Fraud Pleadings and Freezing Orders: Direct Relevance and a Cumulative Assessment of Dissipation Risk

1. Introduction

This decision addresses three connected questions in commercial fraud litigation: which allegations properly belong in a statement of case; when documents should be obtained from a non-party; and what evidence justifies a worldwide freezing order.

The Court of Appeal distinguished allegations directly connected with the transactions under examination from allegations of unrelated wrongdoing that would disproportionately expand the trial. It also upheld third-party disclosure where independent copies could help resolve genuine concerns about document authenticity. However, it refused to freeze the defendants’ assets: serious, arguable allegations of fraud did not automatically establish a real risk that assets would be dissipated to defeat enforcement.

The judgment principally clarifies and applies established law rather than creating a new jurisdiction. Its significance lies in insisting on separate, properly reasoned assessments of relevance, disclosure necessity and prospective enforcement risk.

2. Background and Procedural Setting

Alliance Petrochemical Investment (Singapore) Pte Ltd (“API”) held shares in Mehr Petrochemical Company, an Iranian company operating a petrochemical plant. API was entitled to obtain and resell petrochemical products through an assigned distributor.

In July 2018, Petrochemical Industries Ltd (“PIL”) acquired API’s shares. PIL was then owned and controlled by the first defendant, who became an appointed director of API and later resigned. API alleged that he continued acting as a shadow director and chief executive, assisted by the second defendant as chief financial officer. The defendants disputed those roles and their alleged control of the business.

API alleged that the defendants misappropriated at least €143.8 million through unauthorised transfers and diverted customer receipts. It claimed that substantial sums passed through PIL and were used in the acquisition of RockRose Energy Ltd by Viaro Energy Ltd (“VEL”) in September 2020. Its causes of action included breach of trust or fiduciary duty, dishonest assistance, knowing receipt, unjust enrichment, conversion and conspiracy, alongside claims to trace funds into associated companies and assets.

The defendants denied the allegations. Their case was that a third party controlled API and its distributor, that relevant payments had legitimate contractual explanations, and that RockRose was purchased using funds unconnected with API. They also made substantial counter-allegations concerning the third party’s conduct.

The proceedings were unusually contentious: approximately 22 applications had already been made before disclosure. The appeal arose from interlocutory decisions of Mr Lionel Persey KC, sitting as a High Court judge, reported at [2026] EWHC 2178 (Comm).

The applications

• Strike-out: the defendants sought removal of allegations they characterised as collateral to API’s claims.
• Non-party disclosure: API sought documents from H&P Advisory Ltd (“H&P”) concerning financing said to have been available for the RockRose acquisition.
• Asset protection: API sought worldwide freezing and proprietary injunctions up to €160 million.
• Stay: the defendants and VEL sought to postpone H&P’s disclosure pending appeal.

The first-instance judge refused strike-out, ordered disclosure of eight of nine requested document categories, and refused the injunctions and stay. Those decisions generated the appeal and cross-appeal.

3. Summary of the Judgment

Crucially, the Court did not determine whether the alleged frauds or forgeries had occurred. Its conclusions concerned pleading, disclosure and interim protection, not final liability.

4. Fraud Pleadings: Direct Relevance Versus Collateral Wrongdoing

4.1 The governing procedural rules

CPR 3.4(2) permits strike-out where a statement of case discloses no reasonable grounds or constitutes an abuse of process or is otherwise likely to obstruct the just disposal of proceedings. CPR 16.4(1)(a) requires a concise statement of the facts relied upon. The Commercial Court Guide additionally requires full and specific particulars of fraud, dishonesty, malice or illegality, including the facts supporting any proposed inference of dishonesty.

These obligations must operate together. A claimant must give adequate notice of its fraud case, but cannot justify an unlimited catalogue of accusations merely by labelling them particulars of dishonesty.

4.2 The acquisition-financing allegations

API alleged that two purported Abu Dhabi loan facilities, each for £250 million, were fictitious. Related allegations concerned representations to the judge who sanctioned the RockRose acquisition scheme, reliance on the facilities in subsequent litigation, and an allegedly false bank balance confirmation sent to H&P.

It was common ground that the facilities had not been drawn down or used to purchase RockRose. Accordingly, their alleged falsity did not itself identify or trace API’s money. Nevertheless, the allegations could perform a different evidential function: if the defendants fabricated £500 million of available financing, that might support an inference that they were disguising the actual source of the acquisition funds.

