The law and practice of worldwide freezing orders and Russian-situated assets

When a counterparty begins moving assets across its Russian subsidiary network, the creditor's instinct is to seek a worldwide freezing order from an English court. The order is granted. It names Russian-situated bank accounts, real estate, and receivables. And then — for many creditors — the work of actually preserving those assets begins in earnest, against a Russian legal framework that neither recognises the English order directly nor offers a straightforward substitute. Foreign creditors who treat a worldwide freezing order as the end of the problem, rather than the beginning of the enforcement strategy, routinely find that Russian-situated assets have been dissipated before any parallel Russian interim measure is in place.

If you are a foreign creditor with Russian-situated assets under threat of dissipation — make an enquiry: info@vetrovpartners.com | WhatsApp/Telegram: +7 (983) 510-38-76

A worldwide freezing order issued by an English court is an in personam injunction. It binds the respondent personally, wherever that person or entity is located, and prohibits dealing with assets up to the stated ceiling. It is, in principle, one of the most powerful interim remedies available to a creditor in international litigation.

The jurisdictional reach of the order, however, is a function of English law and English contempt jurisdiction. It binds entities over whom the English court has personal jurisdiction. For a Russian company that has no presence in England, has not submitted to English jurisdiction, and whose assets sit within the Russian Federation, the English court's in personam order operates in a legal vacuum. Russian law does not give direct effect to foreign interim injunctions. The Russian arbitrazh courts — which handle commercial disputes between legal entities — have no mechanism for recognising and enforcing a foreign freezing order as such.

This does not render a worldwide freezing order without value in cross-border Russian asset recovery. Its value is indirect: it constrains the respondent's behaviour globally, it captures assets held through entities subject to English jurisdiction, and it creates a documentary and factual record that supports a parallel application in Russia. But it is not a substitute for Russian-law interim measures, and treating it as one is among the most consequential errors a foreign creditor can make when pursuing distressed assets in Russian law.

Russian civil and commercial procedure provides its own interim measures regime, broadly analogous to freezing relief in common law systems but operating through distinct procedural mechanics. Applications are made to the arbitrazh court with substantive jurisdiction over the underlying claim — or, in limited circumstances, to the court that will hear the recognition and enforcement proceedings.

The standard Russian interim measure for asset preservation is an arrest (arest) of the respondent's identified assets: bank accounts, real estate, securities holdings, or receivables due from named debtors. The application is made ex parte in most cases and the court has discretion to grant it on the same day, particularly where the applicant can demonstrate urgency and substantiate a risk of dissipation.

Under Russian insolvency legislation, preferential transfer claims may be brought for transactions completed up to three years before a bankruptcy filing — a window that creditors unfamiliar with Russian law frequently underestimate when assessing what interim measures are still available to them.

Russian procedure requires the applicant to identify the assets specifically. A Russian court will not grant a general asset freeze equivalent to the ceiling-based structure of an English worldwide freezing order. This specificity requirement has practical consequences: a foreign creditor must have traced, identified, and documented Russian-situated assets before the interim application is made. The tracing exercise is not optional — it is a prerequisite to effective relief under Russian law.

Security for the respondent's potential losses must also be considered. Russian courts typically require the applicant to provide counter-security — a bank guarantee or a deposit — calibrated to the value of the assets frozen. This adds a cost dimension to interim measure strategy that foreign creditors should factor into their recovery economics from the outset.

For assistance identifying and documenting Russian-situated assets before an interim application — make an enquiry: info@vetrovpartners.com | WhatsApp/Telegram: +7 (983) 510-38-76

Russian arbitrazh courts do not recognise foreign interim injunctions as enforceable orders. This position reflects both the absence of a bilateral treaty between Russia and most common law jurisdictions providing for interim measure recognition, and the more general principle that Russian procedural law applies to proceedings before Russian courts, regardless of the existence of a parallel foreign order.

"A worldwide freezing order obtained in London creates legal pressure on the respondent personally, but it creates no legal obligation on Russian banks, registrars, or counterparties — and no Russian court will enforce it as issued. The work of asset preservation in Russia requires a Russian procedural instrument from the outset." — Elizaveta Razina, Senior Lawyer, Practice Lead — IP Enforcement, Vetrov & Partners

There are two partial exceptions worth noting for foreign creditors operating in this space. First, where the foreign order is obtained from a court that has issued a final judgment that Russia will recognise — under a bilateral investment treaty or a treaty on legal assistance — the underlying judgment may be recognised, and interim measures ancillary to recognition proceedings may be available. Second, where the respondent is a party to ICAC (MKAS) proceedings in Moscow or RAC arbitration, interim measures may be sought from the arbitral tribunal itself, which has its own powers under Russian arbitration law. Neither route eliminates the need for a parallel Russian court application; both may supplement it.

