Les Ambassadeurs Club Ltd v Yu – A Freezing Order Case

Les Ambassadeurs Club Ltd v Yu (2021) EWCA Civ 1310

One of London’s most exclusive casino clubs found itself locked in a legal fight with a Chinese billionaire over £19 million in dishonoured cheques and gives business owners a good lesson on what happens when chasing an overseas debtor.

Read the full case at Les Ambassadeurs Club Ltd v Yu [2021] EWCA Civ 1310

For more information on Freezing Orders see our page Freezing Orders.

Five Nights Out That Cost £19 Million

Les Ambassadeurs Club, or “Les A” as its members fondly call it, is no ordinary casino. Nestled inside a grand Venetian Renaissance mansion at 5 Hamilton Place in Mayfair, it has hosted aristocracy, diplomats, and even James Bond (the 1962 film Dr. No was filmed there). Membership alone is one of the most sought-after in London’s elite social scene.

In 2014, a new member called Mr. Songbo Yu joined, a Chinese businessman who controlled the Herun Group, a substantial real estate empire operating out of Zhoushan, China. At the time, Forbes ranked Mr. Yu and his family at number 149 on China’s Rich List, with a net worth of $1.3 billion.

Between 27 April and 1 May 2018, just five days, Mr. Yu used a cheque-cashing facility at the club to purchase £19 million worth of gambling chips. He wrote a series of cheques to cover the sum and every single one of them bounced.

The Settlement That Fell Apart

Les Ambassadeurs didn’t rush to court immediately. Instead, in November 2018, the two sides negotiated a settlement agreement. Mr. Yu agreed to repay £16.54 million in instalments, but he failed to meet even the first payment, and under the terms of the agreement, the entire sum became due immediately.

The club issued proceedings in the Queen’s Bench Division of the High Court in December 2018. Because Mr. Yu was based in China, the court granted permission to serve documents through an unusual method, via Mr. Yu’s WeChat account, the Chinese messaging platform.

Mr. Yu began making payments, and by the end of December 2019, he had whittled down the outstanding balance to just under £6.54 million.

Les Ambassadeurs Club Ltd v Yu - freezing order case

Then… Silence

After those partial payments, Mr. Yu went quiet. Apart from a polite Lunar New Year greeting in January 2020, the club heard nothing. When solicitors sent him an amended claim form in both English and Chinese, Mr. Yu responded with a single WeChat voice message asking for a translation. He was told one had already been sent. That was the last anyone heard from him.

The club pressed on with its legal action. It applied for summary judgment, serving all papers on Mr. Yu through the previously approved channels. He didn’t respond and he didn’t show up. On 19 November 2020, the court entered summary judgment against him for over £10 million (the remaining principal, plus interest and costs).

The order was served on Mr. Yu in English on 25 November 2020, and a Chinese translation followed on 1 December 2020. Still, nothing.

The £10 Million Question: Where’s the Money?

With a judgment worth over £10 million and a debtor who had vanished into silence, Les Ambassadeurs faced every creditor’s nightmare. A judgment is only as valuable as your ability to enforce it. The club commissioned Kikkar Advisory to produce a “Worldwide Asset Review”, a professional investigation into Mr. Yu’s global holdings.

The report revealed that Mr. Yu likely held assets in England, Hong Kong, and other jurisdictions. He was also linked to Brocket Hall, a prestigious 540-acre estate in Hertfordshire featuring a conference centre and golf course though the evidence connecting him to the property was described as thin.

Mr. Yu was familiar with offshore and corporate structures, and the Herun Group was based in China, a jurisdiction where, the club argued, judgments on gambling debts are not enforceable.

The Freezing Order Application and Why It Was Denied

In April 2021, over four months after obtaining judgment, the club applied for a worldwide freezing order. This is one of the most powerful weapons available to a creditor in English law and it would have prevented Mr. Yu from moving, hiding, or disposing of his assets anywhere in the world.

A freezing injunction requires four things:

A good arguable case on the merits (already satisfied by the judgment).
A real risk that the debtor will dissipate assets.
Evidence that the debtor holds assets within the scope of the proposed order.
That it is just and convenient to grant it.

The club cleared hurdles one, three, and four comfortably but the battle was all about number two: could they prove a “real risk of dissipation”?

The Deputy High Court Judge, Mr. Peter Marquand, said no. He reviewed nine factors the club put forward, including the dishonoured cheques, the silent treatment, the use of offshore structures, and the Brocket Hall connection, and concluded there was “no more than a suspicion or a fear” that Mr. Yu would dissipate his assets. The freezing order was refused.

The Court of Appeal Weighs In

Les Ambassadeurs appealed, arguing the judge had set the threshold too high. The case was heard by Lady Justice Andrews, Lady Justice Nicola Davies, and Lord Justice Birss on 17 August 2021. Mr. Yu, once again, did not appear.

The Court of Appeal delivered a judgment that has become an important reference point for freezing injunctions in England and Wales. Lady Justice Andrews drew a critical distinction that every business owner should understand:

There is a difference between a debtor who can pay but refuses to until forced and a debtor who is so determined not to pay that he would actively take steps to frustrate recovery, such as transferring or concealing assets.

The court held that the judge had not made a legal error. Mr. Yu’s behaviour could simply be the actions of someone who doesn’t want to pay until enforcement makes him. That alone isn’t enough to justify a freezing order.

Why the Bounced Cheques Argument Didn’t Work

One of the club’s strongest cards was the £19 million in dishonoured cheques. The judge accepted that when Mr. Yu presented those cheques, he likely knew or suspected they would not be honoured.

But the Court of Appeal pointed out a crucial nuance. These cheques were not presented to settle an existing debt, they were drawn as security for original loans. And Mr. Yu had subsequently entered a settlement agreement and made substantial partial repayments. In context, the dishonoured cheques did not prove he was the type of person who would actively hide his assets.

The Brocket Hall Dead End

The club also pointed to the Brocket Hall saga. A company allegedly controlled by Mr. Yu had operated a business on the estate, racked up £6 million in debts (including £1.5 million to HMR.C), and then gone through pre-pack administration by selling the business to an associated company for just £100,000.

It looked suspicious. But the Court of Appeal noted the evidence connecting Mr. Yu to the entity was limited, relying largely on newspaper reports. The pre-pack administration was lawful at the time, and the administrators had concluded it would achieve a better result for creditors than winding up the company.

The Fact That Sank the Case

Perhaps the most devastating blow to the club’s application was that Mr. Yu had money sitting in bank accounts in England and Hong Kong. He knew about the judgment and over four months passed between the judgment being served and the freezing order application, yet he hadn’t moved a penny.

As Lady Justice Andrews put it, if someone has not moved their assets when they know a creditor has obtained judgment against them, and it would be easy to do so with money in a bank account , it becomes much harder to draw the inference that there is a real risk they would do so in future.

The appeal was dismissed unanimously.

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