Locating funds is only half the battle. Securing them before a judgment is rendered can turn out to be where actual recovery is won or lost. This interim preservation stage is critical for ensuring that a favourable judgment remains enforceable when the litigation concludes. Two recent decisions help clarify the contours of that stage. The Court of Appeal in Continental Shipping Line Pte Ltd v Jonathan John Shipping Ltd [2025] 1 SLR 1191 clarifies what counts as a real risk of dissipation, a key threshold that decides freezing applications. A year later, the Court of Appeal of the Singapore International Commercial Court in KBP Biosciences Pte Ltd v Novo Nordisk A/S [2026] 1 SLR 767 clarified how far a defendant can rely on contested fraud allegations to resist one.
Three different tools
An asset freezing order (or Mareva injunction) tends to be the reflexive choice for most applicants. But the preservation stage in fact offers three distinct remedies, and the choice between them is not merely procedural.
A freezing injunction is the right tool where the claim is personal: the applicant restrains a defendant’s assets generally, pending judgment, without asserting any proprietary interest in them. However, parties must remember a critical limitation: a freezing order is not security. It does not grant priority over other creditors. It simply ensures there is a pool of assets left to enforce against when judgment is rendered. Further, it is not an absolute embargo. Ordinary business expenses, reasonable living costs, and legal fees are routinely permitted to continue. To obtain one, the applicant must show a valid cause of action, a good arguable case on the merits, assets within the jurisdiction (or grounds for worldwide relief), and a real risk of dissipation. The fourth requirement decides most contested applications, and it is where the two recent decisions shed light.
In Continental Shipping, the Court of Appeal set aside a worldwide freezing order because the defendant’s withdrawals from enjoined accounts, made openly and for staff salaries and office rent, were ordinary commercial dealings rather than evidence of dissipation. The Court clarified that cessation of business, an offshore structure, or a foreign domicile do not, without more, supply that evidence either.
In Novo Nordisk, the Court went the other way. The Court affirmed that the mere fact that fraud allegations are hotly contested in the substantive action does not, of itself, defeat a claim of a real risk of asset dissipation. The defendant’s own affidavit, asserting an entitlement to treat US$300 million in disputed sale proceeds as personal “fruits of success” regardless of the company’s liabilities, was itself treated as evidence of dissipation risk, independent of the underlying fraud allegations.
A proprietary injunction asks a narrower question, and rewards the claimant who can answer it with a stronger remedy. Rather than restraining the defendant’s assets generally, it fastens on a specific, identifiable asset in which the claimant asserts a proprietary interest, with the consequence that a subsequent transfer of that asset is capable of founding a constructive-trust claim against whoever receives it (with the exception of a bona fide purchaser for value without notice). A proprietary injunction requires a serious question to be tried and a balance of convenience favouring preservation. Its merits bar (a serious question to be tried) is less exacting than the good-arguable-case standard a freezing order demands, but that is not the same as saying a proprietary injunction is easier to obtain. It is available only where the claim is genuinely proprietary, so the applicant must additionally establish an arguable proprietary interest in the specific asset. A freezing order’s real difficulty lies in the separate real-risk-of-dissipation requirement, which has no counterpart in the proprietary analysis.
Chabra relief addresses a third and more specific difficulty: assets that would satisfy judgment are not in the defendant’s hands, but have been placed, often deliberately, with a third party, typically a spouse, nominee, or affiliate. The remedy is confined to that scenario: the third party must genuinely be holding the defendant’s assets, and the anticipated enforcement must be against those assets, not against the third party as a person. The Court in Oro Negro Drilling Pte Ltd v Integradora de Servicios Petroleros Oro Negro SAPI de CV [2020] 1 SLR 226 refused Chabra joinder of a lawyer implicated in the underlying events because he held no disputed assets. Joining him would have stretched the doctrine beyond its asset-based rationale, into a general-purpose tool for reaching anyone connected to the wrongdoing.
Opting for a freezing order when a proprietary claim is available can inadvertently risk priority over general creditors and traceable trust proceeds. Similarly, seeking Chabra relief against parties who do not genuinely hold the target assets can leave applications vulnerable to costly discharge proceedings.
The tools in an actual recovery
Three Arrows Capital Ltd v Davies [2024] SGHC 164 shows the disclosure and preservation stages operating as a single package rather than in sequence. The liquidators of Three Arrows Capital obtained a Singapore freezing order not only against Mr Davies but against his spouse, Ms Chen, on the footing that some of the Singapore assets in her name were held as his nominee (as well as on the basis of claims made against her personally). The freezing order was accompanied by an ancillary order requiring her to disclose those assets. When Ms Chen applied both to discharge the freezing order and to stay her disclosure obligations, the court dismissed both of her applications. The disclosure obligation was itself an integral part of the preservation package, not a separate courtesy that could be stripped away.
Why speed decides the outcome
Where a proprietary claim is available, the claimant has priority over the defendant’s general creditors and a constructive trust over the traceable proceeds, but only until the asset passes to a bona fide purchaser for value without notice, at which point the proprietary route closes and the claim converts into an ordinary personal one for a money judgment. In practice, timing is a critical commercial constraint rather than a mere tactical preference: an asset supporting a proprietary injunction today can slip out of reach tomorrow, converting a secured proprietary claim into an unsecured money judgment.
The duty of full and frank disclosure applies with particular force at the preservation stage, since it is here that a without-notice order does the most immediate damage to a respondent’s position. The applicant must put the points the defendant would raise, not only the points in its favour, and must be candid about why speed and surprise are truly needed. As highlighted in our previous article, failing to observe this standard can result in the entire order being discharged, regardless of how strong the underlying case may be.
The next article in this series turns to even more difficult cases of assets that have already left Singapore or never touched it at all. It will examine cross-border recovery, enforcing Singapore orders abroad, and the jurisdictional questions that arise when the asset trail, or the fraud itself, runs through more than one country.