In practice, the most effective approach for foreign creditors with Russian-situated assets is a concurrent strategy: the worldwide freezing order is pursued before the English court to capture globally-held assets and to constrain the respondent's broader behaviour; a simultaneous or immediately following application for arest is made to the relevant Russian arbitrazh court on the basis of specifically traced and documented Russian assets. The two instruments are complementary, not interchangeable.

The categories of Russian-situated assets most commonly the subject of interim preservation applications include: balances in accounts held at Russian credit institutions; real property registered in the Unified State Register of Real Property (EGRN); shares in Russian limited liability companies or joint stock companies, held through the corporate register; receivables due to the respondent from identified Russian debtors; and equipment or inventory held at identified Russian premises.

Tracing these assets before the application requires a combination of public registry searches and, where available, information obtained through the disclosure mechanisms attached to a worldwide freezing order. The disclosure obligations on a respondent subject to an English worldwide freezing order — to disclose the nature, value, and location of assets globally — are a significant and underused tool for generating the asset map that Russian procedure requires.

Russian public registries for real property and corporate shareholdings are accessible, though procedural restrictions on third-party access have tightened in recent years. For bank account identification, the picture is more complex: Russian banks do not disclose account details without either a court order or a formal inquiry from a Russian enforcement authority. This creates a sequencing problem for foreign creditors — they need bank account details to make a successful arest application, but obtaining those details independently requires a prior Russian court process. The standard solution is to focus the initial arest application on the assets that can be traced from public sources — real property, corporate stakes, identified receivables — and to use the enforcement proceedings to generate further disclosure of account information.

The asymmetry between the worldwide freezing order's global reach and its limited direct effect in Russia means that the enforcement strategy must be designed with Russian-law mechanics in mind from the moment a claim is contemplated — not retrofitted once the English order is in hand.

In practice, this means the following. First, before or simultaneously with the English freezing application, a Russian asset tracing exercise should be initiated using public registries and any available commercial intelligence. Second, the disclosure obligations under the worldwide freezing order should be actively enforced to generate a Russian asset map, with contempt sanctions held in reserve as leverage. Third, the Russian arest application should be filed on the basis of specifically identified assets, supported by evidence of the underlying claim and of the risk of dissipation — the same factual record that underpins the English application is largely usable before the Russian court, with appropriate translation and legalisation. Fourth, where the respondent has Russian corporate assets — shares in Russian entities — the interim measure should include a prohibition on participation in corporate governance decisions that might affect asset value, such as the approval of dividends, asset sales, or reorganisation resolutions.

In a recent matter, the firm acted for a European trade creditor whose Russian counterparty had begun a series of intragroup asset transfers ahead of an anticipated insolvency filing. The firm obtained an arest over identified real property and corporate stakes within the Russian arbitrazh court proceedings, coordinated with English counsel on the worldwide freezing order application, and succeeded in preserving assets sufficient to cover the principal debt. The matter resolved within fourteen months of instruction.

Foreign creditors who approach Russian asset recovery with a single-jurisdiction mindset — whether exclusively English or exclusively Russian — consistently achieve worse outcomes than those who treat the two regimes as complementary instruments requiring concurrent activation. The coordination overhead is real, but so is the recovery differential.

For a structured assessment of your Russian asset recovery position — make an enquiry: info@vetrovpartners.com | WhatsApp/Telegram: +7 (983) 510-38-76

• Worldwide Freezing Orders and Russian-Situated Assets: Legislative Update
• A Practical Guide to Worldwide Freezing Orders for Foreign Creditors in Russia
• Asset Tracing and Recovery in Russia: Practice Overview

Q: Will an English worldwide freezing order prevent a Russian company from dealing with its Russian bank accounts?

