ISSUE 25 - MAY 2026
®
MAGAZINE Fraud • Insolvency • Recovery • Enforcement
FIRE International Edition: A Global Lens on Fraud, Insolvency, Asset Recovery and Enforcement
Thought Leadership for and by the FIRE Community
ThoughtLeaders4 FIRE Magazine • ISSUE 25
INTRODUCTION
“Your network is your net worth.”
- Porter Gale
We are delighted to present Issue 25 of the FIRE magazine in conjunction with our flagship Asset Recovery event. In this FIRE International edition, our authors dive into all the pertinent issues facing practitioners in multiple jurisdictions. Thank you for joining us at FIRE International and we hope you enjoy this thought-provoking issue. Thank you to all of our corporate partners, authors and members for their ongoing support to this ever-growing community.
The ThoughtLeaders4 FIRE Team Paul Barford Founder/Managing Director
Chris Leese Founder/Chief Commercial Officer
020 7101 4155 email Paul
020 7101 4151 email Chris
Danushka De Alwis Founder/Chief Operating Officer
Yelda Ismail Group Marketing Lead
020 7101 4191 email Danushka
020 3398 8551 email Yelda
Amelia Gittins Senior Strategic Partnership Executive
Ben Sullivan Commercial Director
020 3059 9797 email Amelia
020 3965 4386 email Ben
Melody Mok Conference Portfolio Manager
Lily Taylor Marketing Manager
020 3997 8527 email Melody
020 3433 2285 email Lily
CONTRIBUTORS Jon Felce - CYK Leonore Carron-Desrosiers CYK Cherrene Balasanthiran - Payne Hicks Beach Capucine de Hennin - Payne Hicks Beach Rick Brown - HFW Nicola Gare - HFW Jake Rickman - HFW Caroline Greenwell - Charles Russell Speechlys Peter Carylon - Charles Russell Speechlys Daniel Staunton - Charles Russell Speechlys James Popperwell - Macfarlanes Alex Douty - Macfarlanes Jonathan Pratt - Macfarlanes Sarah Gabriel - Peters & Peters David Fitzpatrick - Peters & Peters
Richard Greenburg - Twenty Essex Scott Cruickshank - HFW Catriona Hunter - HFW Daviel Leveson - HFW Lucy Burrows - ABC Legal Talent Syedur Rahman - Rahman Ravelli Niall Hearty - Rahman Ravelli Andrew Wilan - Payne Hicks Beach Jaavonne Taylor - Collas Crill Charlotte Miles-Griffiths - Collas Crill Kateryna Gupalo - Arzinger Law Firm Tetiana Bihun - Arzinger Law Firm Neal H. Levin - Rimon Law Mohammed Al Dahbashi - ADG Legal Ohoon Kwon - Cha & Kwon
CONTENTS
| F IREside Chat |
Passing On the Baton to the Next Generation – Journey of a FIRE Starter ....................................
5
| UK | The Hidden Costs of a Freezing Order ...............
9
High Court Draws Jurisdictional Limits on Chabra Relief in Gilbert v Broadoak ................... 13 Obtaining and Enforcing Freezing Orders English Law Perspective ..................................... 18 New York Convention - “Can Be Relied on by Sinners, No Less Than By Saints” ................ 22 Civil or Criminal? An Age-Old Question in a New Era of Fraud ............................................... 25 60 Seconds With... Richard Greenberg .............. 28
| Americas | BVI Shareholder Disputes Deadlock, Loss of Trust and Buy-Out Offers . ... 29
| Europe | Winning the Work Is Only the Beginning Rethinking Growth in Fraud and Asset Recovery ............................................. 32 Operation Atlantic Devised to Tackle Crypto-Related Fraud ........... 35 60 Seconds With... Lucy Burrows . ..................... 36 Interpol Issues Stark Warning About Increasingly Sophisticated Global Fraud . ......... 38 The Ever-Evolving Landscape of AI, Fraud & Privacy .............................................. 39 Re Esken Ltd [2026] - A Quiet Shift in Cross Border Insolvency Strategy ................. 42 When Sanctions Lead to Confiscation Ukraine’s Approach to State Recovery of Assets ... 45 “Can You Trust an Offshore Trust?” . ................. 49
| Middle East | Why Business Continuity is a Legal Issue Lessons from the UAE for Global Companies . ..... 52
| Asia | Crypto Asset Recovery in Korea Practical Challenges in Seizure, Enforcement, and Cross-Border Proceedings ............................. 54 2
Fraud. Insolvency. Recovery. Enforcement. The global Asset Recovery community bringing together key practitioners across contentious insolvency, fraud litigation and international enforcement.
Upcoming Events: FIRE Channel Islands & Isle of Man 16-17 June 2026 | Jersey, Channel Islands Women in FIRE presents: Asset Recovery in Action 30 September 2026 | London, UK Asset Recovery & Enforcement Circle 1-2 October 2026 | Ascot, UK Middle East Poolside Cocktail Reception 8 November 2026 | Dubai, UAE The 6th Annual Fraud, Insolvency, Recovery, Enforcement - Middle East 9 November 2026 | Dubai, UAE FIRE Asia Circle 23-24 November 2026 | Malaysia FIRE Starters: Global Summit - Dublin 24-26 February 2026 | Dublin, Ireland
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| F IREside Chat |
ThoughtLeaders4 FIRE Magazine • ISSUE 25
PASSING ON THE BATON TO THE NEXT GENERATION
JOURNEY OF A FIRE STARTER Authored by: Jon Felce (Partner) & Leonore Carron-Desrosiers (Senior Associate) - CYK
After a number of years on the board of ThoughtLeaders4’s signature next-generation FIRE event (the FIRE Starters Global Summit in Dublin), earlier this year Jon Felce was proud to pass on the TL4 torch to his CYK colleague, Senior Associate, Leonore CarronDesrosiers. After Leonore’s first summit on the board, and ahead of Jon joining the board for FIRE International in Vilamoura, Portugal, Jon and Leonore give their thoughts about their respective journeys to fire up the next generation of asset recovery practitioners. for rising stars of the industry to learn from each other, share their expertise and develop essential business skills to make their mark in the industry. FIRE Starters aimed to provide an informal space for young professionals from around the world to participate in panels and workshops, and to interact with each other in a welcoming and thoughtprovoking environment.
Jon: When TL4 launched, there appeared to be a real dearth of opportunities for up-and-coming practitioners to have their voice heard, and to get the opportunities to actively partake in industry events and build the kind of connections that senior figures within the industry had well established. The intention behind FIRE Starters was therefore to create a space
During the early days of TL4, COVID hit. Whilst that could have put a dampener on the fledgling next-gen movement, ironically the seeds of success were borne in those difficult first couple of years. Without the restraints of marketing budgets and overseas travel, far more opportunities to speak and develop contacts presented themselves online and at minimal to no cost. An overarching FIRE Starters committee was formed, together with various
regional committees, who between them started to get to know one another over Zoom, worked together to arrange a host of online webinars and even started to refer matters (my first of those being from Dominik Milani of NSF in Switzerland, a member of one of those committees and someone I had only met via Zoom at the time). Fast forward to the end of COVID, and the first Dublin event took place in 2022. The agenda was drafted by the advisory board, who were also able to invite their peers to speak (and fancy dress), and was an overwhelming success, bringing over 220+ attendees from 21+ jurisdictions. Many of the people from those early days and since have become friends, as well as people who I look to catch-up with at industry events and, of course, refer a case to from time to time.
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ThoughtLeaders4 FIRE Magazine • ISSUE 25 interest in asset recovery and learn from their experiences.
By the time the FIRE Starters Global Summit had occurred in 2025, it became apparent that it was time to hand over the reins to a talented colleague. Standing at the bar in House waiting to get a drink, it dawned on me that the room was full of more junior people I didn’t recognise, the next up-and-coming generation of asset recovery practitioners. I was very pleased therefore to hand over the baton to Leonore this year, and by all accounts the FIRE Starters Global Summit was a resounding success. Whilst remaining young at heart, even if the hairline is challenging that assumption, I look forward to remaining engaged in the next generation community as part of the FIRE Starters Committee as the next wave of superstars grow the initiative yet further. In the meantime, I am looking forward to joining the upcoming advisory board for FIRE International in Vilamoura with one of my former Dublin advisory board members Caroline Greenwell of Charles Russell Speechlys for company amongst others. Many speakers from the early days of FIRE Starters have similarly migrated to the speaking agenda, a reflection of the success of the initiative. With FIRE Starters Summer Schools a regular feature of the calendar, next-gen pre-conferences added to established events, and most recently drinks and walks on the menu, these are exciting opportunities for FIRE Starters to develop their networks and get the experience and confidence that will stand them in good stead for the future.
Leonore: A few months ago, Jon asked if I would be interested to join the advisory board for the FIRE Starters Global Summit in Dublin, which took place on 25-27 February 2026. He spoke very highly of the FIRE Starters initiative, its welcoming culture and thoughtprovoking community. I was excited to attend my first conference abroad and to speak on my first panel. I felt like it would be a unique opportunity to meet like-minded professionals who share my
The reality exceeded my (already very high) expectations. I first met other attendees and members of the advisory board when I joined a number of prep calls for a multi-jurisdictional panel titled ‘A Transatlantic Conversation’ with moderator Stéphane de Navacelle (from France), and co-panellists Andrea Hartley (from the U.S.), Joanna Didisheim (from Switzerland), and Kazimieras Karpickis (from Lithuania). It was clear from the start that this was a like-minded community of young and proactive professionals. We discussed our individual experiences seeking enforcement and using the different asset recovery measures available in our respective jurisdictions. I gained unique insight into different legal systems which I’m sure will prove useful for my practice as I mostly work on complex cross-border matters. It was also fascinating to realise how different the interaction between civil and criminal proceedings is between common law jurisdictions such as the U.K. and the U.S. versus civil law jurisdictions such as those of some of my co-panellists.
The outcome of these brainstorming sessions proved to be a very successful panel, which did not feel rehearsed or impersonal. I found that the relaxed and friendly atmosphere of the conference meant that my first panel was a dynamic session, where I felt comfortable speaking at length about topics I’m really interested in, such as contempt of court, and sharing my practical experience using specific remedies such as the oral examination procedure under Part 71 of our Civil Procedural Rules.
| F IREside Chat | previously worked with Tobias on a cross-border matter last year. Although we’d spoken many times on calls, we’d never had the chance to meet in person. In Dublin, we finally met and discovered that we shared far-ranging interests from recent caselaw involving crypto assets to more mundane topics such as European travel. Far from being limited to strictly legal discussions, the FIRE Starters Summit also features inspirational speakers from very different industries and fosters an interdisciplinary approach to our highly technical careers. As part of my role on the Advisory Board, I also co-chaired the conference and introduced keynote speaker, Professor Richard Wiseman who gave a talk on the psychology of lying. This year, rugby legend Former Captain of Ireland & The British & Irish Lion Brian O’Driscoll also shared his personal journey and it was fantastic to see how such a different experience resonated with the audience.
I found FIRE Starters Global Summit to strike a perfect balance between intellectually stimulating talks, energetic technical conversations and fun networking activities (such as visiting the Guinness Storehouse). I very much look forward to participating in next year’s summit and to continue to take on more responsibility to help bring together the event and support the FIRE Starters initiative.
I also met many very inspiring lawyers, insolvency practitioners and other professionals in the asset recovery space from all around the world. In particular, I had the chance to meet Swiss lawyer Tobias Schaffner, who I know Jon invited to speak at last year’s FIRE Starters Global Summit and to whom we have referred work and received work from since. I had
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ThoughtLeaders4 FIRE Magazine • ISSUE 25
THE HIDDEN COSTS OF A FREEZING ORDER
Authored by: Cherrene Balasanthiran (Legal Director) & Capucine de Hennin (Associate) - Payne Hicks Beach
Introduction 1. Freezing Orders are among the most draconian but potent interim remedies available to the English court. Their function, to prevent the dissipation of assets pending judgment, is well understood, as are the stringent duties imposed on applicants. What is less frequently appreciated, however, is the financial exposure created by the involvement of non respondents. 2. One of the most common but underestimated costs of a Freezing Order arises from the applicant’s obligation to meet the reasonable costs of third parties served with or affected by the order. In many cases, the effective operation of a Freezing Order depends on service on banks, trustees, or other institutions who are not parties to the underlying dispute. Their compliance has a price, and that price should be borne by the applicant. 3. This article examines the source, scope, and practical consequences of that exposure.
Service on Non Respondents 4. Although a Freezing Order formally binds only the respondent, it will often be ineffectual unless served on third parties who control or hold the respondent’s assets. 1
Common examples include: 4.1. banks and other financial institutions; 4.2. trustees or fund administrators; 4.3. corporate service providers and professional advisers; and 4.4. digital asset platforms and exchanges. 5. These parties are typically innocent actors drawn into litigation at short notice and under threat of contempt of court for non-compliance. Their compliance is essential for the Freezing Order to be effective but it is rarely, if ever, cost neutral.
The Undertaking to the Court 6. As a condition of relief, the applicant must give the usual package of undertakings. Of particular relevance is the undertaking to pay the reasonable costs of any non respondent who is served with or notified of the order and who incurs costs as a result of complying with it, as reflected in the standard formulation set out in Gee on Commercial Injunctions1. 7. The standard formulation of the undertaking provides the following wording:
Gee on Commercial Injunctions 7th Ed., paragraph 21-022
The Applicant will pay the reasonable costs of anyone other than the Respondent which have been incurred as a result of this order including the costs of finding out whether that person holds any of the Respondent’s assets and if the court later finds that this order has caused such person loss, and decides that such person should be compensated for that loss, the Applicant will comply with any order the court may make.” This undertaking is not incidental. It is a substantive obligation and an integral part of the court’s control over the grant of draconian interim relief. 8. Applicants should note with care the broad formulation of the undertaking. It is not restricted to the legal costs incurred as a result of the order, but can include the non respondent’s own costs.
Purpose of the Undertaking 9. The rationale for this is straightforward. Non respondents should not be left out of pocket as a result of an order obtained in litigation to which they are not parties. Freezing Orders are frequently made without notice, require immediate action, and carry the threat of penal consequences. It would be unjust for third parties to absorb the costs of compliance.
