The Court of Appeal gave judgment last week in JSC BTA Bank v Ablyazov [2013] EWCA Civ 928. Two questions arose (in the context of the standard Commercial Court form of freezing order prohibiting the disposing, dealing with or diminishing the value of assets): [1] Does a contractual right to draw down under an unsecured loan facility qualify, either generally or in particular circumstances, as an "asset" for the purposes of the order? [2] If the right to draw down is an asset, does the exercise of the right by directing the lender to pay the sum drawn down to a third party constitute "disposing of" or "dealing with" the asset? At first instance the trial judge answered no to both of these questions (see [2011] EWHC 2664 (Comm)). The Court of Appeal reached the same conclusion.
Monday, 29 July 2013
UK: England and Wales: is the right to draw down under an unsecured loan facility an asset?
The Court of Appeal gave judgment last week in JSC BTA Bank v Ablyazov [2013] EWCA Civ 928. Two questions arose (in the context of the standard Commercial Court form of freezing order prohibiting the disposing, dealing with or diminishing the value of assets): [1] Does a contractual right to draw down under an unsecured loan facility qualify, either generally or in particular circumstances, as an "asset" for the purposes of the order? [2] If the right to draw down is an asset, does the exercise of the right by directing the lender to pay the sum drawn down to a third party constitute "disposing of" or "dealing with" the asset? At first instance the trial judge answered no to both of these questions (see [2011] EWHC 2664 (Comm)). The Court of Appeal reached the same conclusion.
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