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In Petrochemical Logistics Limited, Mr Axel Krueger v PSB Alpha AG, Mr Konstantinos Ghertsos [2020] EWHC 975 (Comm) the English High Court considered whether it would be “just and convenient” to maintain two freezing injunctions against the Defendants in support of a London-seated LCIA arbitration. The court declined to continue either injunction, finding insufficient connection with England and Wales in relation to the first injunction (over the bearer shares of a Swiss company), and insufficient risk of dissipation in relation to the second (over shares and assets in a Dutch company). In considering the individual circumstances of the case, the court provided helpful analysis on the exercise of the court’s jurisdiction in support of English and foreign seated arbitral proceedings.

Background of the Dispute

The Claimants were Petrochemical Logistics Ltd ("Petrochemical"), a company registered in Gibraltar, and Mr Krueger. The Defendants were PSB Alpha AG ("PSB Alpha"), and Mr Ghertsos, PSB Alpha’s 100% shareholder at the relevant time. PSB Alpha, a company registered in Switzerland with shares in bearer form, was the 100% shareholder of Alpha Terminals BV ("Alpha Terminals"), a company registered in The Netherlands which owned land on which a storage terminal for oil and petroleum products was planned.

The Dispute arose in relation to two share purchase agreements. Under the first share purchase agreement dated 25 November 2019 ("November SPA"), Mr Ghertsos sold his 100% shareholding in PSB Alpha to Mr Krueger. While the circumstances were in dispute, Mr Gherstos did not deliver the bearer share certificates in PSB Alpha to Mr Krueger under the November SPA. Mr Krueger nevertheless purported to pass a shareholder resolution of PSB Alpha removing Mr Ghertsos as director and appointing himself. Mr Krueger then directed PSB Alpha to sell its shares in Alpha Terminals to Petrochemical under a second share purchase agreement dated 16 January 2020 ("January SPA").

A dispute arose around the validity of the January SPA and Mr Kruger’s authority over PSB Alpha. Meanwhile, PSB Alpha purportedly entered into an agreement to sell its shares in Alpha Terminals to AT Holdings BV (“AT Holdings”) and executed a deed of Transfer, updating the Dutch Trade Register accordingly.

Mr Krueger sought and obtained an attachment in the Dutch courts to prevent the disposition of the shares in Alpha Terminals to AT Holdings. However, Mr Krueger’s lawyers declined to accept instructions from him on behalf of PSB Alpha in light of the dispute regarding the transfer of the bearer shares and the attachment therefore expired on 13 March 2020. In parallel, the Defendants obtained an ex parte injunction from the Swiss courts against Mr Krueger which prevented him from "interjecting himself" in the business affairs of PSB Alpha. The Swiss injunction is being challenged by Mr Krueger.

On 13 March 2020, by way of ex parte application, the Claimants obtained injunctions from the English court prohibiting (1) the Defendants from disposing, transferring or dealing with the shares and assets of Alpha Terminals (”Injunction 1”); and (2) Mr Ghertsos from disposing, transferring or dealing with the bearer share certificate(s) of PSB Alpha (“Injunction 2”).

The court returned with both parties present to consider whether the two injunctions should be maintained.

High Court’s Analysis

The November SPA provided for Swiss law and Swiss-seated arbitration as the dispute resolution mechanism. Meanwhile, the January SPA provided for English law and London-seated arbitration. It was acknowledged that Injunction 1 related to pending English-seated arbitral proceedings and Injunction 2 to Swiss-seated proceedings. The injunctions were sought from the English court under section 44 of the Arbitration Act 1996 (“AA”) and/or section 37 of the Senior Courts Act 1981 (“SCA”) in support of both pending arbitrations.

Section 44(1) of the AA provides that “the court has for the purposes of and in relation to arbitral proceedings the same power of making orders about the matters listed below as it has for the purposes of and in relation to legal proceedings” including (under s44(2)(e)) the granting of an interim injunction. The court also noted that, pursuant to section 37 of the SCA, the High Court may grant an injunction “in all cases in which it appears to the court to be just and convenient to do so”.