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| UK |
ThoughtLeaders4 FIRE Magazine • ISSUE 25 10. The undertaking therefore allocates those costs to the party seeking the benefit of the order and encourages restraint in both drafting and service.
costs is uncommon. In many cases, applicants elect to meet the costs to avoid delay, reputational issues, or further procedural complications. 15. The result is that the true cost of a Freezing Order may extend well beyond the costs recoverable interpartes.
Costs Incurred in Practice 11. In practice, the costs incurred by non respondents are often significant. They may include: 11.1. external legal advice to interpret the order and assess risk; 11.2. internal compliance and administrative costs, particularly within large financial institutions; 11.3. costs of identifying, freezing, and monitoring accounts or assets; 11.4. costs associated with disclosure obligations imposed by the order; and 11.5. costs of applying to court to clarify or vary the order. 12. Banks and regulated institutions, in particular, are unlikely to take a minimalist approach when faced with a High Court order backed by contempt sanctions. Their response is, therefore, typically cautious, comprehensive, and correspondingly expensive.
Scope of the Applicant’s Exposure 13. A recurrent difficulty is that applicants underestimate both the scale and the openness of their exposure. The undertaking is not capped by reference to expectations or budgets. The question is whether the costs were reasonably incurred as a result of the order. 14. This is a wide threshold and provided that threshold is met, the applicant will be required to pay. While disputes can arise as to reasonableness or quantum, satellite litigation over third party
Practical Guidance for Practitioners 16. Applicants and their advisers can, however, take steps to mitigate these risks. 16.1. First, service should be targeted. Only those third parties whose involvement is necessary should be served. Over inclusive service increases cost exposure without improving effectiveness. 16.2. Second, careful drafting matters. Precise, intelligible orders reduce the need for non respondents to seek legal advice or clarification, thereby driving up costs for all parties. 16.3. Third, early and constructive engagement with key non respondents can reduce duplication and inefficiency. A short explanatory letter or compliance note may materially narrow the scope of external advice. 16.4. Fourth, realistic budgeting is essential. Third party compliance costs should be treated as an inherent element of the remedy, not a contingent afterthought. 16.5. Finally, clients must be advised clearly at the outset. The grant of a Freezing Order carries significant financial consequences beyond the immediate costs of the application.
17.1. First, non respondents should seek immediate legal advice, to ensure that they understand the scope and nature of their own obligations under the Freezing Order. Freezing Orders usually require immediate action, the obligations are often onerous and noncompliance carries the threat of penal consequences, Non respondents should assume they have been served with the Freezing Order for good reason: depending on the nature of their role, their obligations can be extensive. 17.2. Second, legal advisers to non respondents should correspond early with the applicant, making it clear that they and their client(s) are relying on the undertaking in relation to costs. 17.3. Third, non respondent’s costs incurred as a result of the order can and should be sought from the applicant under the undertaking. The standard wording of the undertaking is widely drafted, such that it is not limited to only the reasonable legal costs, but the client’s own costs of compliance.
Conclusion 18. Freezing Orders remain an indispensable tool in commercial litigation. But their effectiveness depends on third parties whose cooperation comes at a cost. The undertaking to pay non respondents’ reasonable costs is not a formality; it is a significant and sometimes costly feature of the jurisdiction. 19. A clear understanding of that exposure is essential if Freezing Orders are to be sought—and deployed—proportionately and effectively.
17. Non respondents and their advisers should note the following:
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ThoughtLeaders4 FIRE Magazine • ISSUE 25
HIGH COURT DRAWS JURISDICTIONAL LIMITS
ON CHABRA RELIEF IN GILBERT V BROADOAK Authored by: Rick Brown (Partner), Nicola Gare (Knowledge Counsel), Jake Rickman (Associate) - HFW
The scope of the court’s jurisdiction to award Chabra relief now appears more limited and will apply only where the underlying claim is ongoing. A recent judgment has clarified certain issues considered in Commercial Bank of Dubai v Al Sari [2024] EWHC 3304 (Comm), which held (obiter) that applicants may in principle rely upon the ‘Enactment Gateway’ in order to utilise the Chabra relief against non-parties and preserve international assets held by them to the order of the judgment debtor.
What is the Chabra Jurisdiction? Since the 1990s, the so-called “Chabra” relief has enabled victims of fraud and misfeasance to restrict the ability of non-parties (i.e. those persons against whom no underlying cause of action exists) to dissipate assets capable of satisfying a judgment debt.
Although the Chabra jurisdiction can in principle extend to overseas nonparties and assets, the recent English High Court judgment in Gilbert v Broadoak Private Finance Ltd [2026] EWHC 153 (KB) (Gilbert v Broadoak) demonstrates that the relief is subject to clear jurisdictional limits. In particular, the court will not grant Chabra relief internationally without a valid gateway for service out of the jurisdiction — even where there is evidence of asset dissipation and conduct capable of frustrating the administration of justice.
jurisdiction. The court ruled that the judge at the without notice hearing had erred in granting the application to serve the WFO outside the jurisdiction on the respondents in Spain because none of the service gateways specified in Practice Direction 6B of the Civil Procedure Rules (the PD6B Gateways) had been satisfied. The court accordingly discharged the WFO.
Overview
In the 1992 judgment of TSB Bank v Chabra [1992] 1 WLR 231, the court recognised that where an applicant has a good arguable cause of action against defendant A, and provided that there is good reason to suppose that assets held in the name of non-party defendant B can be used to satisfy a judgment against A, it has the power
On 30 January 2026, David Quest KC sitting in the London Circuit Commercial Court handed down judgment following the return date hearing in a without notice (ex parte) worldwide freezing order (WFO) made by Bird J in August 2025, pursuant to the court’s Chabra
Background to the Chabra Jurisdiction
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ThoughtLeaders4 FIRE Magazine • ISSUE 25 to grant a freezing order against B, notwithstanding that the applicant has no cause of action against B. Subsequent case law confirmed that the Chabra jurisdiction is not limited to circumstances where the non-party holds assets in which the defendant has a proprietary interest, such as those arising out of a trust. As with the court’s powers of injunction generally, the Chabra jurisdiction may only be exercised where it is just and convenient to do so. It is reserved for exceptional circumstances and must be exercised with caution so that innocent third parties who are not substantive defendants and have not acted to frustrate the administration of justice are not oppressed. In plain terms, the Chabra jurisdiction is a powerful tool for victims of fraud and misfeasance. As both an interim remedy and means of enforcing a final judgment, Chabra relief ensures that judgment debtors cannot put assets out of reach of judgment creditors by transferring them to third parties who may not otherwise be directly liable to the judgment creditor. However, for parties seeking to enforce a final judgment (as opposed to an interim injunction pending judgment on the underlying claim), there was uncertainty as to whether the Chabra jurisdiction extended to non-parties resident outside the jurisdiction with no assets in the jurisdiction. Gilbert v Broadoak appears to answer that question in the negative.
Judgment At the return hearing, the Applicants submitted that the following PD6B Gateways were satisfied, which the court ruled on as follows: In determining whether the court should continue the WFO, the essential question was whether the court could exercise jurisdiction over the Respondents in Spain. To succeed on the jurisdictional issue, the Applicants had to show that at least one of the PD6B Gateways was satisfied. Jurisdictional Gateway Gateway 2: ‘The Injunction Gateway’
Gateway 3: ‘Necessary or Proper Party’
Gateway 10: ‘Enforcing a Judgment’
Case Background The applicants to the WFO proceedings were an investor and his company (the Applicants). The Applicants had previously obtained an unsatisfied judgment of approximately £4.2 million owed by Broadoak Private Finance Limited (the Defendant). The Applicants had only recovered approximately £600,000 of the judgment debt. Accordingly, they sought to preserve assets which they alleged had been diverted from the Defendant to the wife of the Defendant’s shareholder (the First Respondent) and a Spanish company in which the First Respondent was an officer (the Second Respondent) (together, the Respondents). The court at the without notice hearing granted the WFO in accordance with the Chabra jurisdiction. At the return hearing, the Respondents applied to discharge the WFO on several grounds, including that none of the PD6B Gateways had been met.
Gateway 11: ‘Property Within the Jurisdiction’ Gateway 20: ‘The Enactment Gateway’
Applicants Position
Court’s Ruling
A claim is made for an injunction ordering the defendant to do or refrain from doing an act within the jurisdiction; freezing orders accordingly fall within the scope of a claim making such an order.
Case law confirms that freezing injunctions are excluded from the scope of this gateway because “in-junction” in this instance refers only to final, substan-tive relief and not to interim remedies.
The Respondents were necessary or proper parties to the claim against the Defendant, being necessary parties to any further enforcement claims that may be brought against the Defendant in England.
This gateway requires that there must be a common issue to be investigated between the Defendant and the Respondents. The court had already entered final judgment against the Defendant, and therefore there were no pending issues, which remained to be tried.
The Applicants made the application to facilitate enforcement of judgments and costs entered by the English courts against the Defendant (as an English-registered company), which remained un-satisfied.
Previous case law confirms that this gateway is not available for relief ordered under the Chabra jurisdiction because the purpose of a freezing injunction is not in itself enforcement but to prevent the right of enforcement from being rendered ineffective by asset dissipation.
The subject matter of the application related to the Defendant’s judgment debt, which is a chose in action payable in England.
The subject of the WFO was not the judgment debt but rather assets held by the Respondents (as non-parties), which were not within the jurisdiction.
A claim is made under an enactment which allows proceedings to be brought and those proceedings are not covered by any of the other PD6B Gate-ways; accordingly the WFO application was made under s.37 of the Senior Courts Act 1981 i.e. an enactment, which therefore empowers the court to grant injunctive relief.
S.37 of the Senior Courts Act 1981 is not an enact-ment which allows proceedings to be brought. In-stead, s.37 is “concerned only with remedies availa-ble in proceedings that are otherwise properly brought”.
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ThoughtLeaders4 FIRE Magazine • ISSUE 25 Although the court accepted that the substantive conditions for Chabra relief were met, including evidence that funds paid out by the Defendant were misapplied and that there was a risk of dissipation, it departed from the commentary in the earlier case of Commercial Bank of Dubai v Al Sari [2024] EWHC 3304 (Comm) (Commercial Bank of Dubai), which suggested (obiter) that applicants may in principle rely upon the Gateway 20 (the ‘Enactment Gateway’) to avail themselves of Chabra relief in respect of foreign non-parties holding assets to the order of the judgment debtor. Here, the court ruled that neither the Enactment Gateway nor any other PD6B Gateways operate in these circumstances. Accordingly, in the absence of a jurisdictional link, a Chabra order could not be made because permission to serve the application out of the jurisdiction upon the Respondents in Spain should not have been granted. The court therefore discharged the WFO in full.
| UK |
Key Takeaways For victims of fraud or misfeasance in possession of a final judgment seeking to prevent dissipation by the judgment debtor where the assets are held by non-parties residing outside the jurisdiction, Gilbert v Broadoak represents a significant constraint on extra-territorial asset protection and underlines that there are limits to the extent to which the courts are prepared to establish jurisdiction against extra-territorial non-parties. Following Commercial Bank of Dubai, Gilbert v Broadoak also reflects the importance of undertaking asset investigations at an early stage so that any actionable interim relief can be sought and awarded before the substantive proceedings are concluded. This is because Gateway 3 (‘necessary or proper party’) requires there to be a live ‘anchor issue’ with the defendant against whom the cause of action exists. When in possession of a final judgment, it now appears unlikely that the court will be persuaded that there is such a live ‘anchor issue’.
We do, however, understand that an appeal has been granted and so it remains to be seen as to whether the reasoning and decision will be upheld. In the meantime, the court when granting permission to appeal also allowed the WFO to remain in place, pending determination of the appeal. We will write further once the appeal decision has been published.
Maria Alexandroff, Associate, assisted in the preparation of this briefing.
In closing, the court acknowledged that the outcome may appear harsh given that the English judgment remained unsatisfied and there was a body of evidence which supported freezing relief. However, the court emphasised that any expansion of the court’s jurisdiction to assist enforcement against overseas non-parties would be a matter for the Civil Procedure Rules Committee and not for judicial discretion.
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ThoughtLeaders4 FIRE Magazine • ISSUE 25
OBTAINING AND ENFORCING FREEZING ORDERS
ENGLISH LAW PERSPECTIVE Authored by: Caroline Greenwell (Partner, Dispute Resolution, London), Peter Carylon (Associate, Dispute Resolution, London/Singapore) & Daniel Staunton (Knowledge Development Lawyer, Dispute Resolution and Corporate Restructuring and Insolvency, London) - Charles Russell Speechlys A freezing order, also known in some common law jurisdictions as a Mareva injunction, is an interlocutory injunction which restrains a respondent from disposing of, or dealing with, their own assets. It’s a draconian remedy but a necessary tool in a litigator’s arsenal to prevent the moving, hiding or dissipation of assets.
Overview of Freezing Orders The power to grant a freezing order in England and Wales derives from the equitable powers of the High Court and is a civil remedy. In order to obtain a freezing order, the applicant must establish the following: 1) A good arguable case; 2) The existence of assets belonging to or under the control of the respondent against which judgment could be enforced; 3) A real risk that the respondent will dissipate those assets and the judgment will be left unsatisfied if the order is not given; and 4) That the order is just and convenient.
There are, generally speaking, two types of freezing order an English court can make: (1) a domestic only (confined to assets within the jurisdiction of England and Wales only) and (2) a Worldwide Freezing Order (“WFO”) which, as the name suggests, has both territorial and extra-territorial effect (insofar as the English courts are concerned). There are model forms (i.e. a standard form of court order) that apply to both that ought to be used as a general starting point. Freezing orders can be obtained prior to the commencement of court proceedings, during court proceedings, or post-judgment. In practice, however, applications are normally made before proceedings are commenced to ensure there are assets against which to enforce a judgment. As such, applications are usually made ex-parte (which means without notice being given to the respondent) to prevent the respondent from having the opportunity to put assets out of the reach of the applicant. Applications for freezing orders can be (and usually are) accompanied by requests for ancillary orders i.e. disclosure orders, which if granted, will compel a respondent to give full disclosure of their (worldwide) assets (nature, value and location etc) and/or to supply documentary proof e.g.
bank statements etc. These ancillary powers can be extremely powerful and can increase the effectiveness of a freezing order to aid the overall asset recovery strategy. The quid pro quo is that there is a requirement for the applicant to provide (i) full and frank disclosure to the court when making an application (referring to all of the relevant facts and materials to which a respondent would refer were it in attendance), as well as (ii) a cross-undertaking in damages, which would be called upon to compensate the respondent if it transpires that the freezing order was wrongly granted and that the respondent has suffered losses as a result of that circumstance. A respondent can apply, or the court can order on its own volition, that this cross-undertaking be “fortified” i.e. by a payment into court of a lump sum or the provision of security by obtaining a bank guarantee equal to the respondent’s estimated losses. Fortification is more likely if the applicant has limited assets within the jurisdiction or genuine solvency concerns that could call into question their ability to pay the crossundertaking if later called on to do so. In certain conditions the court even has the power to order the applicant to provide asset disclosure.
