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Commercial Court erratic behaviour of freezing order respondent

1 Sep 2016

The case of Banque Cantonale Geneve v Sanomi concerned a Swiss bank which provided finance to an offshore oil company for the charter of a vessel and its cargo of petrol, subject to an undertaking by the company that the cargo would not be unloaded without the bank’s agreement and subject to charges over property for security. The bank later discovered that the cargo had been unloaded, and the properties either had ownership issues or had been sold. The bank obtained a freezing order against the company and issued proceedings to recover the monies provided as finance.

 

In deciding whether to continue the freezing order, the court required ‘solid evidence’ of a real risk that the company wouldn’t pay.  In assessing whether there is such evidence, the court held that it could take into account the company’s behaviour in unloading the cargo and selling properties.  The court found that that behaviour had demonstrated “an unacceptably low standard of commercial morality”.

 

The case illustrates that evasive and misleading behaviour is likely to count against respondents to freezing orders to the extent that such orders may be made or continued against them.

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