In a telling illustration of the acute enforcement difficulties posed by the bewildering complexity of some multinational groups, a company’s hopes of recovering $350 million, which it was owed under the terms of a London arbitration award, have been dealt a serious blow by the High Court.
Following its success in the arbitration, company A had obtained a worldwide assets freezing order against the other party to the proceedings, company B. India-based company B had failed to pay a penny of the award and was believed to hold most of its assets in a number of subsidiaries which were variously registered in Cyprus and the Isle of Man.
At company A’s behest, the Court had appointed receivers in respect of company B’s shareholdings in the subsidiaries. However, in refusing company A’s application for the subsidiaries’ assets to be frozen along with those of their mother company, the Court ruled that it had no jurisdiction to do so.
The Court noted that none of the subsidiaries were incorporated in England and Wales, nor did they have any assets, directors or other presence within the UK. They did not conduct any of their business in this country and they were not parties to the arbitration or any other substantive proceedings.