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ThoughtLeaders4 FIRE Magazine • ISSUE 25 The assets covered by the freezing order can be both tangible and intangible assets provided they are not perishable.
Application Outside of the Jurisdiction If a respondent’s assets are located around the world, it may be necessary to obtain a WFO. To enforce a WFO outside of England and Wales, the Court’s permission is required, as reflected in the standard form order. The court will consider all the relevant circumstances of the case to ensure the benefit to the claimant is proportionate to the cost and inconvenience of the defendant having to defend proceedings in jurisdictions outside of England and Wales. The recognition and enforcement of an English WFO abroad will be a matter of local law in the foreign country the applicant is seeking to enforce in. Importantly, some civil law jurisdictions do not recognise freezing orders and will not allow the enforcement of an English WFO. As to the recognition and enforcement of foreign WFOs in the UK; the position has become more complicated following the UK’s withdrawal from the European Union (“Brexit”). Legal advice on the specific facts of each case should always be sought but, generally speaking, since 1 January 2021 onwards (when Brexit took legal effect), the previous EU mutual recognition and enforcement regulations (the Recast Brussels Regulation EU 1215/2012 and Brussels Regulation EU 44/2001 (together “Brussels”) and Lugano Convention 2007 (“Lugano”) ceased to apply in England and Wales except for limited transitional measures i.e. for proceedings initiated prior to that date. Although England and Wales has adopted a new regime intended to largely mirror Brussels and Lugano -
the Hague Convention 2019 (“Hague”) - Hague does not apply to interim measures like WFOs. This means that unless and until further domestic legislation is implemented, recognition and enforcement of English WFOs in EU/EEA or vice versa is no longer uniform and straightforward procedures that existed under Brussels and/or Lugano but reverts to the position which already applied to non-EU states. Foreign WFOs can, in principle, be “recognised” (n.b. not in the technical definition in Brussels or Lugano) in England and Wales by initiating a new Part 8 claim and making an application under section 25 Civil Jurisdiction and Judgments Act 1982 (CJJA). This is an ancillary statutory jurisdiction granting powers for the English courts to grant interim relief in aid of the foreign substantive proceedings including both freezing orders and ancillary (disclosure) orders. The power remains discretionary; applicants will, not only have to meet the stringent tests set out at (1)-(4) above
(e.g. good arguable case, just and convenient, real dissipation risk, assets in jurisdiction etc) but also establish whether it is “inexpedient” for the English court to grant relief or not. The question of “expediency” is a question of fact in each case but case law has established the following principles: 1) It will rarely be appropriate for the court to exercise jurisdiction to grant a freezing order where a defendant has no link to this jurisdiction i.e. has no assets in England and Wales nor owes any allegiance to the English court by the existence of in personam jurisdiction over them (e.g. domicile or residence). Protective measures should normally be left to the foreign court where the assets are to be found or where the respondent resides unless there are “exceptional circumstances”; 2) Where there are assets in England and Wales (or reason to believe there are) but no in personam jurisdiction it will often be appropriate to grant a domestic freezing order only; 3) Where there are both assets and in personam jurisdiction then a WFO may be granted subject to further discretionary measures:
a. If the applicant has already applied and failed to obtain a freezing order in the primary jurisdiction it will not be appropriate for the English courts to intervene; b. If the making of the order will interfere with the management of the case in the foreign court e.g. is inconsistent or overlaps with a foreign domestic order it will not be appropriate for the English courts to intervene; c. If there is a policy in the primary foreign jurisdiction to not grant WFOs or ancillary orders it will not be appropriate for the English courts to intervene; d. If there is a danger that the English order will create any confusion or disharmony or risk of conflict with a foreign court order it will not be appropriate for the English courts to intervene; e. More generally, if there is a risk of any jurisdictional challenge or conflict it will not be appropriate for the English courts to intervene; and f. In the event disobedience/breach of the order is to be expected, is the English court making an order it cannot enforce? If so, it will not be appropriate to intervene.
Enforcement Within the Jurisdiction Once a freezing order has been obtained domestically or internationally, it then needs to be served, and this should be done as soon as possible after the hearing. The applicant should aim to effect personal service of the freezing order so that it can then be enforced and ultimately weaponised (if not complied with) by committal proceedings. It should be served on both the respondent(s) and any third parties who are known or believed to hold assets on their behalf, including
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ThoughtLeaders4 FIRE Magazine • ISSUE 25 banks. The Court can give permission for alternative service, for example by email, which may be necessary where the Defendant is deliberately evading service. Banks are often third parties to freezing orders as they typically have systems in place for freezing accounts when they are notified of such an order. It is advisable to serve the freezing order on the Bank before the individual respondent to reduce the chances of the respondent transferring funds before the bank has been able to freeze the account. The effect of a freezing order is that it revokes the customer mandate to the extent of the order. In addition to freezing the defendants’ bank accounts, it may also be possible to put a charge on any property owned by the defendant at the land registry, or over any other property (excluding perishable goods) which should be set out in the order. This will help ensure that an eventual Judgment can be enforced in favour of the applicant and there will be assets which could be used to satisfy the Judgment debt. Once a freezing order has been granted, it is advisable to monitor the respondent(s) to ensure there is compliance. It is often necessary to raise queries in relation to disclosure in inter-partes correspondence, make formal requests to the court for further information, and seek permission to cross-examine the respondent(s).
If there have been serious breaches of the freezing order (and not simply a technical breach where it might be considered disproportionate to seek to enforce the order) then the principal method of enforcing a freezing order in England and Wales is by bringing committal proceedings for contempt of court pursuant to Civil Procedure Rule 81. The rationale is that a breach of a freezing order is considered an attack on the administration of justice which usually merits an immediate prison sentence. There are strict procedural requirements in respect of committal proceedings, including that they can only be brought against a person on whom the order, containing a penal notice in accordance with the rules, has been personally served. This demonstrates the importance of ensuring the penal notice is correctly and prominently displayed on the order. There must also be a deliberate or wilful breach of the freezing order, which must be established beyond reasonable doubt (i.e. the criminal standard of proof). Naturally a corporate entity that is subject to a freezing order cannot be imprisoned. However, a committal order can be made against any director or other officer provided the injunction was served personally on that individual. In addition to imprisonment, other penalties the court can impose includes a fine and confiscation of assets.
Aside from committal proceedings, alternative methods of enforcement include writs of sequestration and bench warrants. A writ of sequestration enables the defendant’s property to be seized and retained until they comply. On the other hand, a bench warrant can be issued to secure the defendant’s attendance at court, which means the defendant can be arrested and held in custody until the hearing.
Potential Challenges Following the making of the order, it is possible for a respondent to apply for a discharge of a freezing order. The defendant would have to establish one or more of the following grounds in order to be successful in its application: a) The order is oppressive b) The applicant has failed to comply with its duties of full and frank disclosure to the court c) There has been an inordinate delay by the applicant d) The applicant has failed to comply with its undertaking.
Summary As will be evidenced from above, obtaining a freezing order is only the first step, and before that first step is taken, it is important to consider (a) whether the freezing order can achieve its aims (i.e. to protect sufficient assets that would satisfy the applicant’s losses) and (b) ultimately whether the threat of enforcing the penal notice on the order will have the desired effect on the respondent. Further consideration will need to be given to whether the freezing order should be a domestic order or a WFO, and which jurisdictions are likely to be involved and the associated requirements. Failure to consider enforcement and longer term strategy at an early stage may render the freezing order ineffective, and absence of careful planning may put the respondent on notice and/or otherwise encourage the further dissipation or hiding of assets. A carefully thought through strategy surrounding the application for a freezing order is, therefore, imperative.
*Disclaimer: this article is not to be relied upon as legal advice. The circumstances of each case differ and legal advice specific to the individual case should always be sought.
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ThoughtLeaders4 FIRE Magazine • ISSUE 25
NEW YORK CONVENTION
“CAN BE RELIED ON BY SINNERS, NO LESS THAN BY SAINTS” Authored by: James Popperwell (Partner), Alex Douty (Senior Associate) & Jonathan Pratt (Senior Knowledge Lawyer) Macfarlanes In the recent case of Hulley Enterprises Ltd & Ors v The Russian Federation [2026] EWHC 456 (Comm), Mr Justice Bright granted leave to enforce arbitration awards of more than US$50 billion (the Awards) obtained by the claimant companies against the Russian Federation (“Russia”). The judgment considered a number of issues that will be of interest to both arbitration practitioners and fraud specialists. This short article focusses on one of those issues, namely the circumstances in which underlying illegality may enable a defendant to resist enforcement of an arbitral award on public policy grounds.
Background The claimant companies were formerly majority shareholders in OAO Yukos Oil Company (Yukos). The claimants alleged that Yukos’ oil assets had been unlawfully expropriated by Russia and claimed damages from Russia under the Energy Charter Treaty (the ECT). These claims were referred to arbitrations in The Hague where the tribunals made the Awards. The claimants issued proceedings in England for enforcement of the Awards pursuant to section 101 Arbitration Act 1996 (the Act). Russia relied on section 103(3) of the Act and argued
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ThoughtLeaders4 FIRE Magazine • ISSUE 25
nature of the underlying business. This meant that there was not a sufficient connection between the alleged illegality and the Awards and it would not be contrary to public policy to enforce the Awards.
that it would be contrary to public policy to enforce the Awards. Russia cited a number of reasons for this, but this article focusses on Russia’s allegation that the claimants owed their ownership of Yukos to the illegal conduct of a number of Russian individuals (the Russian Individuals), who had bribed officials to manipulate the auction process when Yukos was privatised in 1995 and 1996. Mr Justice Bright had to decide whether this (alleged) illegality meant that the Awards should not be enforced on public policy grounds. This was determined as a preliminary issue, on the assumption that Russia’s factual allegations relating to bribery and corruption were true.
Applicable Principles The judgment contains a careful analysis of the rules on whether enforcement of an award should be refused on public policy grounds. The following points are worth highlighting: •
nglish public policy leans in favour E of enforcing arbitral awards. The burden lies with the party resisting enforcement and the threshold for a public policy objection is high.
•
he question is whether T enforcement of the award is contrary to public policy – not whether the underlying transaction is contrary to public policy.
•
here is a distinction to be drawn T between English domestic public policy and international public policy. Where the tribunal has found that a contract is legal under its governing law, an English court will not refuse to enforce an award on the ground that that underlying contract might be contrary to English domestic public policy.
•
here “international public policy” W is engaged, on the other hand, this may result in an English court refusing to enforce an award on the ground that the underlying transaction is illegal. International public policy is sometimes said to be based on “universal principles of morality”. This may include cases of fraud or corruption but only where there is a sufficient connection between the illegality and the award. Importantly, there is a difference between a contract to bribe and a contract that has been procured by bribery. The former may be grounds for refusing to enforce an award; the latter is not.
Outcome Applying those principles to the assumed facts, Mr Justice Bright held that there was not a sufficient connection between the alleged criminality involved in the original acquisition of Yukos and the Awards. Russia’s case was, fundamentally, that the shares in Yukos had been stolen from the Russian people as a result of the illegal actions (bribery and corruption) of the Russian Individuals. According to Russia, the shares in Yukos were then transferred to the claimant companies via a series of intermediary companies as part of an unlawful asset-laundering (and tax evasion) scheme designed to obscure the criminal origins of the shares. Russia said that, to accept that these arrangements put a sufficient distance between the original criminality and its proceeds, would be to accept that the Russian Individuals had successfully laundered the proceeds of their crimes. The judge admitted that he was troubled by this
“morally weighty argument” and accepted that, without the original illegality (on the assumed facts), the claimant companies would not have acquired the Yukos shareholding and would not therefore have been able to make claims under the ECT or to have obtained the Awards. Ultimately, however, the judge considered that he was bound by previous authority distinguishing between contracts that have been procured by bribery and contracts to bribe. In this case, the investments were (at most) ones that were procured by bribery and were not contracts to perform illegal acts. Yukos was an oil and gas business, not a criminal concern. Any illegality surrounding the original acquisition of the Yukos shareholding did not affect the lawful
Comment Mr Justice Bright was at pains to emphasise that, whilst he had assumed that the allegations made by Russia in its pleaded case were true, he did so only for the purposes of determining the preliminary issues. Nonetheless the conclusion that, even if the alleged illegality did occur, this would not be grounds for resisting enforcement of the Awards, is a striking one. Mr Justice Bright concluded his judgment by saying that “litigation of this kind is not a moral beauty contest” and that the proenforcement provisions of the New York Convention, as implemented in English law by ss101-103 of the Act,
“can be relied on by sinners, no less than by saints”. This should not (of course) be seen as the English court condoning illegality. Rather, it reflects the fact that, in enforcement proceedings, the court is not being asked to adjudicate on the underlying subject matter of the dispute (that is the function of the tribunal, which in this case had already rejected Russia’s arguments); it is being asked to adjudicate on the enforcement of the award. When performing that function (as this case shows), the English court will seek to give effect to the pro-enforcement approach in the New York Convention and to adopt a narrow approach to the public policy exception.
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ThoughtLeaders4 FIRE Magazine • ISSUE 25
CIVIL OR CRIMINAL?