The allegations also potentially connected particular payments with the production of allegedly false documents. That connection could bear on the disputed question of who controlled API’s and its distributor’s bank accounts.

The Court therefore upheld their inclusion, while directing API to amend its statements of case to explain their relevance more clearly. Their confusing placement under a heading concerning Norwich Pharmacal/Bankers’ Trust relief did not eliminate their substantive relevance, but required correction.

4.3 Precedents governing pleading and evidential relevance

Portland Stone v Barclays [2018] EWHC 2341 (QB)

The defendants relied on Stuart-Smith J’s statement that pleaded facts should be “no less and no more” than those the claimant must prove to succeed. The Court rejected an excessively literal interpretation. A claimant alleging fraud may plead several supporting particulars, although its case might succeed without proving every one. The authority requires disciplined pleading; it does not prohibit relevant cumulative particulars.

Metropolitan Asylum District Managers v Hill (No. 1) (1882) 47 L.R 29

Lord Watson’s formulation concerning evidence having “a direct relation to the principal question in dispute” helped explain why the acquisition-financing allegations were not merely similar fact evidence. They concerned the very acquisition into which API alleged its money had flowed, rather than a separate episode offered simply to demonstrate propensity.

O'Brien v Chief Constable of South Wales Police [2005] 2 AC 534

This authority supplied an alternative analysis. If the disputed allegations were treated as similar fact evidence, their admissibility depended initially on whether they made a matter requiring proof more or less probable. The acquisition-related allegations were potentially probative on that basis too.

However, evidential relevance is not the end of the inquiry. The court must also consider whether admitting the material would generate disproportionate cost, complexity and distraction. That case-management assessment became decisive when the Court considered the foreign-proceedings allegations.

4.4 Why the foreign-proceedings allegations were different

The impugned passages referred to accusations in Italian tax proceedings concerning allegedly inflated accounts and in criminal proceedings concerning a payment involving Napag Italia.

The Court identified two difficulties. First, the mere fact that someone has been accused elsewhere is irrelevant unless the underlying wrongdoing is itself asserted and relevant. An accusation does not establish its own truth.

Second, even assuming API intended to allege that the underlying conduct occurred, those matters predated the first defendant’s directorship of API and the alleged misappropriations. They were not particulars of the central fraud and lacked a direct connection with the principal issues.

The Court was not persuaded that they had probative value. Even if some value existed, it would be minor compared with the substantial increase in trial length, complexity and disputed factual inquiry. Applying the balancing exercise in O'Brien v Chief Constable of South Wales Police, the evidence should not be introduced and the associated pleas should be removed.

This was not a categorical rule excluding earlier wrongdoing or foreign proceedings. It was a contextual judgment about weak relevance and disproportionate consequences.

4.5 Procedural fairness and appellate intervention

The defendants also complained that the judge had adopted API’s partisan account of the background. The Court rejected that challenge: the judge had identified the source, acknowledged the disputes and demonstrated awareness of the defence. His narrative was not a set of factual findings.

Conversely, the Court intervened over the foreign allegations because the judge’s brief reasoning had not addressed their remoteness and likely effect on the trial. Although case-management decisions attract substantial appellate respect, this decision fell outside the range of reasonable approaches.

5. Non-Party Disclosure: Relevance Is Necessary but Not Sufficient

5.1 The statutory framework

The application against H&P arose under section 34(2) of the Senior Courts Act 1981 and CPR 31.17. The Court endorsed the framework summarised in Bugsby Property LLC v LGIM Commercial Lending Ltd [2021] EWHC 1054 (Comm):

1. The documents must be likely to support the applicant’s case or adversely affect another party’s case.
2. Disclosure must be necessary to dispose fairly of the claim or save costs.
3. The documents or classes must be sufficiently clear and specific.
4. The court must decide whether to exercise its discretion to order disclosure.

The first-instance summary had misstated part of Bugsby Property LLC v LGIM Commercial Lending Ltd, but the error was not material to the outcome. Importantly, necessity retains an independent role: documents do not become disclosable from a non-party merely because they are relevant.

