Worldwide Mareva Injunctions

DOIhttp://doi.org/10.1111/j.1468-2230.1991.tb00890.x
Published date01 May 1991
Date01 May 1991
THE
MODERN
LAW
REVIEW
Volume
54
May
1991
No.
3
Worldwide
Mareva
Injunctions
David
Capper*
For the first thirteen years of the Mareva injunction
it
was always assumed that
it
was a remedy restricted
in
scope to assets located within the territorial jurisdiction
of the English courts. This assumption has now been shattered, probably beyond
restoration, by four decisions
of
the Court of Appeal
in
the summer and early winter
of
1988
-
Babunafi International
Co
SA
v
Bassatne and Another,' Republic
of
Haiti
v
Dutdier,2 Derby and
Co
Ltd
v
Weldon
(No
and
Derby and
Co
Ltd
v
Weldon
(Nos
3
arid
4)4
-
when Mareva injunctions were granted restraining
defendants from disposing
of
assets held
in
any part of the world. The purpose of
this article is to examine these cases
in
order to ascertain how the obstacles to
worldwide asset freezing orders were overcome, to look at the circumstances
in
which such orders may now be granted and the terms and conditions upon which
they may be granted, and generally to consider what implications these new orders
have
in
the field of Mareva injunctions generally. There have been two further Court
of
Appeal cases concerning worldwide Mareva injunctions
-
Allied Trust Bank
Ltd
v
Sabih Mahmoud Shukri and Others5
and
Derby and
Co
Ltd
v
Weldon
(No
6)b
-
and reference
will
be made to these cases where appropriate.
0
bst
acles
There does not appear to have been any reported decision of any court
in
the United
Kingdom
in
which
a
Mareva injunction was applied for
in
respect of assets located
outside the jurisdiction of the court and where the court refused the application and
stated its reasons for doing so. Thus, the granting of Mareva injunctions
in
respect
of assets located outside the jurisdiction did not present any problems of overruling
or distinguishing previous decisions. There was probably some encouragement for
plaintiffs wishing to seek worldwide Mareva injunctions in the Court of Appeal's
decision
in
Hamlin
v
Hamlin'
where
it
was held that the court could make an order
under section
37(2)
of the Matrimonial Causes Act
1973
to prevent the disposal
*Lecturer in Law, Queen's University
of
Belfast.
I
[I9901 Ch
13.
2 119901
QB
202.
3
I
19901 Ch
48.
4
[
19901 Ch 65.
5
Firiuricinl
Tir~res,
14
Novenibcr
1989.
6
7lte
Times,
14
May
1990.
7
[
19861
Fam
1
I.
The
Mo~lertr
hv
Reviov
54:3
May
1991 0026-7961
329
The
Modern
Law
Review
[Vol.
54
of assets located
in
Spain. Indeed,
in
Australia three decisions of state courts
recognised the power to grant Mareva injunctions and ancillary orders
in
respect
of assets located outside the court's territorial jurisdiction. In
Ballabil Holdings Pty
Ltd
v
Hospital Products Ltd8
the New South Wales Court of Appeal held it could
grant a Mareva injunction to restrain disposal of assets located outside the jurisdiction
where those assets had been removed from the jurisdiction after the commencement
of proceedings, although the report does not make clear whether the assets were
removed to another Australian state or abroad. In
Coombs
and Barei Construction
Pty Ltd
v
Dynusty Pty Ltd9
a South Australian court granted a Mareva injunction
restraining the disposal of assets located outside South Australia when the evidence
revealed that the bulk of the defendant's assets were
in
other Australian states. In
Yundil Holdings Pty Ltd
v
Insurance
Co
of
North Americato
the High Court of
New South Wales made an order for costs against a plaintiff who had abandoned
a fraudulent claim at trial, and ordered the disclosure of the plaintiffs assets, including
assets located outside the jurisdiction, pending taxation of costs and enforcement.
Further, in
Asean Resources Ltd
v
Ka- Wah International Merchant Finance Ltd"
the High Court of Hong Kong granted a Mareva injunction and appointed a receiver
in
respect of shares held in a company in Singapore. These decisions, with the
exception
of
Asean Resources,
were cited
in
the first four Court
of
Appeal decisions
listed above, and were important
in
overcoming the obstacles lying
in
the way of
worldwide Mareva injunctions.
However, prior to
1988
there was at least a settled practice in England and Wales
against granting orders of this kind. Thus in
Ashtiani
v
Kashi12
the plaintiff had
already obtained a Mareva injunction covering assets within the jurisdiction when
he sought an order for discovery of the nature, value and whereabouts of the
defendant's assets wheresoever situated. In refusing
to
make such an order the Court
of Appeal stressed that an order for discovery of assets was ancillary
to
the granting
of
a Mareva injunction and, as the latter was restricted
to
assets located within the
jurisdiction, the order sought by the plaintiff was not ancillary to it, at least
so
far
as the discovery of assets located outside the jurisdiction was concerned.
The leading judgment was given by Dillon LJ. His Lordship said:
the basis
of
the jurisdiction (to grant a Mareva injunction), as
it
seems
to
me,
is
clearly limited
to
the assets within the jurisdiction
of
this court.13
This statement suggests that the obstacle to granting a worldwide Mareva injunction
is jurisdictional. However, Dillon LJ went on to say:
That limited territorial approach
to
the grant
of
Marcva injunctions as a matter
of
practice
is
confirmed
by
section
37
of
the Supreme Court Act
1981.14
This suggests that Mareva injunctions are not granted
in
respect of assets located
overseas as a matter of practice and not as a matter of jurisdiction. This is apparently
confirmed by a later passage where Dillon LJ states that
if
in a future case disclosure
of foreign assets is ordered on special grounds, the plaintiff should be required to
give an undertaking not to use the information disclosed without the consent
of
the
8
(1985l
1
NSWLR
155.
9
[I9861
42
SASR
413.
10
119861 7 NSWLR 571.
II
119871 LRC
(Comm)
835.
12
119871
QB
888.
13
ibid,
899.
14
ibid.
330

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