Home » Fraud updates » First ever search order against a third party granted: the Chabra moment for search orders

First ever search order against a third party granted: the Chabra moment for search orders

Amongst the wide array of tools available in the English Courts for intended and actual claimants are what have been described as the law’s two nuclear weapons, freezing injunctions and search orders. Since the seminal case of Chabra, Courts have been willing to grant freezing orders not just against defendants, but against third parties against whom no claim is advanced but who appear to hold assets on behalf of the defendant. Yet in the quarter of a century since Chabra, and until very recently, no case seems to have tried to use the search order jurisdiction in a similar way. The matter of Abela and others v Baadarani (Third Party: Fakih) [2017] EWHC 269 (Ch) – in which PCB Litigation act for the Claimants – has now achieved that.

The background to the case is as follows. In 2009, the Claimants commenced proceedings against Mr Baadarani and another defendant. There then followed a jurisdictional challenge by Mr Baadarani, culminating in what is the leading case regarding alternative service out of the jurisdiction (Abela and others v Baadarani [2013] UKSC 44). Following the Supreme Court’s rejection of Mr Baadarani’s jurisdictional challenge, the matter then proceeded until, in June 2015, judgment was entered against Mr Baadarani in a sum of over US$20 million following his failure to comply with a number of unless orders. As part of enforcement efforts, and having obtained a worldwide freezing order against Mr Baadarani the day before, PCB obtained a number of third party disclosure orders, including against a bank and the Respondents to the Search Order obtained shortly after. In response to the disclosure orders, the bank provided considerably more documents than the Respondents had, and the disclosure that was provided suggested that the Respondents had conspired with Mr Baadarani to backdate an asset statement. This was in fact created in 2015 and backdated to 2013.

As a result, we successfully applied on a without notice basis for a search order against the Respondents for relevant documents in their possession. That application was granted on 21 April 2016 (Abela and others v Baadarani (Third Party: Fakih) [2016] EWHC 971 (Ch)) following our argument that, like Chabra some 25 years earlier, an order could be granted against parties against whom no cause of action was being pursued.

At a hearing in February 2017, we successfully resisted the Respondents’ attempts to challenge the Court’s jurisdiction to grant the relief obtained by the Claimants.

The Court’s decision is to be welcomed as confirming the existence of yet another tool in the litigator’s armoury.

Trevor Mascarenhas and Jon Felce act for the Claimants in this matter.