5.2 The disclosure precedents and their influence

Constantin Medien AG v Ecclestone [2013] EWHC 2674 (Ch)

This decision supplied the four-part structure adopted through Bugsby Property LLC v LGIM Commercial Lending Ltd. It also recognises that compliance may involve some judgment by the non-party, provided the order does not require that person to master and determine the litigation’s disputed issues.

Three Rivers DC v Bank of England (No.4) [2003] 1 WLR 210 (CA)

“Likely” does not mean that assistance or harm must be established on the balance of probabilities. It is enough that the documents “may well” support the applicant or adversely affect another party. However, every document within a requested class must satisfy the relevant test; broad categories cannot be justified by pointing only to some potentially useful contents.

American Home Products Corp v Novartis Pharmaceuticals UK Ltd (No.2) [2001] FSR 41 (CA)

This authority qualifies an overly narrow approach to relevance. A document may satisfy the test by supplying context for other, more obviously significant documents, even if it would appear unhelpful viewed alone.

Andrew v News Group Newspapers Ltd [2011] EWHC 734 (Ch)

The observation that necessity largely follows relevance must be read with its accompanying requirement to consider alternative sources. Existing disclosure may already be sufficiently complete, making it unnecessary to burden a non-party with duplicative production.

Re Howglen [2001] 1 All ER 376

This case supports requirements concerning the existence of documents and an objectively intelligible disclosure order. It also underlines the caution appropriate when exercising an intrusive jurisdiction against someone outside the litigation.

Flood v Times Newspapers Ltd [2009] EWHC 411 (QB)

The description of non-party disclosure as “intrusive” explains why relevance alone cannot justify an order. The interests of the non-party remain part of the discretionary assessment.

Frankson v Home Office [2003] 1 WLR 1952, and Ang v Reliantco Investments Ltd [2020] EWHC 2529 (Comm)

These authorities reinforce that non-party disclosure remains the exception rather than the rule. Frankson v Home Office also illustrates that confidentiality may influence the court’s discretion. The present judgment did not suggest that these safeguards disappear in fraud litigation.

5.3 Why disclosure from H&P was justified

Because the acquisition-financing allegations properly remained in the case, related documents could satisfy the relevance threshold. Their omission from a draft list of issues was not decisive: that list remained unfinalised and expressly preserved the parties’ pleaded cases.

Some documents were unlikely to be held by the defendants. For those categories, obtaining them from H&P was necessary in a relatively straightforward sense.

Other documents might also be available from the defendants. Nevertheless, API had raised legitimate concerns about the authenticity of documents previously produced. Independent copies from H&P could establish whether those concerns were justified. This reasoning did not presume that any document was forged; it recognised that authenticity was itself a serious issue requiring reliable evidence.

Whether third-party production should await the defendants’ own disclosure was a question of sequencing. The judge’s decision to proceed immediately was a reasonable case-management choice.

5.4 Document existence and the limits of the ruling

H&P’s confirmation that it was ready to disclose documents in categories one to four sufficiently supported the existence of category-four material.

For category six, H&P said it held no documents. The Court nevertheless accepted an order allowing that position to be stated formally in the disclosure list accompanying the wider production. It described this as an unusual but permissible adjunct to the broader order.

This narrow procedural accommodation should not be treated as general permission to seek speculative disclosure of documents whose existence has not been established.

6. Worldwide Freezing Orders: Fraud, Delay and Dissipation

6.1 The three requirements

The Court confirmed that an applicant must establish:

1. a serious issue to be tried;
2. a real risk, assessed objectively, that a future judgment would go unmet because of unjustified dissipation of assets; and
3. that granting the order would be just and convenient in all the circumstances.

In Isabel Dos Santos v Unitel S.A. [2024] EWCA Civ 1109, the Court of Appeal rejected a distinction between the “good arguable case” merits test for freezing orders and the “serious issue to be tried” test applicable to other injunctions. The present Court applied that approach.

Satisfying the merits requirement does not, however, satisfy the dissipation requirement. The two address different questions: whether the claim merits trial, and whether assets are genuinely at risk of being put beyond enforcement.

6.2 The exceptional nature and proper purpose of freezing relief

FW Aviation (Holdings) 1 Limited v VietJet Aviation Joint Stock Company [2025] EWHC 1920 (Comm)

The Court endorsed the warning that freezing relief drastically interferes with property rights and may cause reputational damage. Courts must therefore remain vigilant against inappropriate applications.

