A detailed examination of how ADGM Courts evaluate the “real risk of dissipation” test, the types of evidence that carry weight at the interim stage, and the common pitfalls applicants must avoid when seeking Worldwide Freezing Orders.
In applications for Worldwide Freezing Orders (“WFOs”) before the ADGM Courts, the requirement to demonstrate a real risk of asset dissipation 1is often the decisive factor. While a claimant may have a strong underlying claim on the merits, the court will not grant freezing relief2 unless it is satisfied that there is a genuine danger that the respondent will deal with assets in a manner that frustrates enforcement of a future judgment or arbitral award. This threshold reflects the exceptional nature of freezing orders and the court’s concern to avoid granting relief that is oppressive or disproportionate.
ADGM Courts, applying English common law principles under the ADGM Application of English Law Regulations 2015, have consistently emphasised that asset dissipation must be supported by objective evidence3, not speculation or generalised allegations. The focus of the inquiry is not whether the respondent is wealthy or mobile, but whether there is a real, not merely theoretical, risk that assets will be removed, concealed, or depleted before enforcement can take place. This approach aligns with the stance adopted by English courts and other leading common law jurisdictions, thereby reinforcing ADGM’s reputation as a reliable and principled forum for interim relief.
Accordingly, this cluster undertakes a focused examination of the concept of asset dissipation within the ADGM framework, analysing the evidentiary threshold applied by the ADGM Courts when assessing the risk of dissipation. It is intended to be read in conjunction with the pillar overview on Worldwide Freezing Orders in the ADGM (link), and alongside the related clusters addressing Chabra jurisdiction, enforcement considerations, and available defences. Together, these discussions provide a cohesive and structured understanding of the ADGM’s approach to interim asset preservation.
What Constitutes a “Real Risk of Dissipation” in ADGM
A “real risk of dissipation” exists where there is credible evidence that the respondent may take steps to place assets beyond the reach of creditors, whether deliberately or through conduct that has that practical effect. The risk must be established by reference to specific facts and circumstances, rather than inferred solely from the existence of a dispute or the quantum of the claim. ADGM Courts have adopted the orthodox common law position that the risk must be real and present, not remote or fanciful.
Importantly, the court does not require proof of dishonesty or bad faith4 in every case. While allegations of fraud or misconduct may strengthen an application, a risk of dissipation may also arise from patterns of asset movement, opaque ownership structures, or imminent corporate transactions. The ADGM Courts’ analysis aligns with established English authority, which holds that ordinary commercial dealings, even where they result in asset movement, do not in themselves justify the grant of freezing relief. However, where a respondent’s conduct goes beyond the normal course of business, either by its nature, timing, or structure or appears calculated to frustrate enforcement, the evidentiary threshold for dissipation risk may be satisfied5. This distinction preserves the balance between preventing abuse of interim relief and safeguarding the efficacy of enforcement, and has been consistently applied by the ADGM Courts in reliance on English common law principles.
Types of Evidence ADGM Courts Find Persuasive
When assessing dissipation risk, ADGM Courts place significant weight on concrete and contemporaneous evidence. Certain categories of evidence are consistently regarded as persuasive, particularly when they form part of a broader pattern of facts.
Evidence of asset transfers is frequently relied upon, especially where assets have been moved to related parties, offshore jurisdictions, or newly created entities without a clear commercial rationale. Sudden or unexplained transfers following the emergence of a dispute are likely to attract close scrutiny6, as recognised in common law analyses of freezing injunctions.
Corporate restructuring can also support an inference of dissipation risk, particularly where it involves the stripping of assets from operating entities, hurried reorganisations, or changes to shareholding and control structures. While restructuring is not inherently improper, ADGM Courts will examine timing, transparency, and economic substance to determine whether such actions pose a real risk to enforcement.
The existence of offshore accounts or complex international asset holdings may further strengthen an application where combined with evidence of limited transparency or prior asset movement. Courts recognise that offshore structures, while lawful, can facilitate rapid asset relocation if misused. The ease with which assets can be moved across borders is a relevant consideration in freezing order applications.
Finally, past conduct plays a significant role. A history of non-compliance with court orders, evasive behaviour, inconsistent explanations regarding asset ownership, or prior attempts to defeat creditors may collectively establish a pattern that supports the existence of a real dissipation risk. Courts are entitled to draw inferences from such conduct, even where no single act is determinative.
