English courts will not take freezing order breaches lightly, says expert, as Swiss businessman jailed

Safa Abdulla Al Geabury was ordered to pay the Ritz Casino in London £2.3 million to cover the cost of a gambling debt by the High Court in July 2015, after his cheque for gambling chips bounced when the casino attempted to cash it the next day. At the time, the High Court imposed a WFO due to the risk of dissipation of assets, and required Al Geabury to provide it with information regarding his assets and to swear an affidavit.

Al Geabury, who has since returned to Switzerland, did not attend the latest court hearing as he claimed that he was unable to afford travel and accommodation expenses. In his absence, the High Court found him to be in "serious contempt" of court for his deliberate failure to comply with the disclosure obligations, according to a Lawtel summary of the latest judgment.

Civil fraud and asset recovery expert Alan Sheeley of Pinsent Masons, the law firm behind Out-Law.com, said that disclosure orders were often made "ancillary" to WFOs and are often "crucial to the effectiveness" of a WFO. For this reason, both those applying for WFOs and those required to respond to one should take note of the latest ruling and "be fully aware of the potential consequences of non-compliance", he said.

"Those applying for a WFO should be given comfort by the ruling in this case: an English court is evidently willing to make a contempt of court finding if a respondent knowingly and deliberately fails to comply with the disclosure obligations set out in a WFO," he said. "The court's approach gives added bite to the use of a WFO to recover assets involved in a fraud and will place added pressure on respondents to ensure compliance."

"The ruling emphasises the lengths an English court will go to in their efforts to force respondents to comply with the terms of a WFO and to disclose details of their assets. The realistic threat of a custodial sentence for non-compliance highlights the usefulness of WFOs to those seeking to trace and recover the assets of individuals involved in a fraud," he said.

Victims of fraud can apply to the courts in England for a WFO in order to freeze assets located anywhere in the world. Where the order also contains an order for disclosure, the respondent will typically be given a short period of time in which to prepare a response setting out the nature, value and location of their assets.

In July, the court was told that Al Geabury had boasted in the past of owning $1 billion worth of Islamic art in Geneva. However, ahead of the present action he told the court in a written statement that he had been due to inherit the art which was owned by his uncle, and that he did not in fact inherit it.

Al Geabury had resisted the casino's action against him on the grounds that he had "a very severe and serious gambling addiction" that he was unable to control, and for which he was receiving treatment, according to the July judgment. Ruling against him, the court found that he had been "untruthful in a number of important respects" and that he had been "the author of his own misfortunes".

Mr Justice Spencer ruled that the "reputational and business consequences" of an "immediate custodial sentence" was appropriate in this case, given the seriousness of the breaches. However, he said that Al Geabury could be released in six months if he complies with the WFO promptly.