Holyoake v Candy [2018] Ch 297 (CA), and Fourie v Le Roux [2007] 1 WLR 320 (HL)

These authorities emphasise close regulation of a remedy capable of having a “nuclear effect” on dealings with assets. The safeguards protecting defendants are integral to the jurisdiction, not technical obstacles to be relaxed whenever fraud is alleged.

Petroceltic Resources Ltd v Archer [2018] EWHC 671 (Comm)

A freezing order is not intended to provide reassurance or an additional route to disclosure. Its function is to address a demonstrated risk that enforcement will otherwise be frustrated.

Lakatamia Shipping Co Ltd v Morimoto [2019] EWCA Civ 2203, and Fundo Soberano de Angola v dos Santos [2018] EWHC 2199 (Comm)

These decisions distinguish prevention of enforcement evasion from provision of security. A freezing order does not ordinarily require defendants to abandon legitimate business or personal dealings merely to preserve a fund for the claimant.

They also require solid evidence and a cumulative assessment of the relevant circumstances. Evidence-based inferences remain permissible; a general assertion that a defendant accused of fraud might move assets is insufficient.

6.3 When dishonesty and asset-management capability matter

Fundo Soberano de Angola v dos Santos and PJSC National Bank Trust v Mints [2019] EWHC 2061 (Comm) recognise that the nature of alleged dishonesty may support an inference of future dissipation. Conduct involving concealment or manipulation of assets may be particularly relevant. There is nevertheless no automatic progression from an arguable dishonest act to a freezing order.

Caring Together Ltd v Bauso [2006] EWHC 2345 (Ch) identifies financial sophistication and the ability to move and manage assets abroad as relevant considerations. Such capability forms part of the overall assessment, but is not itself evidence that it will be used improperly.

6.4 Delay is evidence, not an automatic bar

The first-instance judgment had stated that API needed new evidence of dissipation risk and described delay as fatal. Read literally, those statements could suggest an incorrect rule that a delayed applicant must cross a separate “new evidence” threshold.

The Court of Appeal expressly rejected that approach as a general proposition. The proper inquiry considers all relevant evidence cumulatively, including material supporting risk and material pointing against it.

Delay can nevertheless have substantial evidential importance. Where defendants have known of serious claims for years, but there is no evidence of dissipation during that period, the absence of such evidence may weaken the alleged risk. Delay may sometimes also suggest that the claimant itself did not perceive an urgent enforcement threat.

Madoff Securities v Raven [2011] EWHC 3102 (Comm), also cited in the judgment as Madoff Securities International Ltd v Raven, informed this treatment of delay. The same authority recognises that refusal to provide voluntary asset disclosure may sometimes count against a defendant. Neither proposition operates mechanically: both depend on context.

6.5 Why API’s application failed

Reading the first-instance judgment as a whole, the Court concluded that the judge had understood the relevant principles. Although some wording was overly mechanical, he had considered the fraud allegations, their age, the absence of cogent new evidence of dissipation risk and the significance of delay.

The Court also undertook an alternative evaluation and reached the same result:

• The merits remained contested. The extensive evidence and serious counter-allegations did not justify treating API’s case as established rather than presenting serious issues for trial.
• Foreign litigation did not establish obstruction. The Court could not conclude, even provisionally, that the defendants’ overseas proceedings were abusive attempts to defeat the English action. Nor did it endorse the defendants’ corresponding accusations against API.
• No dissipation during the relevant period was evidenced. The defendants had known of API’s allegations since at least the Singapore proceedings begun in July 2023; the English action followed in August 2024.
• Refusal of voluntary disclosure was not decisive. In the circumstances of hostile, multi-jurisdictional litigation, the Court would not infer dissipation risk from the defendants’ refusal to volunteer their asset details.
• Each defendant required separate consideration. Even had the evidence justified relief against the first defendant, the Court would not have found sufficient evidence against the second.

The judge had also rejected reliance on allegedly excessive remuneration, deteriorating group finances and TAQA Bratani Ltd v Fujairah Oil and Gas UK LLC [2025] EWCA Civ 1669. In particular, that appellate decision did not demonstrate a propensity to strip assets. The first defendant’s remuneration, although extremely generous, was linked contractually to EBITDA, disclosed in accounts and treated by the judge as ordinary-course business remuneration.

6.6 Appellate restraint and the remaining discretionary issues

Lakatamia Shipping Co Ltd v Morimoto, drawing on Lakatamia Shipping Co Ltd v Su [2012] EWCA Civ 1195 and Stuart v Goldberg Linde (a firm) [2008] 1 WLR 823, stresses the respect owed to experienced commercial judges’ assessments. The Court applied comparable restraint to findings about dissipation risk. That restraint does not prevent correction of a legal misdirection; here, the Court found no sufficient basis to interfere and independently reached the same conclusion.

Because dissipation risk was not established, the Court did not need to decide the broader justice-and-convenience objections. It nevertheless expressed reservations about the substantial business harm an injunction might cause and the likely inadequacy of API’s cross-undertaking in damages. Those observations were additional concerns, not necessary grounds of decision.

API no longer pursued a proprietary injunction on appeal. The judgment therefore does not establish an appellate ruling on the merits of that distinct remedy.

7. Stay and Subsequent Use of Disclosed Documents

The parties agreed that H&P would withhold disclosure until judgment, making further consideration of the stay unnecessary.

Once produced, the documents would be subject to CPR 31.22(1), which generally restricts disclosed documents to use in the proceedings in which they are disclosed, subject to the rule’s exceptions. The Court considered that protection sufficient and declined to require additional undertakings from API.

8. Complex Concepts Simplified

Strike-out

Removing all or part of a pleaded case because it lacks a proper legal basis or would improperly obstruct fair proceedings. It need not involve deciding whether the allegation is factually true.

Similar fact evidence

Evidence about a separate event offered because it helps prove something in the present dispute. Evidence concerning the disputed transaction itself may instead be directly relevant.

Tracing

The process of identifying value as it moves from one asset or recipient into another. Showing that an alternative financing explanation was false may support an inference of concealment, but does not itself identify the claimant’s money.

Non-party disclosure

A court order requiring someone outside the litigation to identify or produce specified documents. Its intrusive nature explains the separate requirements of relevance, necessity and discretion.

Unjustified dissipation

Disposing of or concealing assets in a way that threatens enforcement, rather than legitimate ordinary-course dealings. A defendant’s wealth, mobility or international banking arrangements do not alone establish this risk.

Cross-undertaking in damages

The applicant’s promise to compensate loss caused by an injunction if compensation is later required. Whether that promise has financial substance can affect the fairness of granting relief.

Freezing versus proprietary injunction

A freezing order restricts dealings with assets to protect prospective enforcement. A proprietary injunction protects identified property in which the claimant asserts an ownership interest.

9. Likely Impact and Practical Lessons

For fraud pleadings

The decision supports pleading facts that genuinely explain a fraudulent transaction or the concealment of its funding, even if each fact is not indispensable to success. However, allegations must be linked clearly to the causes of action. Accusations of unrelated wrongdoing cannot be retained merely to create an adverse impression.

For disclosure applications

Independent third-party copies may be necessary where authenticity is genuinely disputed, even if a party may hold equivalent documents. Applicants should still explain why ordinary disclosure is insufficient, define the categories precisely and address the burden on the non-party.

For freezing applications

Applicants should identify why the particular evidence supports a present enforcement risk, rather than simply repeat the underlying fraud case. A delayed application requires an explanation of the intervening history, but there is no universal requirement for newly discovered evidence.

Respondents, correspondingly, cannot rely on delay as an automatic defence. Its significance depends on the whole evidential picture. Courts must also distinguish the circumstances of individual defendants rather than assume a common risk from their association.

For case management

The judgment demonstrates that appellate deference has limits. A court may preserve transaction-linked allegations while removing remote accusations whose modest evidential value is outweighed by the expense and distraction they would generate.

10. Conclusion

The judgment draws a clear distinction between allegations fit for trial, documents necessary to investigate them, and evidence sufficient to justify an exceptional restriction on assets.

API could pursue its acquisition-financing allegations and obtain independent documents from H&P, but could not expand the trial through remote foreign accusations or obtain a freezing order merely because its fraud case was seriously arguable. The central lesson is disciplined, issue-specific analysis: pleadings require meaningful relevance, non-party disclosure requires necessity, and freezing relief requires a cumulative, evidence-based assessment of real dissipation risk.