AN AGE-OLD QUESTION IN A NEW ERA OF FRAUD Authored by: Sarah Gabriel (Partner) & David Fitzpatrick (Senior Associate) - Peters & Peters
Fraud is becoming ever more complex and frequent. It is the most prevalent crime in England and Wales, accounting for around 40% of all reported incidents. The use of cryptocurrencies and international networks have revolutionised the way in which fraudsters operate. The road to artificial intelligence may have been paved with good intentions, but this exponentially developing technology has arguably become fraudsters’ most valuable accomplice. In this new climate, the question of how best to pursue recovery is as pertinent as ever: should victims make a complaint to the authorities, or would they be better off pursuing a claim in the civil courts? How are these routes to recovery adapting to the new face of fraud, and what new factors do victims need to consider?
One of the first things that victims should consider when contemplating criminal proceedings is whether the fraud is something that is likely to interest the authorities. Given current strains on resourcing, it is only natural that larger or more high-profile cases, such as those involving organised crime or substantial financial loss, will catch the attention of enforcement agencies. This may go some way to explaining why current estimates are that only 14% of fraud cases are being reported to Report Fraud or the police.1
Even if criminal proceedings are brought, victims should be mindful that the criminal system provides a framework that is designed primarily to punish the offender rather than to provide for recovery. While compensation orders are sometimes made, they tend to feature in more straightforward cases, and securing a conviction is a prerequisite; by that point, fraudsters may already have dissipated assets, especially if a court could not be persuaded to make a restraint order to freeze those assets at the investigation stage. Resources are often spent instead on prevention: this is one of the key themes that emerges from the government’s latest three-year fraud strategy2 published in March, in which much ink is devoted to mechanisms to stop fraud at source while comparatively little attention is given to the issue of restitution.
1
CSEW (Crime Survey of England and Wales)
2
chromeextension://efaidnbmnnnibpcajpcglclefindmkaj/https://assets.publishing.service.gov.uk/media/69ae77ddc78869bf8eb8a509/fraud-strategy-web.pdf
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ThoughtLeaders4 FIRE Magazine • ISSUE 25
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recent years report freezing orders over digital assets, such as crypto wallets. The possibility of enforcing a civil judgment against assets in overseas jurisdictions should also not be underestimated, especially now that over two-thirds of fraud cases have an international element.4
That is not to say that the criminal route has been static on the recovery front. One welcome step is the introduction of section 303Z50 of the Proceeds of Crime Act 2002 (through the Economic Crime and Corporate Transparency Act 2023), which enables victims of cryptocurrency fraud to apply to a magistrates’ court for the return of seized crypto assets. Another is enforcement agencies’ use of civil recovery action. In one recent case, the SFO was able to reclaim funds directly for victims by bringing civil recovery proceedings on their behalf in the High Court3; in the absence of a conviction, those funds would ordinarily go to HM Treasury. Conversely, the fact that it took almost 24 years for the funds to find their way back to the victims’ pockets only emphasises the delays and other challenges that the criminal route can present. Victims with sufficient resources may seek to circumvent the difficulties associated with public criminal proceedings by bringing a private prosecution. While this route offers more control over the proceedings, private prosecutors have fewer powers than public prosecutors and need to be able to cooperate effectively with enforcement agencies. Their actions are also likely to be scrutinised more heavily than those of a claimant in civil proceedings. In most cases, victims seeking recovery will have significantly better prospects of achieving their goal through pursuing their own civil proceedings. This effectively puts them in the driving seat, where they can rely on a range of tools in the civil courts to locate and freeze assets and obtain disclosure from both fraudsters and third parties such as banks. These mechanisms can be deployed quickly, often before assets are dissipated widely, and they have proven to be well equipped for the modern age: a new spate of cases over 3 4 5
But the civil route is not a panacea, even when it comes to enforcement. In its report last year5, the Civil Justice Council’s working group on enforcement generally took a dim view of the effectiveness of CPR Part 71 The proposed introduction of a specialist enforcement court effectively offering a one-stop shop for enforcement
(including by retaining financial information about judgment debtors) is encouraging. The proposal belatedly to bring into effect sections 95 to 105 of Part 4 of the Tribunals, Courts and Enforcement Act 2007 (such that the court would be empowered to ask governmental bodies to provide information about judgment debtors and their assets) would also signal progress. This is all well and good for small-scale domestic disputes. However, it does not help with cross-border cases, which still rely on foreign courts. The working group specifically identified international cooperation as an area that requires further work.
Ultimately, while civil proceedings remain the obvious choice for victims seeking financial recovery, each case needs to be assessed on its own facts. Fraud is a game of cat and mouse, and fraudsters are constantly developing new ways to evade both detection and enforcement efforts. As this continues to play out at an unprecedented speed, the prospects of successful recovery, whether in civil or criminal proceedings, will depend heavily on efforts to keep pace with these developments.
And then there are costs. Third party funding may assist but it will impact on what the victim recovers. However funded, the chances of recovery need to be weighed against potentially high costs. There is no point in obtaining a judgment without a clear route to enforcement. There remains a third way: a combination of both criminal (whether publicly or privately prosecuted) and civil proceedings. This can present opportunities to work closely with prosecuting authorities both to help secure a favourable judgment and implement an effective enforcement strategy. However, this dual route introduces a raft of new considerations, such as a risk that the defendant will apply to stay the civil proceedings to allow the criminal proceedings to take their course, questions over whether evidence obtained in one set of proceedings can be used in the other and thorny issues of privilege.
SFO returns £400,000 to victims of global email fraud - GOV.UK Fraud Strategy 2026-2029, paragraph 29 https://www.judiciary.uk/wp-content/uploads/2025/04/CJC-Report-on-Civil-Enforcement-April-2025.pdf
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ThoughtLeaders4 FIRE Magazine • ISSUE 25
60 SECONDS WITH... RICHARD GREENBERG BARRISTER
TWENTY ESSEX
hat do you like most W about your job? ven more than the E interesting cases, it is the interesting people I meet along the way. Here I don’t have in mind the cast of characters one encounters in the course of fraud litigation, though they do add a certain amount of colour. We are fortunate in this profession to be surrounded, for the most part, by brilliant and intelligent people. That is the best part of the job. The drama of being in Court comes a close second.
hat motivates you W most about your work? roviding for my three little P girls.
hat is the best film of W all time? itzcarraldo, No Country for F Old Men, or Terminator 2, depending on mood.
here has been your W favourite holiday destination and why?
hat would you be W doing if you weren’t in this profession?
atmos. The Greek islands P are hard to beat. This one is particularly beautiful, with a rich history. You can visit the cave where Saint John wrote the Book of Revelation. The food is excellent. I remember distinctly the grilled octopus I had on the beach. And it was in Patmos that I made the momentous discovery of my favourite cake (portokalopita or ‘orange pie’), which is now an annual birthday tradition.
ull-time dad (which would F admittedly be a million times harder than my current job).
hat personality trait W has contributed most to your success? I try to be a team player. It seems to me that this quality, more than any other, drives successful outcomes in any particular case, and builds relationships that endure beyond the particular case.
hat is the one thing W you could not live without?
I f you could have dinner with any historical legal figure, who would you choose? he best dinner T conversation tends not to be legal, so I’d choose a lawyer who is remembered primarily for his other achievements. James Boswell, the author of the greatest biography in the English (and probably any) language, The Life of Samuel Johnson, would be my choice. He is a master of the ‘war story’. His great friend and subject had quite a lot to say about the law (which is the subject of an excellent little book by Tom Bingham) so legal matters would occupy us for some – but importantly not the entirety – of the evening.
xercise. For the mind as E much as the body. 28
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ThoughtLeaders4 FIRE Magazine • ISSUE 25
BVI SHAREHOLDER DISPUTES
DEADLOCK, LOSS OF TRUST AND BUY-OUT OFFERS Authored by: Scott Cruickshank (Partner), Catriona Hunter (Registered Foreign Lawyer) & Daniel Leveson (Associate) - HFW The BVI Court’s decision in Jin Yao Holdings Ltd v Forever Winner Intl et al examines the options open to shareholders in a “deadlock” situation where trust and confidence between shareholders has been eroded and offers guidance on the factors to consider when making a buy-out offer in order to avoid the company being wound up on just and equitable grounds. The judgment also examines the thresholds which must be met in order for the Court to grant a strike-out application or appoint provisional liquidators.
Hong Kong Stock Exchange (the SPHL Shares). At one time, Mr Yao and Mr Wang were both directors of SPHL but Mr Yao resigned in January 2025. The relationship between Mr Yao and Mr Wang broke down, which led to proceedings before the BVI Commercial Court (Court) seeking to wind up the Company on just and equitable grounds under the BVI Insolvency Act 2003 (Act).
•
•
•
J in Yao Holdings Ltd, a company owned and controlled by Mr. Yao, holds 50% of the Company’s shares. he other 50% are held by Sino T Century Holdings Limited, a company owned and controlled by Mr. Wang. r Yao and Mr Wang are the M directors of the Company.
The Company holds 49.06% of the shares in Strong Petrochemical Holdings Limited (SPHL), a company incorporated in the Cayman Islands and listed on the Main Board of the
• financial wrongdoing in relation to SPHL; • sending letters to SPHL’s banks which lead to SPHL’s bank accounts being frozen; and • colluding with another SPHL shareholder to take control of SPHL by removing all of SPHL’s directors, except Mr Wang. In short, Mr Wang accused Mr Yao of:
Background Jin Yao Holdings v Forever Winner1 concerns a dispute over a company incorporated in the BVI, Forever Winner International Ltd (Company), which was incorporated by two individuals, Mr Yao Guoliang (Mr Yao) and Mr Wang Jiansheng (Mr Wang), as an assetholding quasi-partnership.
• causing SPHL’s share price to drop significantly by petitioning to wind up SPHL;
The Breakdown in the Shareholders’ Relationship The breakdown in Mr Yao and Mr Wang’s relationship involved allegations of serious misconduct on both sides, with each party accusing the other of actions that undermined the functioning of the Company and of SPHL. Amongst other things, Mr Yao accused Mr Wang of: • secretly removing Mr Yao as a director of the Company; • denying Mr Yao access to Company information; •
delaying dividend payments;
• unreasonably refusing a reasonable offer by Mr Wang to purchase Mr Yao’s shares in the Company (the Buy-out Offer); • attempting to misappropriate SPHL’s assets; and • filing the Application in an effort to retain control of SPHL, against the wishes of SPHL’s other shareholders. It was accepted by both parties that the Company was “deadlocked”
(i.e. the shareholders are unable to co-operate in the management of the company’s affairs, the company cannot function at board / shareholder level and the company is, in short, “paralysed”2).
1
Jin Yao Holdings Ltd v (1) Forever Winner International Ltd and (2) Sino Century Holdings Limited BVIHC(COM) 0641 of 2024 (Jin Yao Holdings v Forever Winner)
2
See paragraph [18] of Jin Yao Holdings v Forever Winner, which cites Chu v Lau [2020] UKPC 24 at [14] (Chu v Lau).
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ThoughtLeaders4 FIRE Magazine • ISSUE 25
The Dispute Before the BVI Court Mr Yao, through his company Jin Yao Holdings Ltd, applied to wind up the Company on just and equitable grounds under section 162(1)(b) of the Act (Application). Separately, Mr Yao applied for the appointment of joint provisional liquidators (JPLs) under section 170(4) (b)(i) of the Act in order to preserve the Company’s main asset, its substantial shareholding in SPHL (and dividends payable to the Company in respect of the SPHL Shares), and to prevent Mr Wang from exercising unilateral control over the SPHL Shares, pending resolution of the Application (JPLs Application). Mr Wang applied to strike-out the Application and JPLs Application, arguing that Mr Yao had unreasonably refused the Buy-out Offer because (in Mr Wang’s view) the Offer would give Mr Yao “all that he could reasonably hope to receive”3 should the Company be wound up and that Mr Yao had therefore failed to pursue other potential remedies. On that basis (the availability of an alternative remedy), Mr Wang contended that permitting the Petition to proceed would be an abuse of process4.
Legal Issues to be Determined This dispute raised several interrelated legal issues: 1. Was it just and equitable under section 162(1)(b) of the Act to wind up the Company, given that the relationship between Mr Yao and Mr Wang, two equal shareholders in a quasi-partnership corporate structure, had broken down and the company was in “deadlock”? The leading BVI law authority on just and equitable winding-up is the decision of the Judicial Committee of the Privy Council (Privy Council) in Chu v Lau, in which the Privy Council confirmed that a company operating as a quasipartnership may be wound up on just and equitable grounds where: (a) there is a functional deadlock and / or (b) an irretrievable breakdown in trust and confidence between the shareholders. 2. Could the Application survive analysis under section 167(3) of the Act? Section 167(3) requires the Court to refuse to grant a just and equitable
winding up Application if: (a) another remedy is available to the applicant; and (b) the applicant is acting unreasonably in seeking liquidation rather than pursuing that alternative. The issue here was therefore whether Mr. Wang’s buy-out offer constituted such a remedy and, if so, whether Mr. Yao’s refusal to accept it was unreasonable. 3. Should the winding-up Application be struck out as an abuse of process? Was it unreasonable for Mr Yao to persist with the Application because it was “clear and obvious”5 that he ought to have accepted Mr Wang’s offer to buy his shares in the Company? In the circumstances, should the Court strike-out the Application at this preliminary stage? 4. Should JPLs be appointed to preserve the Company’s assets?
Key Findings • The Court found that Mr Yao and Mr Wang’s relationship had broken down irretrievably and that the Company, which was characterised as a “quasi-partnership”, was in a state of functional deadlock. • The Court dismissed Mr Wang’s strike-out application on the basis that Mr Wang had not demonstrated that the petition was “manifestly unarguable” or an abuse of process: • The offer was marked “subject to contract“, lacked key protections and was not capable of immediate acceptance. It also failed to address Mr Yao’s allegations of misconduct affecting the value of the shares. The Court therefore held that Mr Wang’s offer to purchase Mr Yao’s shares (which formed the basis of the strikeout application) was inadequate. • As such, Mr Yao’s refusal of the offer was not unreasonable and the test set out in section 167(3) of the Act was not satisfied. • The Court found that while there were governance concerns, there was no immediate threat to the Company’s assets and, as such, Mr Yao had failed to establish that the appointment of provisional liquidators, which is a form of exceptional relief which courts will be “very reluctant“6 to grant, was justified. Accordingly, Mr Wang’s application to strike-out application and Mr Yao’s application to appoint provisional liquidators over the Company were dismissed and Mr. Yao’s application to wind up the Company on just and equitable grounds will now proceed to trial.
