ltd v Su [2025] EWCA Civ 1389 that a person located outside England can be held liable for unlawful means conspiracy if they knowingly assist in the breach of a freezing order, even when acting entirely abroad.
The case arose from efforts to enforce two English judgments worth over USD 60 million against the debtor, Mr. Su, who had repeatedly violated a freezing order by concealing assets in Monaco and dissipating the proceeds from their sale.
The appeal concerned two individuals involved in those transactions. One of them, Mr. Zabaldano, a Monaco-based lawyer, had transferred about EUR 27 million of sale proceeds to another entity at the request of a company director, despite being aware of the freezing order.
At first instance, the High Court found that he could not be held liable because of the Babanaft proviso, a standard clause in freezing orders stating that the order “does not affect or concern anyone outside the jurisdiction,” except for the defendant and certain listed exceptions. The court also rejected a separate claim under the Marex tort, concluding that the lawyer genuinely believed he was acting lawfully.
On appeal, the Court of Appeal ruled that the Babanaft proviso does not shield a foreigner from liability for unlawful means conspiracy when they knowingly assist a breach. Referring to previous decisions, including JSC BTA Bank v Ablyazov, the court emphasized that the proviso merely limits the direct effect of the order but does not prevent civil liability for those who knowingly help to violate it.
The Court of Appeal overturned the lower court’s ruling and found that:
- The Monaco lawyer had acted in concert with the debtor and the director to breach the freezing order, satisfying the elements of an unlawful means conspiracy.
- The director who ordered the transfer was also liable, as his claimed ignorance of the order was not credible.
- Consequently, Mr. Su himself remained jointly liable as part of the same conspiracy.
The decision has a significant practical impact: any person outside the UK who knows of an English freezing order and assists in its breach can face proceedings and potential damages in England, even if all their acts took place abroad.
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