A: Not directly. An English worldwide freezing order binds the respondent personally through the contempt jurisdiction of the English court. A Russian company with no presence in England and whose accounts are held at Russian credit institutions is not subject to that contempt jurisdiction in any practical sense — and Russian banks are under no obligation to freeze accounts on the basis of a foreign court order. To preserve Russian bank account balances, a separate arest application must be made to the competent Russian arbitrazh court on the basis of specifically identified account details. The English order may generate disclosure obligations that help locate those accounts, but it does not itself freeze them.

Q: How quickly can a Russian arbitrazh court grant an interim asset freeze?

A: Russian arbitrazh courts can and do grant arest applications on an ex parte basis, sometimes on the day of filing or within a matter of days, where the applicant demonstrates urgency and substantiates a risk of dissipation. In practice, preparation of the application — which must identify assets specifically and include evidence of the underlying claim and the dissipation risk — typically takes one to two weeks for a well-documented matter. Courts in different circuits vary in their receptiveness to foreign creditor applications; the Siberian and Ural circuit courts handle a material volume of creditor-side commercial litigation and have developed a workable body of practice on interim measures in cross-border matters.

Q: Can a foreign creditor apply directly to a Russian court for interim measures, or must it have an existing Russian claim?

A: A foreign creditor may apply to a Russian arbitrazh court for interim measures in support of a claim that is either already pending before that court or is being brought there simultaneously. In limited circumstances — principally in connection with recognition and enforcement of a foreign judgment or arbitral award — interim measures may be sought as ancillary to the recognition proceedings themselves. Where the underlying dispute is subject to international arbitration at ICAC or the RAC, the arbitral tribunal also has power to order interim measures under Russian arbitration law. A foreign creditor whose underlying dispute will be resolved entirely in a foreign forum without any Russian recognition proceedings faces the most constrained position and should take early advice on how to establish the necessary jurisdictional anchor.

Q: What assets are most straightforward to freeze under Russian procedure?

A: Real property registered in the Russian State Register and corporate stakes in Russian limited liability companies or joint stock companies are the most tractable categories — both can be identified from public registries and are subject to registration-based freeze mechanisms that are well understood by Russian courts. Shares in joint stock companies held through a registrar are also freezable, though the process involves notifying the registrar as well as the court. Bank account balances are the most valuable asset class for creditors but also the hardest to identify without prior disclosure; the practical approach is to lead with real property and corporate assets in the interim application and to pursue account disclosure through the enforcement proceedings.

Q: What is the risk that Russian interim measures will be challenged or lifted by the respondent?

A: Russian procedure gives the respondent the right to apply to lift or vary an arest, and in practice respondents do challenge interim measures, sometimes successfully. The most common grounds for challenge are that the applicant has failed to establish a credible underlying claim, that the risk of dissipation has been overstated or is not evidenced, or that the value of frozen assets disproportionately exceeds the claimed debt. A well-prepared initial application — with solid evidence of the claim, documented evidence of dissipation risk, and a proportionate asset identification — substantially reduces the risk of a successful lift application. Counter-security provided by the applicant also reduces the court's receptiveness to lift applications based on disproportionality arguments.

Vetrov & Partners is a Russian boutique law firm established in 2009, recognised by Pravo-300 — Russia's principal legal directory — for eight consecutive years, and listed as a trusted adviser by the German Consulate General in Novosibirsk.

The firm's asset tracing and recovery practice advises foreign trade creditors, institutional investors, and distressed debt holders on the preservation and recovery of Russian-situated assets. This includes coordinating interim measures before Russian arbitrazh courts, supporting worldwide freezing order applications with Russian-law intelligence, and acting as local counsel in cross-border enforcement mandates. With over 1,000 matters handled since inception, the team brings direct partner involvement to every engagement — no matter is delegated below the level of the supervising lawyer named on the instruction.

Enquiries: info@vetrovpartners.com | WhatsApp / Telegram: +7 (983) 510-38-76 | t.me/vitvetcom

This publication is provided for informational purposes only and does not constitute legal advice under Russian or any other applicable law. The information herein should not be relied upon as a substitute for professional legal counsel tailored to your specific circumstances. Vetrov & Partners is a Russian-qualified law firm. For matters governed by foreign law or requiring local admission in another jurisdiction, we collaborate with trusted counsel in the relevant jurisdiction. For advice regarding your particular situation, please contact info@vetrovpartners.com.

— Elizaveta Razina Senior Lawyer, Practice Lead — IP Enforcement, Vetrov & Partners vetrovpartners.com/razina/