Mareva Injunctions revisited

The legal tests for grant of a Mareva injunction or a freezing order are more detailed than the usual enquiry in grant of injunctions. These detailed factors (set out in Gee & Andrews, ‘Mareva Injunctions – Law and Practice’, 6^th edition, para 12.039) have been reaffirmed by the England & Wales High Court recently in Irish Response v. Direct Beauty Products [2011] EWHC 37 (QB).

In a sense, these may well be seen as factors which go to the ