The High Court in PT Bayan Resources TBK v BCBC Singapore Pte Ltd & Ors has approved the grant a freezing order over Australian assets owned by an Indonesian company involved in a lawsuit with a Singaporean company in Singapore in anticipation of the registration of a foreign judgment.

Generally freezing orders are made in proceedings which are before or which will be commenced in an Australian court.  Such an order can be made against a third party where there is no present cause of action exists and where that third party is not party to any legal proceedings.  In this case, there were no proceedings before the Australian courts at all.

In anticipation of obtaining judgment overseas, BCBC sought freeing orders from the Supreme Court of Western Australia to restrain PT Bayan from dealing with its shareholding in a company which was incorporated in Australia.  The WA Supreme Court granted those orders.

On appeal the High Court confirmed that it is acceptable for freezing orders to be granted to protect a prospective enforcement process even if the enforcement itself may be contingent on factors beyond the outcome of the overseas proceedings.

This decision may embolden foreign companies to bring actions for freezing orders in Australia if foreign defendants (or prospective foreign defendants) hold assets in Australia which might otherwise be easily liquidated before an overseas lawsuit is heard.

For more information please contact ERA Legal.