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The Mareva Injunction (THE CONDITIONS THAT MUST BE SATISFIED IN ORDER TO…
The Mareva Injunction
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PRACTICAL GUIDELINES
NONDISCLOSURE
The court has regard to the importance of any fact not disclosed and whether or not P was culpable for the non-disclosure
Bambrick v Cobley: Clarke J said 'the test by reference to which materiality should be judged is one of whether objectively speaking the facts could reasonably be regarded as material with materiality to be construed in reasonable and not excessive manner'
IF DUTY TO MAKE FULL AND FRANK DISCLOSURE NO OBSERVED- COURT MAY REFUSE TO GRANT MI OR SET ASIDE ONE ALREADY GRANTED
Bambrick v Cobley: Court has discretion to refuse to grant interlocutory injunction and to discharge already granted interim injunction Following factors appear to be the most likely to weigh with the court in such circumstances
- Materiality of the facts not disclosed
- Extent to which teh P is culpable in respect of failure to disclose
- Deliberate misleading of court likely to weigh more heavily in favour of discretion being exercised against the continuance of an injunction than an innocent omission
- The overall circumstances of the case which lead to the application in the first place
Third Chandris Shipping Corporation v Unimarine SA: Lord Denning set out 'the points which those who apply for a MI should bear in mind
THESE GUIDELINES ENDORSED BY SC IN O'MAHONY V HOGAN
- P should make full and frank disclosure of all matters in his knowledge which are material for the judge to know
- The P should give particulars of his claim against the D, stating a) ground of his claim and b) the amount thereof and c) fairly stating the points made against it by the D
- The P should give some grounds for believing the D has assets here
- The P should give some grounds for beliving there is a risk of the assets being removed before the judgement or award is satisfied
- The mere fact the D is abroad is not by itself sufficient
- The P must, of course, give an undertaking in damages, in case he fails in his claim or the injunction turns out to be unjustified
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EFFECT
The effect of a MI is to prevent D from dissipating or otherwise deling with his assets for the pirpose of defeating any judgement that P might obtain against him in a substantive action
DOES NOT CREATE A RIGHT IN REM-
i.e. a right in or against the property that is froxen
- Acts in personam- against D personally
- If D fails or refuses to comply with MI, he may be held in concetempt of court and imprisoned
Flightline Ltd v Edwards: A freezing order provides a mst efficient hold to prevnt the misapplication of those assets.. that is not enougth to create a secuirty rightBambrick v Cobley: Clarke J: It is trite to say that a P is not entitled to security for every claimed liability
- The Mareva injunction is not intended to provide Ps with security re claims in relaiton to which they are able to pass an arguability test
- The true basis of the jurisdiction is the exercise by the court of its inherent power to prevent parties from placing their assets beyond the likely reach of the court in the event of a successful action
CLASSIFICATION
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Usually granted BEFORE the trial of P's substantive action against D
- it is typcially interlocutory in nature
- but may also be awarded after P secured judgement against D in the substantive action and D seeking to frustrate judgement's execution
MI is an ancillary order
- It is used in support of a substantive claim
- e.g. claims that he is entitled to a money judgement against D and seeks a MI to ensure judgement executed
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Mareva Compani Naviera SA v International Bulcarriers:
Facts: P chartered a ship to D which was half monthly payments in advnce
- D which was based in India, fell into arrears
- It had money in a London bank account
- P succeeded in obtaining an interlocutory injunction restraining D from dissipating the money
Traditionally MI would be granted only if
- P had a subsisting cause of action against D in Ireland
- D eas based in another jurisdiction
- P proved he had a very strong case against D in the susbtantive action
2 and 3 abandoned in Fleming v Ranks
- Remarked a MI may be granted against d who is within the jurisdiction, and that P must prove that he has a good arguable case against D
Powerscourt Estates v Gallagher
Now well established that MI may be granted if P proves that:
- He has commenced, or is about to commence, a substantive action against D
- He has a good arguable case against D in the substantive action
- D has assets
- D intends to dissipate or otherwise deal with his assets for the puprose of defeating any judgement that P might otherwise obtain against him in the substantive action
- The balance of convenience lies in favour of granting MI
FORMAT OF APPLICATION
Ex parte
- if D knew of the application he might attempt to dissipate or otherwise deal with his assets prior to it
- Strict requirement P makes full and frank disclosure
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Disclosure Orders: In deciding whether or not to grant MI, the court may order D to disclose extent of his assets and their whereabouts