Commentary Appointment of provisional liquidators – only in exceptional cases: Even where corporate governance issues are present, the Court will not appoint provisional liquidators lightly. The appointment of provisional liquidators involves significant expense and reputational issues, plus the risk of injustice being suffered by the other parties. There must be compelling evidence of imminent risk to assets or other urgent justifications in order for the Court to take this significant step. Just and equitable winding-up – deadlock and loss of trust: In quasipartnerships, where equal shareholders can no longer cooperate and mutual trust has broken down, the Court will be prepared to hear an application to wind up a company, whether or not the company is solvent. Strike-out applications – a high threshold: The Court will only strike-out a shareholder application as an abuse of process for failure to accept a buy-out offer where it is “clear and obvious” that the offer met specific standards (outlined below) and should have been accepted. Buy-out offers must be carefully structured: A buy-out offer which is an adequate “alternative remedy” to just and equitable winding up must be: • Unconditional and capable of immediate acceptance. • Supported by a clearly defined and fair valuation process. •
easonable in timing, payment R terms and scope.
• Respond to any alleged misconduct affecting share value. •
ree from procedural uncertainty F (i.e. the offer should not be “subject to contract”; it should not be a mere offer to negotiate).
Shareholder disputes often involve a series of competing applications and tactical moves, some of which aim to delay the proceedings or “muddy the waters” to distract from the real issues in dispute. As this case shows, the BVI Court will focus on the substance of the parties’ dispute and the applicable law, scrutinising buy-out offers closely. As a result, a buy-out offer which lacks substance is an expensive stalling tactic at best.
3 Jin Yao Holdings v Forever Winner at paragraph [24] 4 Relying on rule 11.15 of the Eastern Caribbean Supreme Court (ECSC) Civil Procedure Rules (CPR) (as applied to BVI insolvency proceedings by rule 4 of the BVI Insolvency Rules 2005), which entitles the Court to strike out a statement of case (or part of) if the case (or part) is an abuse of process. 5 Jin Yao Holdings v Forever Winner, paragraph [34] 6 Jin Yao Holdings v Forever Winner, paragraph [89] citing paragraph 8-42 of Hollington on Shareholders’ Rights 10th Edn, Ed Robin Hollington KC, 2023, Sweet and Maxwell
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ThoughtLeaders4 FIRE Magazine • ISSUE 25
| Europe |
WINNING THE WORK IS ONLY THE BEGINNING RETHINKING GROWTH IN FRAUD AND ASSET RECOVERY
Authored by: Lucy Burrows (Senior Talent Consultant) - ABC Legal Talent Fraud and asset recovery practices are busy, but that does not always translate into consistent growth. Matters are larger, more complex and often crossborder, with more people involved and tighter timeframes than was previously the case. At a headline level, there is no shortage of work. Firms and sets are regularly involved in high value, high profile matters, often coming in at speed and requiring an immediate response. The more interesting question, in my view, is where that work is actually coming from, and how consistent it really is over time.
What is becoming clearer is the extent to which this market is network driven. Instructions rarely arrive through formal processes alone. Instead, they tend to come through relationships between lawyers, counsel, investigators, forensic accountants and funders, often via referral networks that are not always visible from the outside. For both firms and chambers, being part of that network is critical. The strongest practices tend to be those that are well connected, not just at an individual level but more broadly. That is less about formal processes and more about
being known, trusted and consistently involved in the right conversations. Whilst that model has always existed in this space, what feels more pronounced now is the pace at which those relationships translate into work, and the scale of the matters that follow. The consequence is that growth does not build in a steady or predictable way. In my view, it tends to arrive in waves. A single instruction can generate a significant amount of work for a period of time, before things settle again. That is true whether you are looking at a disputes team within a firm or a set of chambers with a number of members working in the same area. From the outside, that can look like sustained growth. In practice, it is often a series of strong mandates rather than a fully repeatable pipeline. There is nothing inherently problematic about that. It is, to a large extent, the nature of fraud and asset recovery work. Instructions are driven by events, the discovery of an issue, the need to act quickly, or the escalation of a dispute, and that is unlikely to change.
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ThoughtLeaders4 FIRE Magazine • ISSUE 25
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on its own is not always enough to sustain a practice over the longer term. That, in turn, has implications for how the work is delivered once it arrives.
What is becoming more apparent, however, is a shift in how some practices are thinking about this. There is a growing focus on how to create a degree of consistency around what is, by definition, an inconsistent flow of work. In practical terms, that often comes back to how relationships are managed. Rather than relying solely on individual connections, there is more attention being given to how those networks are maintained over time and how they extend beyond any one person. For chambers, that can mean a more deliberate approach to how work is shared and how relationships are supported across members. For firms, it can involve a similar shift towards embedding those connections more broadly within the team. None of this removes the opportunistic nature of the work, nor should it. Some of the best matters will always come in that way. The difference is that there is a clearer recognition that opportunism
Fraud and asset recovery matters are often urgent, high stakes and require careful handling. It is entirely understandable that senior lawyers and leading counsel remain closely involved. At the same time, what I am seeing is that this can lead to a relatively small number of individuals carrying a significant proportion of the responsibility, particularly at key points in a matter. Around that, teams and sets can be relatively lean. The gap between senior and junior levels can feel quite pronounced, particularly when matters are moving quickly. The practices that seem to manage this most effectively are those that are able to create a bit more depth without losing control. In my view, that tends to come from relatively straightforward things done consistently, clearer delegation, earlier exposure for mid-level lawyers, and a willingness to trust people with responsibility before everything feels completely comfortable. The connection between the two points is important. Where the flow of work is uneven, the ability to absorb that pressure becomes critical. Without the right structure around it, even strong pipelines can feel difficult to sustain.
None of this is about changing the nature of fraud and asset recovery work. The unpredictability is part of what makes it interesting, and in many cases where the best work comes from. What is changing is the context. The pace is faster, the matters are more complex, and expectations, from clients and within teams, are higher. Winning the work remains essential, and in a market that is increasingly network driven, it is something that requires ongoing focus rather than a one-off effort.
But increasingly, what determines long term success is what happens next, how that work is embedded, supported and built on over time.
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Regulatory investigations, large-scale commercial disputes involving corporate wrongdoing, reputational issues, corporate liability and multi-jurisdictional enforcement. Asset recovery, internal investigations and compliance. Discreet, bespoke and expert legal representation for corporates, senior business individuals and professionals in London, the UK and worldwide.
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ThoughtLeaders4 FIRE Magazine • ISSUE 25
OPERATION ATLANTIC
DEVISED TO TACKLE CRYPTO-RELATED FRAUD Authored by: Syedur Rahman (Partner) - Rahman Ravelli Syed Rahman of Rahman Ravelli outlines the three-nation approach to crypto crime. Law enforcement agencies from the UK, US and Canada have teamed up to create Operation Atlantic in an effort to combat crypto fraud and the illicit movement of wealth.
Operation Atlantic was announced by the UK’s National Crime Agency (NCA). The NCA will work on it with the UK’s City of London Police and Financial Conduct Authority (FCA), the United States’ Secret Service agency and Attorney’s Office for the District of Columbia, and Canada’s Ontario Provincial Police, Ontario Securities Commission and Royal Canadian Mounted Police. The initiative aims to disrupt cryptorelated scams, take apart fraud networks, reclaim stolen wealth, help protect against further losses and increase public awareness of crypto investment fraud. It will provide support to cross-border operations that aim to target illegal conduct involving digital assets.
Operation Atlantic will also target people who have lost or are in danger of losing wealth via approval phishing, which is also known as pig butchering. This is where fraudsters either persuade victims to give them access to their crypto wallet under false pretences or gain access without the owner realising. The US Secret Service has said that Operation Atlantic expands upon Project Atlas, which is an initiative started two years ago by the agency and the Ontario Provincial Police to disrupt crypto investment fraud. The Secret Service added that Operation Atlantic strengthens cross-border enforcement activities by adding more international partners than Project Atlas obtained.
has been fairly successful and has shown that a coordinated approach can produce real results. And the crossborder structure of the new initiative is significant in that it aims to combat the most difficult issue with crypto fraud – that fraudsters operate across borders and can quickly dissipate assets away from jurisdictions. But while this initiative may prove to be effective, it may be unrealistic to expect huge immediate results. For one reason, many of the fraudsters and organised crime rings that utilise crypto as a vehicle for fraud are located in Southeast Asia, including Myanmar, Cambodia and Laos. In such poor countries, crypto fraud can actually be one of the dominant economic engines. As such, real and effective political cooperation may be difficult to attain. UK legislation would have no reach in such countries, so any impact would be limited. Although more cross-border initiatives and data sharing frameworks could be agreed. Alternatively, the crypto industry could be more heavily regulated to stop stolen funds from leaving the UK in the first place. Yet, achieving this - given that borderless and immediate transfers are the very nature of crypto – would be a sizeable task.
Effective The question of how effective this new approach could be is, arguably, far from simple to answer. Project Atlas
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ThoughtLeaders4 FIRE Magazine • ISSUE 25
60 SECONDS WITH... LUCY BURROWS SENIOR TALENT CONSULTANT
ABC LEGAL TALENT
hat’s one shift in fraud, W insolvency or asset recovery work that you’re seeing at the moment? he pace and complexity of T matters. There is significantly more cross-border work, more stakeholders involved, and cases tend to move more quickly than before. It is something most people recognise, but in practice it can be difficult for team structures to keep pace with that consistently over time, particularly when matters are both complex and time critical. hat tends to separate the W teams that perform consistently from those that don’t? he teams that perform well T over time tend to have greater clarity and trust in how work is managed. Responsibility is not concentrated in one or two individuals over time. Instead, there is more effective delegation, and lawyers at different levels are given meaningful responsibility earlier in their careers. Where do you see the biggest strain within teams at the moment? id-level lawyers, without M question. They are often expected to take on significant responsibility in complex matters
at a relatively early stage, while still developing their experience. That gap can create considerable pressure, particularly when matters are moving quickly. What do you think helps lawyers build a practice that lasts? I n my experience, it comes down to a combination of consistency and environment. The lawyers who build lasting practices tend to be those who develop strong relationships over time, rather than relying on one-off opportunities or individual mandates. Just as importantly, they are usually in environments where they are given the space to grow, take responsibility, and build their own profile gradually. ow has business H development in these practice areas changed in recent years? It has become much more relationship driven, rather than reliant on formal processes. A significant proportion of work now comes through networks involving other lawyers, funders, forensic accountants and investigators, rather than through more traditional business development channels. The firms that perform well tend to be those that are well embedded within that wider ecosystem.
hat does a genuinely W strong culture look like in a high performing disputes team? t its best, it is relatively A straightforward. There is clarity around expectations, a level of trust in how work is carried out and a willingness to support one another, particularly when matters are moving quickly or under pressure. It does not need to be complex, but it does need to be consistent. How would clients and candidates typically describe you? I would hope they would say that I am straightforward and pragmatic. I tend to be clear about what I am seeing in the market, but also conscious of the wider context people are operating in. My approach is to understand how the market works in practice and help people navigate it in a way that works in practice.
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ThoughtLeaders4 FIRE Magazine • ISSUE 25
INTERPOL ISSUES STARK WARNING
ABOUT INCREASINGLY SOPHISTICATED GLOBAL FRAUD Authored by: Niall Hearty (Partner) - Rahman Ravelli Niall Hearty of Rahman Ravelli outlines the concerns voiced by the international police organisation. Interpol has warned that financial fraud is now one of the world’s most dangerous and rapidly-evolving crossborder crimes.
Its 2026 Global Financial Fraud Threat Assessment says that increased global criminal collaboration means that fraud is now at the centre of organised crime activity that also includes human trafficking and cybercrime. The Assessment states that: •
raud that utilises AI is 4.5 times F more profitable than traditional methods of fraud. AI systems can now plan and carry out all stages of a fraud campaign.
•
extortion is being systematically S integrated into scams such as romance and investment fraud, often using scripts and AI-generated content.
•
riminal networks are now working C closer with specialised money laundering groups and sharing expertise and technology to enhance their worldwide operations.
•
errorist groups in parts of Africa T are using fraud schemes, especially cryptocurrency-based scams, to raise funding.
•
cam centres are now a worldwide S problem involving hundreds of thousands of individuals, many of whom have been trafficked and forced to carry out online fraud.
But the report does highlight some positive developments. It states that law enforcement authorities are collaborating more effectively. Since 2024, the number of fraud-related Interpol notices and diffusions – by which it issues international alerts and requests for cooperation – has increased by 54 per cent. In the same period, Interpol supported member countries in more than 1,500 transnational fraud cases involving assets totalling US $1.1 billion.
Interpol has launched Operation Shadow Storm, a new international task force funded by the United Kingdom’s Home Office, as part of a unified, data-driven response to the international threat posed by fraud. It is also issuing guidelines on how countries can strengthen and coordinate their response to international fraud. The ability of criminals to find ways of exploiting cross-border weaknesses means that governments need to increase partnerships with each other and Interpol. A coordinated data-centric approach will hopefully stay abreast of evolving criminal enterprises and keep both the private and public sector safe from exploitation. As transnational fraud is evolving and becoming more sophisticated, companies and individuals also need to be more alert to the risk - reviewing their internal checks and compliances and ensuring the adoption of regulatory oversight where necessary.
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ThoughtLeaders4 FIRE Magazine • ISSUE 25
THE EVER-EVOLVING LANDSCAPE
OF AI, FRAUD & PRIVACY Authored by: Andrew Wilan (Partner) - Payne Hicks Beach Advances in AI have changed the nature of fraud and cybersecurity risk at both a corporate and individual level. As fraudsters and other bad actors increasingly look to leverage AI in order to scale, automate, and sophisticate their nefarious operations, we are entering a new era of AI-powered fraud that is harder to detect, faster to execute and exponentially broader in scope.
quantum computing will make this landscape even more complex—and the need for sophisticated understanding of the legal issues both in preparatory terms and in the event of crisis is as important as ever.
