Pacific Maritime (Asia) Ltd. v Holystone Overseas Ltd. [2007] EWHC 2319 (Comm) (11 October 2007)

Pacific Maritime (Asia) Ltd. v Holystone Overseas Ltd. [2007] EWHC 2319 (Comm) (11 October 2007)

The appropriate sum for the freezing order is the best arguable case for damages, which is the cost of a new equivalent accommodation block delivered in Batan, assessed at $2,750,000 plus interest and costs ($3,200,000), plus a reasonable estimate for loss of use ($5,000,000), totaling $8,200,000. The arbitrator cannot act effectively to preserve assets, so the court's freezing order should continue. Security for the cross-undertaking should not be increased as it would risk stifling the claim and Holystone can easily provide security.

Citation
[2007] EWHC 2319 (Comm)
Parties
Claimant: Pacific Maritime (Asia) Ltd; Defendant: Holystone Overseas Ltd
Jurisdiction
England and Wales
Judgment Date
11 October 2007
Procedural Posture
Commercial Court Application (freezing Injunction) / Interlocutory Application to Vary Freezing Injunction
Outcome
Application to vary freezing order dismissed except as to quantum; freezing order continued at reduced sum; application to increase security for cross-undertaking refused.
Legal Topics
Freezing Injunctions, Damages for Breach of Contract, Arbitration Act 1996 S.44, Security for Undertaking in Damages
Commercial Law Arbitration Contract Law Freezing Injunctions Damages for Breach of Contract Arbitration Act 1996 S.44 Security for Undertaking in Damages

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Parties

Pacific Maritime (Asia) Ltd

Claimant

Holystone Overseas Ltd

Defendant

Procedural Posture

Commercial Court Application (freezing Injunction) / Interlocutory Application to Vary Freezing Injunction

Legal Issues

  1. 1 Whether the quantum of the freezing injunction should be reduced based on the correct measure of damages for breach of contract under the MOA and Addendum
  2. 2 Whether the court should remit the question of interim relief to the arbitrator now appointed
  3. 3 Whether security for the cross-undertaking in damages should be increased

Ratio Decidendi

The appropriate sum for the freezing order is the best arguable case for damages, which is the cost of a new equivalent accommodation block delivered in Batan, assessed at $2,750,000 plus interest and costs ($3,200,000), plus a reasonable estimate for loss of use ($5,000,000), totaling $8,200,000. The arbitrator cannot act effectively to preserve assets, so the court's freezing order should continue. Security for the cross-undertaking should not be increased as it would risk stifling the claim and Holystone can easily provide security.

Court Disposition

Application to vary freezing order dismissed except as to quantum; freezing order continued at reduced sum; application to increase security for cross-undertaking refused.

Orders

  • Freezing order continued at $8,200,000 (reduced from $4,000,000 asset cap to $8,200,000 claim cap)
  • Application to remit interim relief to arbitrator refused