Foreign companies in litigious battles offshore are expected to move rapidly to freeze the Australian-based assets of adversaries after the High Court rubber-stamped the activity, lawyers say.
The decision, relating to a stoush between Indonesian company PT Bayan Resources Tbk and BCBC Singapore over a joint venture agreement in a coal company, froze assets in anticipation of a foreign judgment in Singapore.
"Parties are going to be moving a lot quicker and a lot sooner to freeze assets where it's appropriate, and it'll be a case of first in, best dressed," said Holding Redlich partner Nathan Cecil.
"From the commercial side it's incredibly important because business is conducted more and more across jurisdictional boundaries. If the court's not going to assist the enforcement in those circumstances then it's not keeping pace."Mr Cecil said the High Court's ruling removed any "lingering uncertainty" after a period of "bated breath", and was further evidence of the pro-arbitration stance of Australian courts. The same result is likely to apply in relation to international arbitration proceedings, which are becoming increasingly popular in cross-border arrangements.Companies in the resources, commodities and shipping sectors were likely to take advantage of the ruling, Mr Cecil said, given Australia's status as a "hub" for asset holdings. It gives them access to what Mr Cecil called a "valuable weapon" in an arbitral or litigious battle.The firm has seen a recent increase in parties seeking novel ways to enforce their rights or obtain security if there's a risk assets will be dissipated, and has already filed one freezing order. It has also seen a significant number of international corporate group insolvencies, particularly in the shipping industry.BCBC is pursuing its joint venture partner in the High Court of Singapore. Bayan argued that the Supreme Court of Western Australia had no power to make a freezing order against it, as it related to a prospective judgment of a foreign court and was beyond its jurisdiction.But to the High Court, what mattered was that the foreign court would be making a "money judgment" caught by national laws dealing with the recognition of foreign decisions.The joint majority ruling said that freezing orders in advance of judgments were "characteristically protective" and cited warnings from a UK case that the alternative would leave the law "sadly lagging behind the needs of the international community" given the "ease and speed" of cross-border money and asset movements.Agreeing in a separate judgment, justices Patrick Keane and Geoffrey Nettle highlighted that the "doctrinal basis" of freezing orders was not confined to pending or immediate actions - they could relate to future actions, acting as if they will happen.The federal, Queensland and Victoria attorneys-general intervened in the matter.(c) 2015 Thomson Reuters. No Claim to Orig. US Gov. WorksPublication: Australian Financial ReviewThe information in this Article is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this article is accurate at the date it is received or that it will continue to be accurate in the future. We are not responsible for the information of any source to which a link is provided or reference is made and exclude all liability in connection with use of these sources. 【We provide excellent expert advice to businesses wishing to invest in Australia.】Our previous news releases for Chinese investors include the following topics:
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