The power of the court to preserve the assets of a defendant in a given case to be able to meet whatever judgment that may ultimately be given against him in the case is quite extensive. Whenever there is a real likelihood that a defendant will remove his assets from the country in which the suit is instituted or dispose of his assets in order to avoid paying the debt that may arise in the event of judgment being given against him, the Claimant may apply to the court for an order that all the Defendant’s assets, wherever they may be found around the world, be frozen. Such an order is commonly described as a Worldwide Freezing Order (WFO).
Although courts generally operate within their territorial jurisdiction but the effect of a WFO extends beyond the territorial jurisdiction of the court making the order. WFOs are however granted at the discretion of the court in very limited special circumstances and taking into consideration the nature of the dispute between the parties. Significantly, a WFO does not give the Claimant or Applicant any proprietary rights over the Defendant’s assets.
While Nigerian courts do not frequently grant WFOs, there is no doubt that they have the power to make such orders by virtue of the provisions of the various High Court Laws and Rules of Court. The power of the courts in Nigeria to grant worldwide freezing orders is traceable to the general powers of the courts to grant injunctions or interlocutory orders where it is just and convenient for the Court to do so. Also, such an order is made “in personam” to bind the defendant personally who is subject to the jurisdiction of the court making the order.
WFOs have been deployed by the Nigerian courts in a number of cases. In the celebrated case of EFCC v. Akingbola in 2009, the Federal High Court granted a worldwide freezing order in respect of the assets of the Defendant in Nigeria, Ghana, England and the United Arab Emirates. Since then WFOs have not only become a useful tool in the resolution of commercial disputes but also enjoy judicial patronage in Nigeria’s fight against corruption, terrorism and money laundering.
More recently, the Federal High Court in criminal proceedings involving a former Minister of Petroleum Resources granted orders freezing assets in Nigeria, Canada, Switzerland, England and the United States of America belonging to the Defendant.
A question that often arises is the extent of the effectiveness of WFOs on assets of the defendant which are outside the territorial jurisdiction of the court making the order.
For example, under the relevant laws governing reciprocity of enforcement of foreign judgments and orders in Nigeria particularly the Reciprocal Enforcement of Judgments Ordinance (the Ordinance) and the Foreign Judgment (Reciprocal Enforcement) Act (the Act), a 12 month period is provided for the registration of a civil judgment or order made by a foreign court. To be registrable in the Nigeria, a foreign judgment or order must be final and conclusive between the parties and must be for the payment of a monetary sum other than a tax, fine or item of a similar nature.
Registration of a judgment or order made in foreign criminal proceedings is also limited by the Act to a judgment or order made for the payment of a sum of money in respect of compensation or damages to an injured party.
Since WFOs are often in the nature of interlocutory orders and are made to freeze or prevent disposal of assets and not for the payment of money, the extent of the enforceability, in foreign countries, of such orders is of great concern.
On a final note, while WFOs are useful in strengthening an effective legal system, as they can help to provide tangible remedies to deserving litigants, it is important that a body of rules be developed to prevent abuse of such orders.