Mareva Injunction

Mareva Injunction:  Injunction Restraining Disposal of Assets-

‘Mareva’ injunction is an injunction granted where it appears likely that the plaintiff would recover judgment against the defendant fort a certain or approximate sum and there is reason to believe that the defendant has the assets within the jurisdiction to meet the judgment but may deal with the same, so that they would not be available or traceable when the judgment is given against him. One of the basic criteria for the grant of the Mareva Injunction is that the assets must be located within the jurisdiction to confer jurisdiction on the court to grant the Mareva Injunction (Popular Jute Exchange Limited v. Murlidhar Ratanlal Exports Ltd., 2006 CHN).

A Mareva injunction, deriving its name from a case with the same name (Mareva Comania Naviera S.A. v. International Bulkcarriers SA, Mareva, 1980 AII ER), is an ex parte oral interlocutory injunction issued to prevent a defendant from disposing of assets in order to defeat in judgment. This power derives itself not from the territorial jurisdiction of the court over assets in the country, but on the unlimited jurisdiction of an English Court in personam against any person, whether an individual or à corporation which is, under English procedure, property made a party to proceedings in an English court. The purpose of the Mareva jurisdiction is not in any way to improve the position of claimants in insolvency, but simply to prevent the injustice of a defendant placing assets which might otherwise have been available to satisfy judgment out of the reach of
the plaintiff (Iraqi Ministry of Defence v. Arcepey Shipping Co. S.A. The Angel Bell, 1981 QB).

It differs from an attachment în that it merely restrains the owner from dealing with the assets in certain ways (Cretanor Maritime Co. Ltd. v. Irish Marine Management Ltd. 1978 All ER). It does not have any in rem effect on the assets themselves of on the defendant’s title to them (Derby & Co. Ltd. V. Weldon 1990 CH). Such an order, which may be passed before or after the judgment, and against a defendant within or outside the country, may restrain him from removing assets out of jurisdiction, or disposing them of, or otherwise dealing with them within the jurisdiction in a manner as to place them beyond the reach of the plaintiff (Barclay Johnson v. Yuill 1980 AII ER).

A Mareva injunction may be granted when (Halsbury’s Laws of England, Vol. 2, 5th Edition),

(a) it appears likely that the plaintiff will recover judgment against the defendant for a certain or approximate item; and

(b) there are also reasons to believe that the defendant has assets to meet the judgment in whole or in part but may well take steps designed to ensure that these are no longer available or traceable when judgment is given against him, or where given after judgment, there are grounds for believing that the judgment debtor will dispose of assets to avoid execution. The plaintiff is required to given an undertaking in damages in case he fails in his claim, or the injunction turns out to be unjustified.

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