Mareva injunction
Encyclopedia
The Mareva injunction (variously known also as a freezing order, Mareva order or Mareva regime), in Commonwealth
jurisdictions, is a court order
which freezes assets so that a defendant
to an action
cannot dissipate their assets from beyond the jurisdiction
of a court so as to frustrate a judgment. It is named for Mareva Compania Naviera SA v International Bulkcarriers SA [1975] 2 Lloyd's Rep 509, decided in 1975, although the first recorded instance of such an order in English jurisprudence was Nippon Yusen Kaisha v Karageorgis in 1975, decided very shortly before the Mareva decision; however, in the UK the Civil Procedure Rules 1998
now define a Mareva order as a "freezing" order. It is widely recognised in other common law jurisdictions and such orders can be made to have world-wide effect. It is variously construed as part of a court's inherent jurisdiction to restrain breaches of its process
.
It is not a security (Jackson v Sterling Industries Ltd), nor a means to pressure a judgment debtor (Camdex International Ltd v Bank of Zambia (No. 2)), nor does it confer a proprietary interest in the assets of the judgment debtor (Cretanor Maritime Co Ltd v Irish Marine Management Ltd). However, some authorities have treated the Mareva injunction as an order to stop a judgment debtor from dissipating his assets so as to have the effect of frustrating judgment, rather than the more strenuous test of requiring an intent to abuse court procedure. An example of the former would be paying off a legitimate debt (Iraqi Ministry of Defence v Arcepey Shipping Co SA), whereas an example of the latter would be hiding the assets in overseas banks on receiving notice of the action.
It is recognised as being quite harsh on defendants because the order is often granted at the pre-trial stage in ex parte
hearings, based on affidavit
evidence alone. A Mareva injunction is often combined with an Anton Piller order
in these circumstances. This can be disastrous for a defendant as the cumulative effect of these orders can be to destroy the whole of a business' custom by freezing most of its assets and revealing important information to its competitors.
A freezing order will usually only be made where the claimant can show that there was at least a good arguable case that they would succeed at trial and that the refusal of an injunction would involve a real risk that a judgment or award in their favour would remain unsatisfied (Ninemia Maritime corporation v Trave Schiffahrtgesellschaft m.b.H und Co.K.G [1983] 1 WLR 1412).
Similar provisions are now required to be available in the rest of Europe, under Article 9(2) of the European Union Directive on the enforcement of intellectual property rights
, approved in April 2004.
Commonwealth of Nations
The Commonwealth of Nations, normally referred to as the Commonwealth and formerly known as the British Commonwealth, is an intergovernmental organisation of fifty-four independent member states...
jurisdictions, is a court order
Injunction
An injunction is an equitable remedy in the form of a court order that requires a party to do or refrain from doing certain acts. A party that fails to comply with an injunction faces criminal or civil penalties and may have to pay damages or accept sanctions...
which freezes assets so that a defendant
Defendant
A defendant or defender is any party who is required to answer the complaint of a plaintiff or pursuer in a civil lawsuit before a court, or any party who has been formally charged or accused of violating a criminal statute...
to an action
Lawsuit
A lawsuit or "suit in law" is a civil action brought in a court of law in which a plaintiff, a party who claims to have incurred loss as a result of a defendant's actions, demands a legal or equitable remedy. The defendant is required to respond to the plaintiff's complaint...
cannot dissipate their assets from beyond the jurisdiction
Jurisdiction
Jurisdiction is the practical authority granted to a formally constituted legal body or to a political leader to deal with and make pronouncements on legal matters and, by implication, to administer justice within a defined area of responsibility...
of a court so as to frustrate a judgment. It is named for Mareva Compania Naviera SA v International Bulkcarriers SA [1975] 2 Lloyd's Rep 509, decided in 1975, although the first recorded instance of such an order in English jurisprudence was Nippon Yusen Kaisha v Karageorgis in 1975, decided very shortly before the Mareva decision; however, in the UK the Civil Procedure Rules 1998
Civil Procedure Rules 1998
The Civil Procedure Rules are the rules of civil procedure used by the Court of Appeal, High Court of Justice, and County Courts in civil cases in England and Wales...
now define a Mareva order as a "freezing" order. It is widely recognised in other common law jurisdictions and such orders can be made to have world-wide effect. It is variously construed as part of a court's inherent jurisdiction to restrain breaches of its process
Abuse of process
Abuse of process is a cause of action in tort arising from one party making a malicious and deliberate misuse or perversion of regularly issued court process not justified by the underlying legal action.It is a common law intentional tort...
.
It is not a security (Jackson v Sterling Industries Ltd), nor a means to pressure a judgment debtor (Camdex International Ltd v Bank of Zambia (No. 2)), nor does it confer a proprietary interest in the assets of the judgment debtor (Cretanor Maritime Co Ltd v Irish Marine Management Ltd). However, some authorities have treated the Mareva injunction as an order to stop a judgment debtor from dissipating his assets so as to have the effect of frustrating judgment, rather than the more strenuous test of requiring an intent to abuse court procedure. An example of the former would be paying off a legitimate debt (Iraqi Ministry of Defence v Arcepey Shipping Co SA), whereas an example of the latter would be hiding the assets in overseas banks on receiving notice of the action.
It is recognised as being quite harsh on defendants because the order is often granted at the pre-trial stage in ex parte
Ex parte
Ex parte is a Latin legal term meaning "from one party" .An ex parte decision is one decided by a judge without requiring all of the parties to the controversy to be present. In Australian, Canadian, U.K., Indian and U.S...
hearings, based on affidavit
Affidavit
An affidavit is a written sworn statement of fact voluntarily made by an affiant or deponent under an oath or affirmation administered by a person authorized to do so by law. Such statement is witnessed as to the authenticity of the affiant's signature by a taker of oaths, such as a notary public...
evidence alone. A Mareva injunction is often combined with an Anton Piller order
Anton Piller order
In English and English-derived legal systems, an Anton Piller order is a court order that provides the right to search premises and seize evidence without prior warning...
in these circumstances. This can be disastrous for a defendant as the cumulative effect of these orders can be to destroy the whole of a business' custom by freezing most of its assets and revealing important information to its competitors.
A freezing order will usually only be made where the claimant can show that there was at least a good arguable case that they would succeed at trial and that the refusal of an injunction would involve a real risk that a judgment or award in their favour would remain unsatisfied (Ninemia Maritime corporation v Trave Schiffahrtgesellschaft m.b.H und Co.K.G [1983] 1 WLR 1412).
Similar provisions are now required to be available in the rest of Europe, under Article 9(2) of the European Union Directive on the enforcement of intellectual property rights
Directive on the enforcement of intellectual property rights
Directive 2004/48/EC of the European Parliament and of the Council of 29 April 2004 on the enforcement of intellectual property rights is a European Union directive in the field of intellectual property law, made under the internal market provisions of the Treaty of Rome...
, approved in April 2004.