Common Mistakes Applicants Make in Dissipation Arguments
One of the most common errors applicants make is relying on bare assertions or generalised fears of dissipation without evidentiary support. ADGM Courts have made it clear that the seriousness of the allegations or the size of the claim does not, in itself, justify freezing relief. Assertions that a respondent is “untrustworthy” or “likely to move assets” must be anchored in objective facts.
Another frequent mistake is conflating ability to dissipate assets with a risk of dissipation. The mere fact that a respondent has international assets or access to offshore banking does not automatically establish risk. Courts require evidence that the respondent is likely to exercise that ability in a manner that undermines enforcement, a distinction consistently highlighted in common law jurisprudence.This distinction has been consistently highlighted in common law jurisprudence to prevent freezing relief from being granted on the basis of status, wealth, or international mobility alone. Courts have repeatedly cautioned that the existence of an ability to move assets such as holding assets across multiple jurisdictions or maintaining offshore banking arrangements is a neutral commercial fact in modern international trade, and does not, without more, give rise to a real risk of dissipation. What is required is evidence of conduct, intention, or circumstances from which the court can objectively infer that the respondent is likely to deploy that ability so as to frustrate enforcement, rather than merely possessing it. By insisting on this distinction, courts preserve the exceptional nature of freezing orders and ensure that interim relief is directed at preventing abuse of enforcement processes, rather than penalising respondents for legitimate cross-border commercial structures.
Applicants also sometimes undermine their own case by failing to present evidence in a coherent and proportionate manner. Overreliance on voluminous documentation without a clear narrative may obscure, rather than clarify, the alleged risk. Equally, the selective disclosure or omission of relevant facts may breach the duty of full and frank disclosure under Part 25 of the Rules, as reflected in analogous provisions of the DIFC Courts’ Rules (RDC), thereby exposing the application to discharge and adverse costs consequences. In addition, the requirement that an applicant give a cross-undertaking in damages under the ADGM interim relief framework operates as a procedural safeguard, protecting the respondent where a freezing order is later found to have been unjustified or to have caused compensable harm.
Evidentiary Thresholds at the Interim Stage
At the interim stage, the evidentiary threshold for establishing dissipation risk is necessarily lower than at trial, but it remains exacting. Applicants are not required to prove dissipation on a balance of probabilities; rather, they must demonstrate a solid evidential basis for concluding that there is a real risk that enforcement will be frustrated. This assessment is forward-looking and risk-based, rather than determinative of liability.
ADGM Courts adopt a contextual approach, weighing the dissipation evidence alongside other factors such as the strength of the underlying claim, proportionality, and the availability of alternative remedies7. The court’s task is to determine whether freezing relief is necessary to preserve the status quo pending final resolution, consistent with the principles governing interim measures under the ADGM Court Procedure Rules and the ADGM Arbitration Regulations.
Where the evidentiary threshold is met, freezing relief may be granted swiftly and, in appropriate cases, on an ex parte basis. However, given the intrusive nature of WFOs, courts remain vigilant to ensure that the remedy is not used tactically or oppressively. This balancing exercise highlights the importance of meticulous evidentiary preparation and a strategic approach to legal representation when seeking freezing relief in ADGM.
Practical Evidentiary Considerations for Applicants and Respondents
From a practical standpoint, applicants seeking freezing relief before the ADGM Courts benefit from presenting dissipation evidence in a structured and contextual manner, including clear timelines mapping asset movements against key dispute milestones and thematic evidence bundles that demonstrate patterns of conduct rather than isolated transactions. Conversely, respondents can effectively rebut allegations of dissipation by providing contemporaneous commercial explanations for impugned transactions and by engaging in early, voluntary disclosure to demonstrate transparency and the absence of enforcement-defeating intent. Such an evidence-led approach assists the Court in distinguishing genuine dissipation risk from routine commercial activity, thereby reinforcing the principled application of worldwide freezing orders within the ADGM framework.
Proving a real risk of asset dissipation is central to the success of any Worldwide Freezing Order application before the ADGM Courts. Applicants must move beyond conjecture and present clear, objective evidence demonstrating that assets are genuinely at risk. By understanding the types of evidence that courts find persuasive, avoiding common pitfalls, and appreciating the evidentiary standards applicable at the interim stage, parties can significantly enhance their prospects of securing effective freezing relief. This analysis forms part of a broader discussion on Worldwide Freezing Orders in ADGM, with related cluster articles examining enforcement outside ADGM, Chabra jurisdiction, arbitration support, and defensive strategies.s.
