Polly Peck International Plc v Nadir (No 2): CA 19 Mar 1992

Appeal against the grant of a Mareva injunction.
Lord Donaldson MR said: ‘I therefore turn to the principles underlying the jurisdiction. (1) So far as it lies in their power, the Courts will not permit the course of justice to be frustrated by a defendant taking action, the purpose of which is to render nugatory or less effective any judgment or order which the plaintiff may therefore obtain. (2) It is not the purpose of a Mareva injunction to prevent a defendant acting as he would have acted in the absence of a claim against him. Whilst a defendant who is a natural person can and should be enjoined from indulging in a spending spree undertakes with the intention of dissipating or reducing his assets before the day of judgment, he cannot be required to reduce his ordinary standard of living with a view to putting by sums to satisfy a judgment which may or may not be give in the future. Equally no defendant whether a natural or a juridical person, can be enjoined in terms which will prevent him from carrying on his business in the ordinary way or from meeting his debts or other obligations as they come due prior to judgment being given in the action. (3) Justice requires that defendant by free to incur and discharge obligations in respect of professional advice and assistance in resisting the plaintiff’s claims. (4) It is not the purpose of a Mareva injunction to render the plaintiff a secured creditor, although this may be a result if the defendant offers a third party guarantee or bond in order to avoid such an injunction being imposed. (5) The approach called for by the decision in American Cyanamid Co. v. Ethicon Ltd[1975] UKHL 1; (1975) 1 All ER. 504, (1975) AC 396 has, as such, no application to the grant of refusal injunction which proceeds on principles which are quite different from those applicable to other interlocutory injunctions.’

Lord Donaldson MR, Stocker, Scott LJJ
[1992] EWCA Civ 3, [1992] 4 All ER 769, [1993] BCLC 187, [1992] 2 Lloyds Rep 238
England and Wales
Cited by:
See AlsoPolly Peck International Plc v Nadir and Others CA 17-Mar-1993
For a bank to be sued for breach of trust after receipt of funds, it was not necessary to show that the bank knew of the fraud, but rather that it knew the funds were trust funds, and that they were being misapplied. A Mareva injunction should be . .

Lists of cited by and citing cases may be incomplete.


Updated: 22 January 2022; Ref: scu.262623