Clearly, lawyers can no longer view AI as simply a technical issue for clients, a policy challenge for regulators, or a curiosity for innovation teams: the opportunities and threats brought about by the advent of AI are now very real and increasingly relevant to legal advice across a number of practice areas. The latest AI developments such as Anthropic’s Claude Mythos already point to a radically altered fraud and privacy landscape that is likely to affect all of us in the near future. The anticipated convergence with a revolution in
AI-Powered Fraud Recent developments in AI‑powered fraud mark a decisive shift from opportunistic cybercrime to highly targeted, scalable commercial risk.
Advanced generative and agentic AI systems are now capable of analysing corporate structures, financial controls and human behaviour in real-time, enabling tailored scams that mimic trusted counterparties, exploit process weaknesses and evade traditional detection tools. Anthropic’s Claude Mythos AI tool demonstrates that AI has the capability of identifying systemic weaknesses at a level previously reserved for elite human specialists. For businesses, this translates into heightened exposure across all areas of operation: from authorised push payment fraud to procurement fraud. Other common tactics include manipulation of automated decision‑making systems and the exploitation of previously unknown software vulnerabilities. The commercial risk presents itself not merely in pure financial terms but disruption, regulatory scrutiny and reputational damage, especially where systems are judged inadequate.
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ThoughtLeaders4 FIRE Magazine • ISSUE 25 Businesses are not the only ones facing increased threat levels; individuals also face an array of risks in terms of their reputation, privacy and data. AI‑driven fraud increasingly relies on the aggregation and inference of personal data – often drawn from fragmented, entirely lawful and often public sources – to build accurate profiles that enable impersonation, coercion or identity theft. This comprehensive trawling of the cybersphere can also be deployed by bad actors in the context of malicious smear campaigns attacking the reputation, privacy and peace of mind of individuals, including those who have fallen foul of rogue nation states who themselves have access to powerful AI models. More alarmingly still, specialised AI models and tools are designed to crawl websites ordinarily hidden from public view, bypass language barriers, and identify vulnerabilities, allowing users to turn the ordinarily unstructured data of the dark web into actionable intelligence. This poses enormous risk to individuals who have suffered historic breaches of their personal data and whose highly sensitive, private and confidential information may – whether known to them or not – be accessible to sophisticated AI tools. The threat of this information being used against them to blackmail, coerce or harass is plain to see.
Preparing for the Worst Whilst safeguarding against these risks in an AI-dominated world is without doubt going to be a major challenge for years to come, there are steps that both businesses and individuals can take to reduce their exposure.
Businesses can mitigate the risk of AI‑powered fraud, first and foremost, by treating it as a governance issue that affects the resilience of their operations as a whole rather than a narrow technology threat. At a minimum, this requires updating internal policies to reflect how advanced AI can be misused, including clear rules on AI deployment, third party software and decision‑making authority where automated systems are involved. Fraud prevention frameworks should be reviewed as should the training of members of staff. All of these steps are likely to be highly significant should it come to any allegation of professional negligence or regulatory intervention in circumstances where there has been a cyber breach of any sort. There are various preparatory steps that businesses can take, from stresstesting incident response plans for AI‑related scenarios and carrying out comprehensive audits of latent digital vulnerabilities. Legal, cyber‑security, data protection and crisis‑management specialists should be engaged in advance, not for the first time during an incident, so that advice is coordinated and decisions can be made quickly under pressure. In an environment where AI reduces reaction time and increases impact, preparation and trusted guidance are now essential commercial safeguards. Likewise, individuals – particularly those who have a public profile – should seek guidance as to their own specific vulnerabilities and should consider engaging forensic investigators to carry out an analysis of the data personal to them that may be liable to cause them harm. This can be valuable in terms of informing legal steps that could be taken to reduce threat levels such as engaging with third parties to ensure the removal of data from the internet or to obtain disclosure orders to ascertain the scope of any wrongdoing and the identity of those responsible. It can also allow individuals to prepare for the leak of sensitive information and engage with legal, cyber and PR advisors so as to pre-empt and better deal with the fallout from any particular vulnerability.
What Next? The evolving capabilities of AI bring with them unique challenges; we are living in extraordinary times that present both huge opportunities and unprecedented risk from a cyber perspective. It is fair to assume that the roller-coaster is only just getting going and, with the inevitable advent of yet more sophisticated tools not to mention the emerging deployment of quantum computing (and the effect that will have, in particular, on the adequacy of existing levels of encryption), the coming years will present significant challenges to both clients and advisors alike. For the moment, it is critical that both businesses and individuals take steps to assess potential risks and vulnerabilities and be as ready as possible for that critical moment when AI-related cyber issues come knocking on their door.
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ThoughtLeaders4 FIRE Magazine • ISSUE 25
RE ESKEN LTD [2026]
A QUIET SHIFT IN CROSS BORDER INSOLVENCY STRATEGY Authored by: Jaavonne Taylor (Senior Associate) & Charlotte Miles-Griffiths (Associate) - Collas Crill Cross-border insolvency doesn’t often announce itself with fireworks. Instead, it tends to evolve through careful judicial nudges that, taken together, reshape how practitioners think about jurisdiction, strategy, and risk. Re Esken Ltd [2026] EWHC 495 (Ch) Esken’) is one such decision confirming this. At first glance, the decision appears technical: a question of statutory interpretation concerning whether a Guernsey-incorporated company could validly move from administration into a creditors’ voluntary liquidation (‘CVL’) under the English Insolvency Act, 1986. But beneath that surface lies something more significant. The case offers succinct and valuable insight into the process concerning how the English court approaches overseas companies whose centre of main interests (‘COMI’) sits firmly in England. For restructuring and insolvency professionals operating across jurisdictions, the message is both reassuring and quietly powerful.
The Facts Esken was incorporated in Guernsey but had its COMI in England. It entered administration in England and upon realisation of its assets thereafter, the administrators sought to transition the company to a CVL by filing a notice with the Registrar pursuant to Rule 21.4 of the Insolvency (England and Wales) Rules 2016 seeking the court’s confirmation of the creditors’ voluntary winding up of Esken. The issue for determination by the court was whether Esken could move from administration to CVL in circumstances where it was incorporated outside of the United Kingdom. The court
had to consider whether Esken was considered an unregistered company as its registered office was outside of the United Kingdom, and if so whether section 221(4) of the Act applied. Section 221(4) provides that ‘No unregistered company shall be wound up under this Act voluntarily, except in accordance with the European Union Regulation.’ The question was therefore deceptively simple: did that provision prevent Esken, as a non-UK incorporated entity, from entering a CVL via the Schedule B1 route?
The Court’s Answer: Clean Separation The High Court held that it did not. Judge Burton concluded that Part V of the Insolvency Act (dealing with unregistered companies) does not overlap with, duplicate, or restrict the operation of Schedule B1. In other words, the statutory regimes operate in parallel rather than in conflict.
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ThoughtLeaders4 FIRE Magazine • ISSUE 25 This meant that Esken could validly enter CVL when the administrators filed the requisite notice and it was registered.
•
The reasoning is notable for its clarity. Rather than attempting to reconcile competing provisions through strained interpretation, the court drew a firm line: Part V simply does not apply to the administration-to-CVL transition under Schedule B1 in this context.
• Without needing to navigate conflicting statutory regimes.
The Court in making its determination relied on the definition of a company under paragraph 111(1a) (c) (a company not incorporated in an EEA State but having its centre of main interests in a member state other than Denmark) or in the United Kingdom.), to establish that Esken was permitted to enter CVL.
Why this Matters: COMI still Reigns The decision reinforces a central organising principle of cross border insolvency: COMI continues to anchor jurisdictional legitimacy. Even post-Brexit, and despite the waning direct influence of EU insolvency frameworks, the English court remains comfortable exercising jurisdiction over overseas companies once their economic reality is centred in England. Esken demonstrates that this jurisdiction is not merely theoretical or limited to rescue procedures. It extends seamlessly into liquidation pathways also. For practitioners, this reduces friction. Once an overseas company is properly within the English insolvency regime through administration, the route to CVL is not obstructed by technical arguments about its status as an ‘unregistered company’ under section 221(4).
dministration in England (based on A COMI)
• Followed by CVL under Schedule B1
For creditors, this translates into quicker realisations and fewer procedural hurdles. For officeholders, it provides confidence that the standard English toolkit remains available even in cross border scenarios.
The EU Regulation Question: A Fading Shadow? One of the more intriguing aspects of the case is the reference to the ‘European Union Regulation’ within section 221(4). In a post-Brexit landscape, the continued presence of EU-derived language in domestic legislation arguably creates interpretative tension. Esken sidesteps this tension by concluding that the provision is simply inapplicable once COMI in the UK is established. It is evident that English courts are not grappling with how EU concepts should impact domestic decisions but rather have adopted an increasingly focused and practical approach for determining commercial outcomes rather than being constrained by legacy statutory language whose original context has shifted.
A Practical Win for Administrators and Creditors From a commercial perspective, the decision avoids an outcome that would have been deeply impractical. Had the court found that section 221(4) blocked the transition, administrators of overseas companies would have been forced to consider alternative and potentially less efficient routes, such as compulsory winding-up proceedings or parallel processes in the jurisdiction of incorporation. That would have introduced delay, cost, and uncertainty, precisely what the insolvency law seeks to minimise. Instead, the court has endorsed a streamlined approach:
A Subtle but Important Jurisdictional Signal There is also a wider, strategic implication. It reinforces England’s position as a flexible and pragmatic forum for cross border restructurings and insolvencies, by confirming that overseas companies with an English COMI can move through the full lifecycle of insolvency procedures within the English system. This bolsters reliability and strengthens certainty which is currency in the restructuring world.
For lenders and investors, the ability to rely on a single, coherent process, rather than fragmented multi-jurisdictional proceedings is a significant advantage. It informs structuring decisions long before any distress arises.
Guernsey, Jersey and the Offshore Perspective. For offshore financial centres, the case is significant. It highlights the reality that companies incorporated offshore but operationally centred in England may find themselves fully subject to English insolvency processes. This is not new, but Esken sharpens the point by confirming that even the transition into liquidation can occur without recourse to local windingup procedures. That raises important considerations for: •
corporate structuring;
•
ay-to-day corporate decision d making; and
•
choice of governing law.
It also underscores the importance of early advice. Understanding where a company’s COMI truly lies is no longer just an academic exercise; it is determinative of how and where insolvency processes will unfold.
Conclusion Esken may not be a headline-grabbing decision, but it is an influential one. It confirms that: •
t he English insolvency framework remains accessible to overseas companies with an English COMI;
•
t he transition from administration to CVL is not automatically obstructed by Part V of the Insolvency Act, if the company is incorporated outside of the United Kingdom; and
•
t he courts will prioritise coherent, commercially sensible outcomes over technical barriers.
For practitioners, the takeaway is straightforward. The English regime continues to offer a flexible and reliable avenue for cross border insolvencies, even where the corporate shell sits elsewhere. In a world where structures are increasingly international but financial distress demands decisive local action, that clarity is invaluable.
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ThoughtLeaders4 FIRE Magazine • ISSUE 25
WHEN SANCTIONS LEAD TO CONFISCATION
UKRAINE’S APPROACH TO STATE RECOVERY OF ASSETS Authored by: Kateryna Gupalo (Partner) & Tetiana Bihun (Associate) - Arzinger Law Firm, Ukraine
Introduction Russia’s full-scale invasion of Ukraine in February 2022 confronted Ukraine’s government with an unprecedented legal challenge: what to do with assets belonging to individuals and entities that actively support an ongoing war of aggression, yet remain nominally protected as private property under domestic law? Ukraine’s answer was a legislative instrument that most Western jurisdictions have not attempted – converting an economic sanction into a judicially supervised mechanism for permanent, non-compensated asset forfeiture. In May 2022, the Ukrainian Parliament amended the Law of Ukraine “On Sanctions” (No. 2257-IX, in force 24 May 2022) to introduce a new type of sanction: the recovery of assets in favour of the state. Unlike a conventional freeze, which merely suspends the exercise of ownership rights, this measure results in the permanent transfer of ownership to the state, with proceeds channelled to
a dedicated war-damages fund. The High Anti-Corruption Court (‘HACC’) has exclusive jurisdiction over these proceedings, which are initiated by the Ministry of Justice of Ukraine. Almost four years on, the mechanism has generated a substantial body of case law, raised complex questions about beneficial ownership, thirdparty rights and due process, and delivered tangible financial results. For international practitioners advising clients with assets in Ukraine, or monitoring how post-conflict asset recovery might evolve elsewhere, the Ukrainian experience offers important practical lessons.
Legal Basis: From Freeze to Forfeiture The forfeiture mechanism sits at an unusual intersection of administrative law and sanctions policy. Proceedings are brought as administrative claims before the HACC under Article 283-1 of the Code of Administrative Proceedings, not as criminal proceedings.
This distinction carries significant consequences. First, the standard of proof is civil rather than criminal: on the balance of probabilities, not beyond a reasonable doubt. The legislation does not precisely define this civil standard, and judges of the HACC have applied it inconsistently, particularly in cases where defendants do not appear1. Second, the proceedings are explicitly classified as non-criminal. The HACC has confirmed in the Rotenberg2 and related cases that forfeiture under the Sanctions Law is not a “criminal charge” within the meaning of Article 6 of the European Convention on Human Rights. The mechanism is characterised as political-economic in nature, aimed at changing the behaviour of
“persons whose will may affect and/or affects the political decision-making to end the armed aggression.”
1 Institute of Legislative Ideas, Analysis of the High Anti-Corruption Court’s Case Law Concerning the Application of Sanction in the Form of Asset Forfeiture – Summary, January 2025. Available at: izi.institute 2
HACC, judgment of 20.03.2023, Case No. 991/1914/23. Available at: https://reyestr.court.gov.ua/Review/109643500
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ThoughtLeaders4 FIRE Magazine • ISSUE 25 Third, appeal is available to the HACC Appeals Chamber, but cassation review is not available for this category of case. Attempts to lodge cassation complaints with the Supreme Court have been consistently rejected.
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haritable donations or gratuitous C transfers of assets of UAH 750,000 or more.
•
I nvestment in Russian state bonds of UAH 3 million or more.
The two-step procedural sequence is as follows:
These quantitative criteria are not exhaustive — the law preserves broader evaluative grounds, including “substantial threat to national security” and “material assistance to aggression. The HACC has acknowledged that these are open-textured concepts and has not yet developed fully consistent criteria for their assessment. This gives the Ministry of Justice considerable latitude but also exposes decisions to challenge4.
