What Is A Mareva Injunction?

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What Is A Mareva Injunction?

October 6, 2020 Corporate & Commercial Disputes 0

What is a Mareva Injunction

A Mareva injunction is a court order which temporarily restrains the party being sued (defendant) from disposing of his/ her assets until the determination of the case between the suing party (plaintiff) and the defendant. In PCW (Underwriting) Agencies Ltd v Dixon & Anor, the court noted that the sole purpose or justification for the Mareva order is to prevent the plaintiffs being cheated out of the proceeds of their action, should it be successful, by the defendant either transferring his assets abroad or dissipating his assets within the jurisdiction.

The law in regards to this topic

Statute i.e. written law

Question: Where can the written law be found?
Answer: Under Order 29 Rule 1 of the Rules of Court 2012.

Question: How to apply for a Mareva injunction?
Answer: File a notice of application supported by an affidavit.
**Note** In most cases, the application:

  1. Is made ex parte (i.e. made without notifying the defendant and without requiring the defendant to be present in court).
  2. Is filed even before the plaintiff file a suit against the defendant in court.

Question: What must be written in the application?
Answer: The affidavit must contain:

  1. The facts giving rise to the claim;
  2. The facts giving rise to the application for interim injunction;
  3. The facts relied on to justify the application ex parte, including details of any notice given to the other party or, if notice has not been given, the reason for not giving notice;
  4. Any answer by the other party (or which he is likely to assert) to the claim or application;
  5. Any facts which may lead the Court not to grant the application ex parte or at all;
  6. Any similar application made to another Judge, and the order made on that application; and
  7. The precise relief sought.

Question: What happened next/ what should an applicant do/ What to take note of if a Mareva injunction is granted by the court?
Answer: Assuming a Mareva injunction is granted:

  1. The order will automatically lapse after 21 days
  2. The order must be served within 7 days after it is granted.
  3. If the application is made before a suit is filed in court, the suit must be filed and issued within 2 days of the granting of the order/ such period as the court sees fit.


Case law i.e. common law

Question: What happens if the suit is not heard within 21 days?
Answer: The plaintiff should apply for a fresh injunction (RIH Services (M) v Tanjung Tuan Hotel).

Question: What must the plaintiff show in order to convince the court to grant an injunction?
Answer: 

  1. The plaintiff has a fair chance of winning in the suit (Larut Consolidated Bhd & Anor v Khoo Ee Bee & Ors).
  2. There is a real risk that the defendant will dispose of his assets.
  3. The injunction (or the affidavit in support of the application) must provide for the defendant’s living expenses and legal cost.
  4. The sum that is frozen must not be more than necessary.
  5. All material facts must be disclosed
  6. The defendant’s assets are within Malaysia (Ang Chee Huat v Engelbach Thomas Joseph). However, the court can also grant a worldwide Mareva injunction in favor of the plaintiff if the defendant’s assets are not situated in Malaysia (Metrowangsa Asset Management Sdn Bhd & Anor v Ahmad B Hj Hassan & Ors).
  7. The plaintiff undertakes to pay the defendant damages in the event he/ she losses his/ her suit against the defendant (Tsoi Ping Kwan v Loh Lai Ngoh).

 

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