AAA v BBB and others [2025] EWHC 1647 (Comm) Worldwide freezing order discharged where claim form not served on time

In AAA v BBB and others, the Court considered the circumstances in which an extension of time for serving a claim form may be granted. In this case, an extension had been granted, but the Defendant sought to have it set aside on the grounds of lack of jurisdiction because: (i) the time for serving the arbitration claim form had expired before the relevant worldwide freezing order (“WWFO”) was granted and the arbitration claim form served; (ii) the Court had no jurisdiction to extend time for service retrospectively; and (iii) there was a concealment of material facts in the extension application. The Court agreed, finding that the arbitration claim form had expired and the grounds for a retrospective extension of time had not been made out. The claim form was set aside and the WWFO discharged. The case reaffirms the Court’s strict approach to extensions of time for service of the claim form, and the fact that there is no added leniency in respect of arbitration claims and without notice applications founded on such claims.

Factual background

• The underlying dispute related to a Software License Agreement (“SLA”) between the Claimant and the Defendant for the provision by the Claimant of white label online casino services. The Claimant purported to terminate the SLA in June 2023 then requested to postpone this. The parties entered into commercial discussions but in January 2024, the Defendant itself sent a notice to terminate. On 26 January 2024, the Claimant’s legal representatives served an arbitration notice seated in Latvia on the Defendant, alleging that the Claimant was owed approximately €11.28 million. The Defendant alleged a counterclaim of around €24.7 million.

Procedural background

• An arbitration claim form is necessary where making a claim or application to the Court concerning an arbitration or proposed arbitration. For example, this could be a claim to determine whether there is a valid arbitration agreement or an application for the removal of an arbitrator.
• In this case, an arbitration claim form was required for the making of an application for a worldwide freezing order in support of the Latvian arbitration. A freezing order is a type of interim injunction which stops the respondent from disposing of or dealing with its assets. The purpose of this is generally to preserve a respondent’s assets until judgment is obtained and can be enforced.
• On 13 December 2024, the Claimant’s solicitors CE-filed an application for a WWFO pursuant to Section 44(3) of the Arbitration Act 1996, relying on the ease of dissipation and the liquidity of the respondent’s assets as factors going to urgency.
• Following prompting from the Court, the Claimant also filed a claim form and this was sealed on 18 December 2024. Pursuant to CPR 62.4(2), the claim form had to be served within one month of the date of issue, i.e. by 17 January 2025. However, the Claimant did not do so, on the basis that serving the claim form before the without notice WWFO application was heard would “tip off” the Defendant and undercut the application.
• On 23 December 2024, the Claimant’s solicitors told the listing office that the claim had now been issued and provided a hearing time estimate, skeleton argument and bundle.
• A witness statement for the Claimant stated that, “[o]n 23 December 2024, the Listing Office proposed that the case was likely not suitable for listing before a King’s Bench vacation Judge”. However, the Listing Office actually said, “[a]s you have taken two weeks to respond with the hearing bundle this is presumably not sufficiently urgent for a vacation judge sitting in King’s Bench to hear”. The Claimant responded requesting a hearing “as soon as there is availability after the commencement of the new term”. The new term began on 13 January 2025.
• On 2 January 2025, the Claimant’s solicitors reminded the Court that the application was without notice. The Listing Office said they would need to go to Court 37 for an out of hours hearing. The Claimant’s solicitors responded, “…the hearing of the application out of hours would not be necessary”.
• The WWFO hearing was fixed for 7 February 2025. At this hearing, the Court’s attention was not drawn to the fact that the claim form had expired 21 days previously.
• The WWFO was sealed on 13 February 2025. It included an undertaking to serve the claim form “as soon as practicable”; however, no such steps were taken until 28 February 2025, when the Claimant contacted the Foreign Process Section (“FPS”), which deals with the service of documents outside of the UK.
• On 25 March 2025, the FPS pointed out that the claim form had expired and asked if there was a court order extending time for service. The Claimant’s solicitors responded that, “the arbitration claim form…was filed solely in order to enable making an application without notice for a freezing injunction… there is no need for the extension of the arbitration claim form – serving it before the order of 13 February 2025 was made would have been out of the question, as the application was without notice”.
• The claim form was purportedly served on the Defendant on 26 March 2025, ten weeks after expiry.
• On 9 April 2025, the Claimant issued an application for an “[e]xtension of the period for service of the arbitration claim form issued on 18 December 2024 pursuant to CPR 62.4(2)”. The evidence in support did not draw attention to the applicable requirements of CPR 7.6 (covering the circumstances where the claimant may apply for an extension). The application did not explain: (i) when the claim form had expired; (ii) the steps taken to serve before expiry; (iii) what, if any, difficulties had been encountered; (iv) what was done to resolve them; or (v) how it could be said that the Claimant had made the extension application promptly.
• The extension application was granted on the papers on 16 April 2025.

Judgment

• CPR 62.4(2) states that, “[u]nless the court orders otherwise an arbitration claim form must be served on the defendant within 1 month from the date of issue and rules 7.5 and 7.6 are modified accordingly” (emphasis added). The Court dismissed the Claimant’s argument that this meant that the Claimant did not have to meet the extension criteria set out in CPR 7.6, and that the Court instead had a general discretionary power to extend time for service of an arbitration claim form.
• The Court found that the requirements in CPR 7.6(3)(b) were not met, because the Claimant had not taken all (or any) reasonable steps to serve the claim form before expiry and had not acted promptly in applying for the extension.
• The Claimant had argued that the claim form could not be served on the Defendant prior to the WWFO being granted, as this would defeat the point of a without notice application. The Court said this reflected the failure of the Claimant’s representatives to understand: (i) the significance of the claim form, as the document based on whose service the Court’s jurisdiction is founded; and (ii) the mandatory requirement to serve an arbitration claim form within one month of its issue.
• Further, the Claimant had made material non-disclosures to the Judge when applying for the WWFO and for the extension. The Judge should have been told that the claim form had already expired and should have had the requirements of CPR 7.6(3) brought to her attention. Applicants for without notice relief owe a duty of utmost good faith to disclose all material facts, i.e. facts which might reasonably affect the Judge’s decision.
• The Court found that the time for serving the arbitration claim form was not validly extended, and that the WWFO must be set aside because the Court did not have jurisdiction to grant it.

Key points to note 

• This case serves as a reminder of the importance of complying with the strict rules in place regarding service of the claim form.
• Just because an application in the claim is without notice does not mean that a claimant is not obliged to meet the strict requirements set out in CPR 7.6 including to take “all reasonable steps” to serve the underlying claim form in the specified time period.
• Applicants for without notice relief owe a duty of utmost good faith to disclose all material facts.

You can read the judgment in full here.