Equitable Remedies

1. WS 8
MAREVA INJUNCTIONS
Equitable Remedies

2.  Definition:
 Qua timet (because your fear) order that is prohibitive in nature
 A freezing order made in personam although it may operate in rem
 Temporarily freezes assets required to satisfy future court judgements
 Prevents the disposal of the assets before the trial, but does not allow P to
have control over the frozen assets
 Usually use in commercial matters, thus discovery is important
 Tracing may also be done to find out what are and where the assets of the
defendant is located
 History of MI
 Used in international trade/use of flags of convenience
 Order named after Mareva case but was granted in Nippon
 Used in maritime law it puts commercial opponent under pressure
because it freezes assets
 More necessary today because of upgraded ways to move money
 Cases:
 Mareva Case: Court granted exparte MI because of none payment of
a ship charter (monies were said to be in NY, however there London
bank account had money-jurisdiction is important)
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Jackie

3.  Nippon’s Case: Court froze assets in a London bank after time
charters defaulted on payment
 3rd Chandris Shipping v Unimarine: principle of the MI
 Claimant proceeds by stealth so as not to premept the action of the
defendant
 Def would find his accounts blocked, thus freezing order is a
powerful weapon in the hands of a reckless claimant
 Conditions of the grant:
 a. Court must have jurisdiction of the underlying dispute (The Siskina:
ship owned by Panama, insured in England, charter voyage to Italy, sunk
in Cyprus, bills governed by Italy: no legal/equitable right in England,
no pre-existing COA in England, so no MI (it was the only relief sought
so cannot allow service ex juris)
 b. Guidelines laid down in American Cyanamid (p202)
 1. Serious question to be tried (not to resolve conflict)
 2. Is damage adequate (would the defendant be able to pay)
 3. applicant’s undertaking
 4. Balance of convenience
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Jackie

4.  Guidelines not statutory and merely provides a flexible manner in
which the court may apply its discretion
 Purpose: enable the court to ensure that justice is done between the
parties
 c. An undertaking as to damage:
 P must give undertaking when seeking an injunction as a requirement
(Blue Town v Higgs)
 Undertaking is done by way of an affidavit contain security/bond
 MI will not be refused as a result of Ps impecuniosity or inadequacy
(Allen v Jambo Holdings)
 d. Full and frank disclosure; should have affidavit disclosing all material
information pertaining to the matter in the knowledge (what is known or
what should have been known along with undertaking) (Assios: no FFD,
no MI; Brinks v Elcombe: court exercised discretion and continued matter
even though there were no FFD. Prerogative of the court to continue or
start a new)
 Circumstances where jurisdiction of the court involved:
 MI may be ordered where: 4
Jackie

5.  a. There is an arguable case: (Rasu Maritima: no need for Mi to be
confined to the stronger case enough for a summary judgement but
should show and arguable case; Niedersachsen: meaning of arguable
case being more than barely capable...but not necessarily one that the
judge believe has more than a 50% chance)
 b. There is a real risk of assets being removed from the jurisdiction:
Rahaman v Abhu Taha: being aboard not sufficient, MI not to provide
security for claim because P has no control of the frozen assets))
 c. Risk of dissipation of the assets: Bare assertion that the defendant will
not honour the award is not sufficient. MI not security for claim – Third
Chandris Shipping v Unimarine)
 Subject matter of the MI
 MI covers: money, bank account, land, M/V, jewellery and other assets,
applies to any one who holds assets for the defendant (subject the same
rigours of the MI)
 Court considers the value of the assets (Rasu v Maritima: Value of the
scrap metal was nominal and so exercised discretion to grant MI, p209)
 a. Assets within jurisdiction (Allen v Jambo Holdings: personal injury
claim and defendants were prevented from removing assets from the
jurisdiction.
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Jackie

6.  b. Assets outside of the jurisdiction
 Court limits injunction within jurisdiction because:
 It is sufficient sanction to ensure compliance (Ashtiane v Kashi:
MI assets should be limited to those within the jurisdiction of the
court p211)
 Failure to comply would bar the defendant from defending the action
 Court should not make orders within the exclusive jurisdictions of
other countries
 Exception when the court would issue a worldwide MI:
 Defendant is amenable to the court’s jurisdiction over asset outside
the jurisdiction (in instances where there is fraud)
 Assets within jurisdiction is insufficient to satisfy the claim
 Foreign assets belonging to the defendant that runs the risk of
disposal
 Defendant will not be oppressed by a multiplicity of proceedings
 Derby & Co v Weldon: defendant did not disclose all assets, P
claim conspiracy to defraud, MI granted, not limited to assets
within court jurisdiction
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Jackie

7.  Action in Personam: Operation in Rem
 Personam
 MI prohibits defendant from removing the assets (attaches to
defendant)
 It gives no property rights over the assets
 No priority to creditors
 No attachment to defendants assets, beyond the claim
 Rem
 Operates in rem because it attaches to any effects of the defendant
(money/goods) within the jurisdiction of the court
 Every person with knowledge of the order must obey it (non-
compliance = contempt)
 MI not a security for claims (secure the process so that the assets
cannot be disposed so as to frustrate judgement)
 Ownership of assets and 3rd party rights:
 A) NO MI if it interferes substantially with 3rd parties (Galaxia
Maritima: P making demurrage claims that would affect innocent 3rd
party, No MI)
 3rd party who aids and abets is guilty
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Jackie

8.  Granting of injunctions court considers:
 Innocent 3rd party freedom of action must be protected – no
activity on bank/assets, everything should be freezed
 Expenses of 3rd party in complying with injunction should be
returned by the claimant
 notice must be served on 3rd party so they know what they can
/cannot do;
 not able to ID bank account P pays for a search
 Quantum: notice must contain the amount the defendant owes
(Galaxia maritima: P making claims on charter belonging to
innocent 3rd party)
 No lien, but creditors can set off even of defendants assets is
reduced below maximum (Oceania Case: provisions must be
within the order to allow the banks to set off, in respect of
facilities given to the defendant before the order
 B) only assets of te defendant can be included in MI
 3rd party affected can apply for variation
 Dispute of ownership of assets:
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Jackie

9.  Assets belonging to 3rd party must not be treated as though it
belong to the defendant.
 Assertion of assets belonging to 3rd party, court must enquire
 Court has discretion to further enquiry to be tried (SCF Finance Co
v Masri: court has power to do whatever is convenient....where
assets is alleged to be own by someone other than the defendant
 Position of the Defendant
 MI allowing defendenat to use a portion of the assets for living/legal
expenses up to stated amount inclusive of making payments to himself
(PCW (underwriting agencies) v Dixon)
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Jackie