Mareva injunction is one of the most commonly used procedures in legal proceedings in Malaysia. This article explains what it is, the principles, and how to apply for it.
What is a Mareva injunction?
A Mareva injunction is a court order preventing a party from dealing with particular assets while a legal case is ongoing. This is to ensure that a judgment can be enforced.
The assets that can be included or frozen include shares, funds in bank accounts, and other assets and the order usually lasts for a limited period until the end of court proceedings.
Under the Specific Relief Act 1950 and Courts of Judicature 1964, our High Court is given the power under its inherent jurisdiction to grant injunctions. Injunctions are court orders given to order someone to do something (known as ‘mandatory injunctions’) or prohibit them from doing certain acts (known as ‘prohibitory injunctions’).
On the ‘Mareva injunction meaning’, it is an injunction order granted for preservation and prevents the dissipation of relevant assets until the end of the legal proceedings. If the party transfers away the assets before any court orders are given, the consequence is that the judgement is a mere paper judgment as the losing party has no assets to satisfy the judgment.
It is usually used when there are commercial disputes for payment of outstanding debts between the parties in litigation proceedings and is also more commonly applied when:
Foreign defendants: There is a foreign defendant in the case, as it may not have any more assets in Malaysia to satisfy the judgment
Dishonest party: When the defendant shows a tendency to frustrate the court process and justice by dealing with his assets, including transfer and sale.
Conditions For Obtaining a Mareva Injunction
The principles for granting a Mareva injunction were stated in the English Court of Appeal case of Mareva Compania Naviera SA v International Bulkcarriers SA [1980] 1 All ER 213. And these principles were adopted in our country by the case of Creative Furnishing Sdn Bhd v. Wong Koi [1989] 1 MLRA.
In that case, the judge held there are 3 conditions for granting a Mareva injunction, which are:
Good arguable case
The plaintiff can show that he has a good arguable case against the opposing party, the defendant in that legal action. This does not mean he will succeed, but only that he has reasonably good claims to succeed in the legal proceedings.
There are assets within Malaysia
It means that the opposing party, the defendant, has assets within the jurisdiction.
There is a real risk of dissipation of assets
To show real risk, then the applicant is to show that the defendant's assets are about to be moved away or there is a high possibility of the defendant absconding before the trial to run away from the liability
The Court of Appeal case of Biasamas Sdn Bhd & Ors v. Kan Yan Heng & Anor [1998] 2 MLRA 150 had also adopted the above principles.
How to apply for Mareva Injunction
The procedure to apply for a Mareva injunction is under the Rules of Court 2012. In urgent cases, the parties can follow the below steps:
Apply for ex-parte Mareva injunction to the High Court
In urgent cases, the applicant can apply ex-parte to the High Court. Ex-parte means to apply for the order unilaterally without the other party. The court documents to be submitted include a notice of application and an affidavit in support.
The documents should state the dispute between the parties, such as outstanding payment and an undertaking by the applicant for damages if he should lose in the trial later on.
Granting of ex-parte order
If the court is satisfied with the ex-parte application, the court will grant the ex-parte order, which will last for 21 days, and the court then fixes an inter-parte hearing between the parties.
Inter-parte means the court will hear arguments from both parties, unlike ex-parte where the judge hears from one side only, which is the applicant.
Inter-parte hearing and order
The judge will hear arguments from both sides for the inter-parte hearing and then decide whether to allow or dismiss the application.
Trial and conclusion of court proceedings
Subsequently, the trial will be held for the parties to give evidence, and the court will deliver its decision on the court case. It is the responsibility and obligation of the parties to comply with the terms of the judgement.
If the parties fail to comply with the judgment such as not paying the judgment sum or legal costs in the order, they then are said to breach the order. Under the laws, the other party can apply for enforcement of the judgment through committal proceedings where the defaulting party can be found for contempt of court and sentenced to imprisonment
On the other hand, any party who is dissatisfied with the court order can instruct its solicitors to file an appeal to the higher court.
Anton Piller and Other Injunctions
Mareva injunction and Anton Piller often work together in court proceedings. Mareva injunction prevents dealing of assets, while Anton Piller allows a party to enter premises to raid and collect evidence, especially when there is concealment of evidence.
There are also other types of injunctions, such as the Erinford injunction and the Fortuna injunction. In the process of obtaining a potential judgment against the other party, the claimant or plaintiff can use different methods to ensure justice is served.
Conclusion
A Mareva injunction in Malaysia is an order to prevent the dissipation of assets pending the conclusion of legal proceedings. If you are looking for legal advice or a law firm, do contact us and we will assist you.
Frequently Asked Question
1. What is a Mareva injunction?
A Mareva injunction is an interlocutory injunction given by the court to prevent any dealing with the assets before the conclusion of legal proceedings.
2. What is the difference between Anton Piller and Mareva injunction?
An Anton Piller order allows a party to enter premises, search, and seize things and evidence. On the other hand, a Mareva injunction prevents the assets from being dealt with pending the conclusion of legal proceedings.
