The plaintiff had obtained an asset freezing order against a defendant Panamanian Company, which now appealed saying that it was inappropriate to make such an order where the company had no assets in the jurisdiction.
Held: The appeal failed. In the event of disobedience there was sufficient sanction in that the court could bar the defendant from defending. It was not concerned to enquire whether or not the order was enforceable in Panama.
Where a Mareva Order is breached, or there is a real risk of such breach, the appropriate first remedy is the appointment of a receiver over assets which are subject to the Mareva order.
Lord Donaldson MR said: ‘Courts assume, rightly, that those who are subject to its jurisdiction will obey its orders . . It is only if there is doubt about whether the order will be obeyed and if, should that occur, no real sanction would exist, that the court should refrain from making an order which the justice of the case requires.
This consideration led the Vice-Chancellor to examine the extent to which a Mareva injunction could be enforced against [the defendant] in Luxembourg . . This certainly is deserving of examination but, in the context of the grant of the Mareva injunction, I think that a sufficient sanction exists in the fact that, in the event of disobedience, the court could bar the defendant’s right to defend. This is not a consequence which it could contemplate lightly as it would become a fugitive from a final judgment given against it without its explanations having been heard and which might well be enforced against it by other courts.’ and
‘In this situation I do not understand why the order that the assets vest in the receiver should only take effect if and when the order was recognized by the Luxembourg courts. True it is that CMI is a Luxembourg company, but it is a party to the action and can properly be ordered to deal with its assets in accordance with the orders of this court, regardless of whether the order is recognized and enforced in Luxembourg. The only effect of non-recognition would be to remove one of the potential sanctions for disobedience.’
Neill LJ said: ‘Section 37(1) of the Act of 1981 gives the High Court a similar jurisdiction to appoint a receiver to that conferred for the grant of an injunction. The remedies are of course separate remedies and in some cases it may be appropriate to grant only one of those remedies rather than both. I am quite satisfied, however, that in this case the judge was right to appoint a receiver . . as well as granting an injunction.’
Lord Donaldson of Lymington MR, Staughton, Neill LJJ
[1990] Ch 65, Times 09-Nov-1990, [1989] 2 WLR 412
England and Wales
Citing:
See Also – Derby and Co Ltd v Weldon CA 2-Jan-1989
The plaintiff sought damages for breach of contract, for negligence, breach of fiduciary duty and deceit and conspiracy. It sought a world-wide injunction.
Held: A freezing order (Mareva injunction) can be made in respect of assets which were . .
Endorsed – Babanaft International Co SA v Bassatne CA 30-Jun-1988
The court considered whether the state in which enforcement of a judgment will take place should be the place where the debt is situated upon which it is sought to execute.
Held: There was nothing to preclude English courts from granting . .
Appeal from – Derby v Weldon (No. 3) ChD 7-Nov-1988
The plaintiff alleged conspiracy to defraud in a sum in excess of andpound;25m. During the application for a freezing order the stance of the defendant had been one of ‘taciturnity’ and non-disclosure. But on the last day of the hearing it was said . .
See Also – Derby and Co v Weldon CA 2-Aug-1988
The court has a power to make a pre-judgment worldwide asset freezing order (a mareva injunction) on satisfaction of the following conditions: 1. That the defendant can be protected against too many and oppressive actions, 2. That he can be . .
See Also – Derby and Co v Weldon (No2) CA 2-Jan-1989
The plaintiff appealed against the refusal of a world-wide Mareva injunction.
Held: The appeal succeeded. Lord Donaldson of Lymington MR said: ‘We live in a time of rapidly growing commercial and financial sophistication and it behoves the . .
Cited by:
Cited – Motorola Credit Corporation v Uzan and others (No 2) CA 12-Jun-2003
World-wide freezing orders had been made under the 1982 Act. The defendants were members of a Turkish family with substantial business interests in the telecommunications industry. In breach of orders made in the US some defendants had sought to . .
Cited – Meadow v General Medical Council Admn 17-Feb-2006
The appellant challenged being struck off the medical register. He had given expert evidence in a criminal case which was found misleading and to have contributed to a wrongful conviction for murder.
Held: The evidence though mistaken was . .
See Also – Derby and Co Ltd And Others v Weldon And Others (No 9) ChD 25-Jul-1990
The court considered the application of rules relating to the discovery of documents to material held on computer: ‘the database of a computer, so far as it contained information capable of being retrieved and converted into readable form, and . .
See Also – Derby and Co Ltd v Weldon (No 8) CA 27-Jul-1990
There had been a lengthy and contentious process of discovery. Certain documents with legal professional privilege had also been handed over inadvertently. The plaintiff sought their return and an order against them being used.
Held: The . .
See Also – Derby and Co Ltd And Others v Weldon And Others (No 10) CA 1991
A document had been disclosed by mistake.
Held: The inspecting parties must have realised that the documents had been disclosed by mistake. Fairness on the opposite party is the basis for the courts to hold for a waiver of legal privilege.
Cited – JSC BTA Bank v A CA 19-Oct-2010
The court heard an appeal in private, against the order of Teare J imposing a receivership on the assets of Mr A pending the trial of claims made against him for misappropriations allegedly made by him while he was chairman of the claimant bank in . .
Cited – Masri and Another v Consolidated Contractors International Co Sal and Others ComC 3-Mar-2011
On notice hearing with regard to without notice receivership order. . .
Cited – JSC BTA Bank v Ablyazov and Others (Rev 1) ComC 24-Aug-2010
Application for an ‘unless’ order debarring the respondents from defending and entitling the claimant to enter judgment unless certain information and documents were provided. . .
Cited – JSC BTA Bank v Ablyazov and Others QBD 24-Aug-2010
When considering a strike out application, the judge should consider ‘the effect of making, or not making, the order sought on the overall fairness of the proceedings and the wider interests of justice as reflected in the overriding objective’. . .
Cited – Derby and Co v Weldon (No 6) CA 3-Jan-1990
The court considered its power to order transfer of assets from one jurisdiction (in this case Switzerland) to another in aid of a Mareva injunction.
Held: An order that assets be delivered or transferred to a receiver was a usual one.
Litigation Practice
Leading Case
Updated: 01 November 2021; Ref: scu.183515
