Derby & Co Ltd v. Weldon No1 [1989] 1 Lloyd’s Rep 122

Derby & Co Ltd v. Weldon No1 [1989] 1 Lloyd’s Rep 122

The plaintiff companies sought substantial damages for, inter alia, breach of contract, negligence and breach of fiduciary duty, against the defendants who were former directors of some of the plaintiff companies. In response to the plaintiffs’ seeking Mareva injunctions within and outside the jurisdiction, the defendants denied that they had any, or any valuable, assets within the jurisdiction and they contested the court’s jurisdiction to grant an extra territorial Mareva injunction. At first instance, the plaintiffs succeeded in being granted a Mareva injunction in relation to assets within the jurisdiction but they failed to get one in relation to the assets outside the jurisdiction as this was said to be contrary to the court’s practice.

The Court of Appeal held, that

  1. this was a case ‘… which cries out for a worldwide Mareva injunction even though it is being sought before judgment. The amount involved and the findings of the judge [at first instance] … make this clear’ (per May LJ); and
  2. ‘… there is every justification for a worldwide Mareva, so long as, by undertaking or proviso or a combination of both, (a) oppression of the defendants by way of exposure to a multiplicity of proceedings is avoided, (b) the defendants are protected against the misuse of information gained from the ordinary order for disclosure in aid of the Mareva, and (c) the position of third parties is protected’ (per Parker LJ).

Apart from the remarkable trio of 1989 cases above, one 1990 case added the relatively minor points that English courts should, as a general rule, confine themselves to assets within the jurisdiction, unless, of course, England was the forum for the substantive dispute between the parties. The court wouldn’t normally grant an extraterritorial Mareva injunction where the plaintiff was seeking merely to enforce a foreign judgment in England. See Rosseel v. Oriental Commercial Shipping [1990] 1 WLR 1387. Indeed, Rosseel took a more cautious approach than in Derby v. Weldon (No.6) [1990] 1 WLR 1139, where the Court of Appeal had decided that, in the exercise of its Mareva jurisdiction, it had the power to order the transfer of the defendant’s assets from one jurisdiction to another.

The significance of Art 27(2) of the Brussels Convention is that Mareva injunctions are frequently made ex-parte and so it would appear that the advantage of surprise obtained by the plaintiff is nullified by his inability to enforce the judgment in other Contracting States. Denilauler v. Couchet Frères (Case 125/79) [1980] ECR 1553 is the ECJ authority for stating that an ex-parte order that is obtained in one Contracting State is not enforceable in another.

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