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Embattled Businessman Overturns £1.6 Million Freezing Order

Published: 27 October 2014, in categories: Legal Updates | Commercial Litigation Updates | News and Updates

A British businessman has succeeded in overturning a £1.6 million asset freezing order after the High Court expressed ‘serious doubts’ that he could in any way be held responsible for a multi-million-pound international fraud.

A New York investor had, through his corporate vehicles, lent large sums of money to support ventures including a mining concession in Rwanda. He claimed that his money had been spirited away by fraudsters and blamed the businessman, who was said to have advised him both in his professional capacity and as a friend.

Although the businessman was not the recipient of any of the loans and denied any involvement in the money’s disappearance, £1.6 million of his assets were frozen by a judge after he was variously accused of negligence, breach of contract and breaching the fiduciary duty which he was said to owe the investor.

In upholding the businessman's challenge to the freezing order, the Court ruled that the investor had failed to show a ‘good arguable case’ that any of his missing money was recoverable from the businessman. It was also ‘a bold surmise’, based on ‘the flimsiest foundations’, to suggest that there was a real risk that the latter would dissipate his wealth unless restrained from doing so. In addition, there had been ‘serious and significant’ failures to disclose relevant information before the order was granted.

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