Both parties accepted that the Claimants had a good arguable case. No point was taken as to whether damages were not an adequate remedy, but the court stated for the sake of completeness that the land ultimately held by Alpha Terminals was unique and, as a consequence, this part of the test would be considered met. The next question for the court to consider was whether the Claimants could show a real risk of dissipation of assets.

Risk of dissipation

The subject of Injunction 1 was the shares and assets of Alpha Terminals, a Dutch company. The shares in Alpha Terminals, according to the companies' register, were registered in the name of AT Holding BV. There were no grounds for believing that the shares of Alpha Terminals were, in practice, assets of the Defendants, and accordingly Injunction 1 “could not bite”. The Claimants had not demonstrated that there had been any "questionable conduct" on the part of AT Holding BV, which was an independent third party not linked with the Defendants, indicating that it would dissipate the assets. If that were incorrect and the shares did somehow remain assets of the Defendants, the Claimants had not shown a risk of dissipation on the part of the Defendants in relation to the shares in Alpha Terminals and/or its assets. Accordingly, Injunction 1 should not be continued in respect of the shares in Alpha Terminals and its assets.

The subject of Injunction 2 was the bearer shares in PSB Alpha. The court accepted that there was a real risk that Mr Ghertsos might transfer the bearer shares in PSB Alpha to a third party which would make it impossible for Mr Krueger to ratify the January SPA. There was sufficient evidence presented to the court to conclude that Mr Ghertsos had entered into the November SPA with Mr Krueger, but failed to transfer the bearer shares or update the share register.

Connection with England

Having been satisfied as to the risk of dissipation in relation to Injunction 2, the court turned to consider whether it should exercise its discretion to maintain the injunction. The subject of the injunction, the bearer shares in PSB Alpha, was the subject of arbitration with a Swiss seat. A sufficient connection with England and Wales was therefore required to justify the continuation of the injunction by the English court.

The Claimants maintained that there was sufficient connection because Mr Ghertsos was a British national, the January SPA provided for London–seated arbitration and there was a close connection between the two SPAs.  Further, the making of the order would not interfere with the Swiss arbitration, and the courts of the seat would have limited power to impose a meaningful restriction on the shares.  Meanwhile, the Defendants argued that Mr Ghertsos was domiciled outside the jurisdiction and had no assets in England. They also submitted that there was no evidence that the two SPAs were linked and that it was open to Mr Krueger to apply to the Swiss courts, where the bearer shares were believed to be located, for an attachment. Whilst an order of the English court might not interfere with the management of the Swiss arbitration, there would be a risk of overlapping orders being sought in the Swiss courts and there was no countervailing factor or sufficient connection which tipped the balance in favour of an order of the English court.

Having considered the parties’ arguments, the English court found that there was insufficient connection with the jurisdiction and declined to exercise its discretion to continue the injunction against Mr Ghertsos in respect of the shares in PSB Alpha.


This case involved a complex and heavily disputed set of facts and transactions. It was also a highly international dispute, involving parties and assets from a number of different jurisdictions, along with two different SPAs governed by different laws and with different arbitration clauses.

The decision serves as a useful reminder about the extent of the English court’s willingness to grant a freezing injunction in support of both English and foreign-seated arbitration. While the English court has broad powers to issue an injunction in support of a foreign-seated arbitration, the court must be satisfied that there is sufficient connection with the jurisdiction in order to exercise its discretion to do so. In this case, that requirement was not satisfied.

While the interconnected nature of the SPAs was disputed, the case is also perhaps a reminder of the benefit of ensuring consistent governing law and dispute resolution provisions in any series of related or connected transactions to ensure that any court or tribunal required to consider interim relief is able to act consistently in respect of the entire transaction.

For more information, please contact Nicholas Peacock, Partner, Vanessa Naish, Professional Support Consultant, Peter Chen, Associate, or your usual Herbert Smith Freehills Contact.

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Vanessa Naish

Professional Support Consultant, London

Vanessa Naish

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Vanessa Naish

Professional Support Consultant, London

Vanessa Naish
Vanessa Naish