1. Asset freeze: The National Security and Defence Council (NSDC) designates the person and freezes their assets; the President enacts the decision by decree. This step must predate the forfeiture claim and must have occurred after 24 May 2022. 2. Forfeiture proceedings: The Ministry of Justice files a claim before the HACC. The court has a statutory 30-day period to decide, though in practice this is routinely exceeded to allow full examination of complex evidentiary materials. A key practical limitation: assets frozen before 24 May 2022 cannot be subject to forfeiture under the amended law (Article 6 of the Sanctions Law). To overcome this, Ukrainian authorities have, in some cases, cancelled and re-imposed asset freezes on previously designated persons, triggering fresh eligibility. This practice has been accepted by the HACC but has attracted criticism as potentially stretching the constitutional prohibition on retrospective application of law.3
The Ministry of Justice must establish that the person either directly participated in, or substantially contributed to, Russia’s armed aggression. The law identifies three specific quantitative thresholds: •
ax payments to the Russian T budget exceeding UAH 40 million (legal entities) or UAH 3 million (individuals) over four consecutive tax quarters.
• Partial control only: Where the designated person’s control was established only as to certain assets within a wider portfolio, forfeiture was limited accordingly.8 • Debt instruments: Rights of claim under loans, mortgages and pledges have been included within the scope of assets subject to confiscation.9 Importantly, mere membership of a business group or general affiliation with the designated person is not sufficient. The HACC has declined to order forfeiture where the Ministry of Justice could not establish actual disposalequivalent control over a specific asset10.
Scope of Confiscable Assets: Following Control, Not Title Perhaps the most significant – and practically challenging – aspect of the Ukrainian mechanism is its expansive approach to asset identification. Forfeiture is available not only in respect of assets formally owned by the designated person, but also assets over which they may directly or indirectly exercise rights equivalent to disposal, whether through intermediaries or structures. In practice, the HACC has applied this principle across a wide range of ownership patterns, including: • Spousal assets held under a foreign holding company: The court found that control was maintained through an offshore structure notwithstanding the formal split of title.5
Grounds for Forfeiture: Who Qualifies?
| Europe |
• Assets registered in a spouse’s name with a pre-nuptial agreement, separate income or inheritance rights: The existence of a formal separation of title was not treated as conclusive.6 • Multi-layer foreign holding structures: Several cases have involved chains of two or more offshore entities between the designated person and the Ukrainian operating asset.7
Third-Party Rights: A Gap in the Framework The current framework provides limited protection for the rights of non-sanctioned third parties. Consider a corporate structure in which the designated person holds a controlling interest in Company A, which in turn owns 100% of Company B. A forfeiture decision directed at Company B’s assets does not formally strip the minority shareholders of Company A of their shares, but it may substantially destroy the economic value of those shares. Ukrainian law does not yet offer a comprehensive remedy for this scenario. The procedural rights of third parties in HACC forfeiture proceedings are limited: they may submit explanations to the court, but they have no right to file a written response to the Ministry of Justice’s claim (which may run to hundreds of pages).11 For practitioners acting for nonsanctioned investors in Ukrainian companies, this procedural asymmetry is a material concern. The absence of a dedicated compensation or exit
3 Institute of Legislative Ideas, see also analysis of retroactivity in HACC decisions 2022–2023. Available at: izi.institute 4 Institute of Legislative Ideas, ibid. See also: Transparency International Ukraine, Confiscation of (Pro-)Russian Assets for Ukraine’s Benefit, January 2026. Available at: ti-ukraine.org 5 HACC, judgment of 08.02.2024, Case No. 991/780/24. 6 HACC, judgment of 31.07.2023, Case No. 991/6040/23. 7 HACC, judgment of 26.01.2024, Case No. 991/8725/23; HACC Appeals Chamber, decision of 02.04.2024 in the same case. 8 HACC, judgment of 15.01.2026, Case No. 991/10090/25; HACC Appeals Chamber, decision of 13.03.2026 (published 16.03.2026) in the same case. 9 HACC, judgment of 04.09.2024 (Ministry of Justice v Russian businessman, his son and two other persons); HACC Appeals Chamber, decision of 10.12.2024 on appeal by Ethoder Investments Limited. 10 HACC, judgment of 15.01.2026, Case No. 991/10090/25; HACC Appeals Chamber, decision of 13.03.2026 (published 16.03.2026) in the same case. 11 Ilyashev & Partners, When Business Becomes a Target of the NSDC: Is it Possible to Appeal Sanctions to the ECHR?, October 2025. Available at: attorneys.ua
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| Europe |
ThoughtLeaders4 FIRE Magazine • ISSUE 25 mechanism for bona fide third parties will likely require legislative attention if the mechanism is to be reconciled with European Convention standards over the long term. One additional procedural nuance: challenging the underlying NSDC asset freeze (which is a precondition for forfeiture) before the Supreme Court does not stay the HACC forfeiture proceedings. The law and practice provide no clear answer to what should happen if, following a completed forfeiture, a court subsequently finds that the original freeze was unlawfully imposed.
Scale and Results The HACC has reported the forfeiture of 223 residential and non-residential properties, over 72 hectares of land, 1,889 vehicles, 130 corporate rights and securities, as well as aircraft, vessels, mineral resources valued at over UAH 2 billion, and cash of UAH 568 million, USD 236 million and EUR 923 388.12 Respondents have included highprofile Russian businessmen and their associates: Eduard Khudainatov, Alexei Shelkov, Igor Kesaev, Evgeny Giner, Mikhail Shelkov, and others with interests in industrial, energy, logistics, financial and corporate assets connected to the Russian economy.
From Court Order to Cash: the Realisation Challenge Obtaining a forfeiture order is only the first stage. The subsequent transfer and sale of assets has proved considerably more complex. Following a final HACC decision, assets pass to the State Property Fund of Ukraine (SPFU) for sale at public auction, with proceeds directed to the Fund for the Liquidation of the Consequences of Armed Aggression within the state budget. In 2025, UAH 4.51 billion was transferred to this fund from sanctioned assets (compared with UAH 809.75 million in 2024), though the bulk of this figure represents assets transferred in kind rather than sale proceeds. Of 1,487 assets transferred to state management and connected with 92 sanctioned groups and individuals (as of early 2026), only a small fraction has been sold. The gap between forfeited and realised assets reflects several structural problems: 12 13
• Legally complex assets: many assets carry encumbrances, corporate disputes or overlapping claims. • Occupied territory: assets located in temporarily occupied regions cannot be physically accessed or auctioned. • ARMA-to-SPFU handover delays: the Asset Recovery and Management Agency (ARMA), which manages seized assets pending forfeiture, has experienced delays in transferring confiscated assets to the SPFU. The case of Vinnytsiapobutkhim is illustrative: seized in July 2022, confiscated by the HACC in July 2024, and transferred to the SPFU for sale only in April 2025.13
defendant notification, third-party rights and the pace of asset realisation remain live issues. As Ukraine prepares for post-war reconstruction and potential EU accession, aligning the mechanism more closely with ECHR standards will be necessary. For the broader community, Ukraine’s experience provides a real-time case study in the practical and legal limits of sanctions as an asset recovery tool – and a template, however imperfect, for what is possible when political will, legislative creativity and judicial capacity align.
• Regulatory coordination gaps: the new ARMA reform law (2025) introduces mandatory contract termination on the day an asset is accepted by the SPFU, aimed at preventing future delays, but implementing regulations were still being finalised as of late 2025.
Conclusion Ukraine’s sanctions-based asset forfeiture mechanism represents one of the most operationally advanced attempts to convert geopolitical sanctions into a tool of state revenue recovery during active conflict. It has required a dedicated procedural regime and new institutional infrastructure. The results, both legally and financially, are substantial. The mechanism is not without its challenges. Questions around retroactivity, the standard of proof,
HACC Judge Kateryna Sikora, public lecture at Taras Shevchenko National University of Kyiv, cited in HACC press release. Available at: first.vaks.gov.ua Transparency International Ukraine, How Sanctioned Assets Will Be Managed Under the New ARMA Law, October 2025. Available at: ti-ukraine.org
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| Europe |
ThoughtLeaders4 FIRE Magazine • ISSUE 25
“CAN YOU TRUST AN OFFSHORE TRUST?”
Authored by: Neal H. Levin (Partner) - Rimon Law Offshore trusts still fascinate fraud busters, litigators, insolvency practitioners and private client advisers in equal measure. For some, they are the ultimate asset protection tool; for others, they are little more than an elaborate delay tactic dressed up in glossy marketing. As a panelist at a recent joint IBA Asset Recovery Committee and Litigation Committee session in Toronto, I came away with one overriding conclusion; once a live dispute arises, trust structures are only as credible as the facts, the documents and, mostly, the people behind them. In this piece, I draw on that highly charged 90-minute panel, moderated by Helen Wang (Carey Olsen, Singapore) and Derek Adler (Hughes Hubbard & Reed, New York), with sharp contributions from my fellow panelists Shaul Brazil (BCL Solicitors, London), Aurélie Conrad Hari (Bär & Karrer, Geneva), David Jandrasits (Schwarzler, Liechtenstein) and Bock Eng Sim (Wong Partnership, Singapore).
The Onshore Fight Over Offshore Structures I started from a place FIRE readers know well - what actually happens when beneficiaries or creditors try to enforce rights against an offshore trust in an onshore forum. Straight away you hit three pressure points: which court will assert jurisdiction, who has standing, and which law governs the trust and beneficiary rights. Even seemingly simple issues, like a beneficiary’s right to information, can become a trench war between international private law rules and the governing law of the trust deed.
From my perspective, those early skirmishes are where delay and leverage live. A judgment creditor, for example, can find themselves litigating not just against the debtor, but also the trustee, protector and a stack of underlying vehicles scattered across multiple time zones. A beneficiary who suspects mischief may have to chase relief abroad, with opaque procedures and limited visibility into what the trustee is really doing.
“No such thing as legitimate asset protection if you owe anyone money” 49
ThoughtLeaders4 FIRE Magazine • ISSUE 25 From the US side, I took an intentionally provocative line - if you already owe someone money, or can see a serious claim coming, there is no such thing as a legitimate “asset protection” plan. A transfer into an offshore trust at that stage is just Exhibit A in the fraudulent transfer case, and US courts are increasingly comfortable treating it that way. Across the pond, as Shaul Brazil explained, UK courts take a more calibrated but still skeptical stance. They tend to view offshore trusts through a critical lens, especially where the jurisdiction is known for being unfriendly to creditors and the conduct of the settlor and beneficiaries suggests concealment rather than genuine stewardship. What I find striking is that in both systems, the story around the trust, the timing of transfers, the level of control retained, the pattern of distributions, matters at least as much as the drafting.
Sham, Substance and Veil-Piercing A central theme for me was how onshore courts decide whether an offshore trust represents a real transfer of control or a sham. Aurélie Conrad Hari walked us through Swiss approaches to veil piercing and sham analysis, and I was struck by how closely they track what I see in US courts. Judges focus on how the structure operates in practice, not just how it is described in the deed. Red flags include the settlor’s de facto ability to direct investments or distributions, side understandings that contradict the documents, and trustees who behave like loyal agents rather than independent fiduciaries. When I look at these cases, I see the same functional approach repeating across jurisdictions. Once a court concludes that the trust is mainly façade, the protective “offshore” label loses much of its force and remedies such as attachment, constructive trusts and tracing become viable again. My takeaway is simple - if it walks and talks like settlor-controlled property, no one should be surprised when a court treats it that way.
Making a Trust “Stick” Despite my own skepticism about asset protection rhetoric, I do not write off offshore trusts entirely. On the panel, I asked Bock Eng Sim and David Jandrasits to help answer the question
FIRE practitioners care about - if a client is going to use an offshore trust, what actually improves the odds that an onshore court will respect it. Bock emphasized a sensible balance of powers between the settlor (and related persons) and the trustee, and warned against overly fanciful structures that exist mainly to impress marketing brochures. She pointed out that Singapore courts have been distinctly cool on “orphan” companies that look designed more for opacity than genuine risk separation. David stressed the unglamorous basics I also preach to clients - solid documentation, a real paper trail, trustees who occasionally say “no” to distribution requests, and, where justified, a carefully thought-through second layer of asset restructuring beneath the headline trust. To bring this to life, David and I slipped into the roles of client and counsel on stage, playing out the awkward conversation where legal theory meets real-world risk appetite and budget. In the end, we agreed, half-seriously, that he probably could not afford my fees.
Should the Trustee Show Up? Another recurring dilemma I see in practice is whether the offshore trustee should participate in the onshore proceedings at all. I asked Aurélie and Shaul to unpack this, and they both stressed that it is not a question for reflex answers. In some situations, proactive appearance can help shape the narrative, demonstrate good faith and protect the structure; in others, it may open the door to jurisdictional exposure the trustee would rather avoid. When I advise on these issues, I treat them the same way they do, as highly fact-intensive, case-by-case calls. There is no generic “always appear” or “never appear” rule that survives contact with the messy reality of cross-border enforcement.
Akhmedova and “SelfCreated Impossibility” For the enforcement junkies in the room, I was delighted that Shaul revisited Akhmedova, the long-running UK battle between a Russian billionaire and his ex-wife, Tatiana Akhmedova. The 2016 High Court award of £453 million to Ms. Akhmedova has become a reference point for high-value, crossborder enforcement, with the ex-wife still pushing to realize the full amount in the face of alleged asset concealment
| Europe | through complex structures. The case has tested just how far British courts will go in following the money and has attracted international attention from lawyers and transparency advocates alike. On the US side, I flagged one of my favorite cautionary tales - FTC v Affordable Media. In that case, the debtor placed assets into a Cook Islands trust and later claimed to have complied with a US repatriation order by “instructing” the trustee to send the assets back only for the offshore trustee to refuse. The judge was unmoved and jailed the debtor for contempt, labelling the arrangement a “self-created impossibility” that could not excuse disobedience of a court order. As far as I am concerned, for anyone selling absolute protection, that phrase should be printed in large letters above every conference booth.
Drafting Towards - and Away From - Attack We closed the session by circling back to drafting, which many in the audience clearly hoped would provide a silver bullet. I am the first to say that careful wording around reserved powers, information rights and governance is important. But, as the panel agreed, in most jurisdictions the real test is fundamentally subjective. Courts look at purpose, timing, conduct and the overall scheme; where a trust is clearly created for nefarious purposes, no amount of elegant drafting will save it. If I had to distill Toronto into one message for the FIRE community, it is this - offshore structures can sometimes preserve assets, but they are terrible hiding places. For legitimate planning, you need a clear commercial rationale, real divestment of control and trustees who behave like fiduciaries, not fixers. For asset recovery specialists, cases like Akhmedova and Affordable Media show that, with persistence and the right tools, including, when necessary, a prison cell, onshore courts remain remarkably effective at turning “untouchable” offshore wealth into reachable assets.
Neal H. Levin is a partner at Rimon Law in New York and Chicago and heads the firm’s Global Fraud, Investigations and Asset Recovery Group. He focuses his practice on complex fraud, asset recovery and crossborder enforcement, serves as an Officer of the IBA Asset Recovery Committee, sits on the international committees of both NAFER and NABT, and has been described -- affectionately, he hopes -- as “the Wolf” from Pulp Fiction. He solves problems.
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ThoughtLeaders4 FIRE Magazine • ISSUE 25
| Middle East |
WHY BUSINESS CONTINUITY IS A LEGAL ISSUE
LESSONS FROM THE UAE FOR GLOBAL COMPANIES Authored by: Mohammed Al Dahbashi (Managing Partner) - ADG Legal Across global markets, businesses are being forced to move quickly from observation to action. What initially presents as geopolitical or regional tension is now feeding directly into operational decisions across people, supply chains and capital.
From our work with multinational and regional clients operating out of the UAE, a number of patterns are emerging that are relevant well beyond the region.
In practice, business continuity is not just an operational exercise. It is shaped, and often constrained, by legal positioning at every stage.
That approach falls away quickly under pressure. We are seeing relatively contained operational issues begin to trigger wider contractual consequences. A delay in one jurisdiction affects performance in another. A supplier issue becomes a client-facing exposure. Timelines that once felt manageable start to become points of tension.
For international companies operating through the Middle East, many of whom use the UAE as a regional base, that shift has been immediate. Conversations are no longer about planning for different scenarios. They are about what needs to be done now, often with incomplete information and limited room for error. For many organisations, contingency planning has historically been treated as something theoretical. What we are seeing now is different. Plans are being tested in real time, often across multiple jurisdictions at once, and the margin for error is narrow.
In more stable conditions, contracts tend to sit in the background. They are relied on, but not actively revisited unless something goes wrong.
Legal Risk Rarely Sits Where Businesses Expect it to Following the famous saying
“a contract should be signed, put in the drawer and never looked at”.
In a recent matter, a client operating across the UAE, Europe and Asia encountered a breakdown in part of its supply chain. At first glance, the issue appeared logistical. In reality, it exposed a network of contractual dependencies across jurisdictions, each with different governing laws and risk allocations. Without early intervention, the situation would likely have escalated into parallel disputes. Instead, key agreements were reviewed, pressure points identified
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ThoughtLeaders4 FIRE Magazine • ISSUE 25 and discussions opened before positions hardened. The outcome was not enforcement, but adjustment. Operations continued, and relationships were preserved. This is what we are seeing more often. Risk does not sit neatly within a single contract. It runs across interconnected obligations, and it tends to surface quickly when those connections are strained.
Operational Decisions are Carrying Immediate Legal Consequences
When disruption occurs, its impact is felt across multiple jurisdictions, and not always evenly. We are seeing governing law clauses, dispute resolution mechanisms and enforcement routes come under scrutiny in a way they often are not in calmer periods. These are no longer drafting points. They are being tested in real time. If performance is affected in one jurisdiction, where does liability sit. If a dispute arises, how quickly can it be resolved, and where. These questions are becoming immediate commercial considerations rather than legal footnotes. Businesses taking a coordinated crossborder view are managing this far more effectively than those dealing with issues in isolation. Where issues are handled in silos, risk tends to compound quickly.
In the UAE, this has brought employment obligations, licensing constraints and contractual commitments into sharper focus. Decisions that might previously have been taken within one part of the business are now being looked at more holistically, often with legal input at the outset. We are increasingly working with clients at the point decisions are being formed, not after they have been implemented. That makes a real difference. It allows businesses to move with greater clarity, understanding where flexibility exists and where it does not. It also reduces the risk of unintended breaches that are difficult to unwind later.
Cross-Border Structures are Where Pressure Builds Fastest For international businesses, the most significant challenges are rarely confined to one jurisdiction. The UAE often sits at the centre of regional operations, acting as a hub for contracts, personnel and capital flows.
point decisions are being shaped. This includes testing scenarios, assessing risk allocation and helping management teams understand the range of outcomes before they act. In practice, this creates closer alignment between legal, commercial and operational teams. The aim is not to slow decision-making, but to support it with a clearer understanding of consequences. For global companies, the lesson is straightforward. Business continuity and legal strategy are closely connected, particularly where operations span multiple jurisdictions. The UAE provides a clear illustration of how this plays out. Businesses operating from the UAE are coordinating responses across jurisdictions, with legal considerations shaping what is possible and how quickly decisions can be implemented. Those that recognise this early are better protected, and importantly, able to keep moving while others are still working out their position.
A consistent theme across our client base has been the pace at which decisions need to be made. Relocating staff, pausing projects, adjusting supply routes or changing counterparties are all being considered in compressed timeframes. These are operational decisions, but they are not operational in consequence.
| Middle East |
Communication is Becoming Part of Legal Strategy Another shift we are seeing is in how communication is approached. There is often a tendency to wait for certainty before engaging with counterparties or stakeholders. In practice, that delay can limit options. We are advising clients to engage earlier, with a clear understanding of their legal position but also with a view to preserving commercial relationships. In many cases, this has led to more practical outcomes. Adjusted timelines, temporary waivers or revised delivery structures that would have been harder to achieve later.
Author: Mohammed Al Dahbashi is a leading Emirati lawyer and Managing Partner of ADG Legal, where he has led the firm since 2015. His practice spans both contentious and noncontentious matters, with a focus on complex commercial, corporate and cross-border work. He brings over a decade of experience across private practice and in-house roles, including leading sovereign wealth and development funds. A licensed advocate with full rights of audience before all UAE courts, he has extensive experience in arbitration, commercial litigation and corporate advisory matters. Mohammed is also a regular speaker at international forums and remains actively involved in pro bono work and community initiatives in the UAE.
Handled properly, communication becomes a way of managing legal exposure, not just responding to it.
Legal Teams are Being Brought into Decisions Earlier Perhaps the most noticeable change is how legal teams are being used. Rather than being brought in once an issue has fully materialised, legal advisers are increasingly involved at the
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| Asia |
ThoughtLeaders4 FIRE Magazine • ISSUE 25
CRYPTO ASSET RECOVERY IN KOREA
PRACTICAL CHALLENGES IN SEIZURE, ENFORCEMENT, AND CROSS-BORDER PROCEEDINGS Authored by: Ohoon Kwon (Managing Partner) - Cha & Kwon
Introduction South Korea ranks among the world’s most active cryptocurrency markets, with millions of retail investors and several major exchanges processing billions of dollars in daily volume. This scale of activity inevitably generates disputes — from fraud and embezzlement to money laundering and tax evasion — in which the tracing and recovery of digital assets becomes a central concern. While recent legal developments have strengthened the theoretical framework for crypto asset seizure, practitioners on the ground continue to face significant practical obstacles. This article examines those challenges with a focus on Korean domestic enforcement and cross-border recovery.
The Supreme Court Clarifies Seizability A landmark decision by the Supreme Court of Korea (Case No. 2025Mo45, decided 11 December 2025, Second Division, Presiding Justice Kwon Young-jun) resolved a long-standing controversy. The case arose from a criminal investigation into violations
of the Proceeds of Crime Act, in which police had obtained a warrant in January 2020 and seized 55.63 Bitcoin from the suspect’s account on a domestic exchange by transferring the assets to a law enforcement-controlled wallet. The suspect challenged the seizure, arguing that Bitcoin — being intangible — did not qualify as “property subject to seizure” under Articles 106 and 219 of the Criminal Procedure Act. The Supreme Court dismissed the appeal, holding that under the Virtual Asset User Protection Act, virtual assets are electronic tokens of economic value capable of being traded or transferred electronically. The Court confirmed that Bitcoin possesses the requisite characteristics — independent manageability, tradeability, and effective control over economic value — to constitute seizable property. This was the first time the Supreme Court had explicitly ruled on the seizability of virtual assets held in exchange-based custodial wallets. This ruling removed a major source of uncertainty. Prior to the decision, lower courts had reached inconsistent conclusions, and exchange operators sometimes resisted or delayed compliance with seizure orders on the grounds that the legal basis
was unclear. The Supreme Court’s pronouncement now provides authoritative guidance for prosecutors, police, and exchanges alike.
Practical Difficulties in Domestic Enforcement Despite this legal clarity, enforcement in practice remains far from straightforward. First, speed is critical but hard to achieve. Cryptocurrency can be transferred across wallets in minutes. Once an asset leaves a domestic exchange — particularly to a selfhosted wallet or a foreign platform — the window for seizure narrows dramatically. Korean exchanges generally comply with court-ordered freezes, but the process of obtaining and serving such orders is not always fast enough to prevent dissipation.
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| Asia |
ThoughtLeaders4 FIRE Magazine • ISSUE 25 Second, custody of seized assets poses unresolved problems. The National Police Agency has been working since 2025 to standardise how seized cryptocurrency is stored and managed, drafting guidelines for each stage of the seizure process, including software wallet management and private key security. However, three bidding rounds in 2025 failed to identify a suitable private custody provider, and selection is now expected in the first half of 2026. Until a reliable custody infrastructure is in place, seized assets remain vulnerable to security risks, and the question of who bears liability for value fluctuations during the holding period is unanswered. Third, timing of disposal creates its own complications. Even after a final court judgment, there is no clear statutory timeline for when prosecutors must liquidate seized digital assets. Market volatility means that delays in disposal can dramatically alter the value realised. A February 2026 media report highlighted cases in which tokens held pending final judgment had been delisted from exchanges, leaving prosecutors unable to sell them at all. This gap in the procedural framework creates uncertainty for both enforcement authorities and the parties whose assets have been seized. Fourth, the administrative enforcement space is innovating faster than the criminal justice system. Suwon City made headlines by opening a corporate account on Upbit — Korea’s largest exchange — to receive delinquent taxpayers’ seized crypto assets and sell them directly on the open market. This approach, the first of its kind
among Korean local governments, demonstrates a pragmatic workaround, but it also underscores the absence of a uniform national procedure.
Cross-Border Recovery: The Hardest Cases Where digital assets cross jurisdictions, recovery becomes exponentially more difficult. Korea’s regulatory framework is evolving to address this. Under the Act on Reporting and Using Specified Financial Transaction Information, foreign VASPs serving Korean users are already required to register with the Korea Financial Intelligence Unit (KoFIU). Separately, the government is pursuing amendments to the Foreign Exchange Transactions Act that would impose pre-registration obligations on businesses involved in cross-border virtual asset transfers and require periodic transaction reporting to the Bank of Korea. These measures, once fully implemented, should improve the traceability of cross-border flows. However, registration requirements alone do not solve the enforcement problem when assets are held on unregulated platforms or in self-hosted wallets in uncooperative jurisdictions. International cooperation mechanisms remain nascent. While Korea participates in FATF processes — and the FATF’s November 2025 guidance on virtual asset recovery outlines three main pathways (direct private key acquisition, VASP-mediated recovery, and stablecoin provider freezes) — practical implementation varies widely. FATF assessments indicate that over
80% of jurisdictions are operating at low or moderate levels of effectiveness in asset recovery. The massive theft from ByBit in February 2025 — in which approximately $1.5 billion in Ethereum was stolen by the North Korea-linked Lazarus Group, and only around 3.5% of the stolen funds had been frozen as of early 2026 — illustrates the scale of the challenge even when sophisticated blockchain analytics are deployed. For Korean practitioners seeking to recover crypto assets held abroad, the typical route involves Mutual Legal Assistance Treaty (MLAT) requests or direct engagement with foreign exchanges. Both processes are slow. MLAT requests can take months or years, during which assets may be moved multiple times. Direct engagement with foreign VASPs depends on whether those entities recognise the authority of Korean court orders — a question that varies by jurisdiction and by platform.
Looking Ahead Korea’s legal infrastructure for crypto asset seizure has advanced considerably. The Supreme Court’s 2025 ruling provides a firm doctrinal foundation, and regulatory initiatives are progressively closing gaps in traceability and oversight. Yet the practical reality is that enforcement continues to lag behind the speed and borderlessness of digital asset transfers. Custody standards need to be finalised, disposal timelines need statutory clarity, and cross-border cooperation mechanisms require substantial strengthening. For international practitioners and asset recovery specialists, Korea represents a jurisdiction where the legal tools are increasingly robust but where execution demands close coordination with local counsel, early engagement with exchanges, and realistic expectations about timelines. The gap between legal authority and practical recoverability remains the defining challenge in this space.
Ohoon Kwon is the Managing Partner of Cha & Kwon, a Seoul-based law firm specialising in digital assets, blockchain, and cross-border transactions. He will be speaking at FIRE International 2026 in Vilamoura, Portugal.
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ThoughtLeaders4 FIRE Magazine • ISSUE 25
FIRE INTERNATIONAL EDITION TRACING PORTUGAL FRAUD GOLF CORRUPTION INTERNATIONAL RECOVERY PADEL INSOLVENCY ENFORCEMENT
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®
Meet
Paul Barford Founder/ Managing Director 020 7101 4155 email Paul
Chris Leese Founder/Chief Commercial Officer 020 7101 4151 email Chris
Danushka De Alwis Founder/Chief Operating Officer 020 7101 4191 email Danushka
Yelda Ismail Group Marketing Lead 020 3398 8551 email Yelda
Amelia Gittins Senior Strategic Partnership Executive 020 3059 9797 email Amelia
Ben Sullivan Commercial Director 020 3965 4386 email Ben
Melody Mok Conference Portfolio Manager 020 3997 8527
Lily Taylor Marketing Manager 020 3433 2285
email Melody
email Lily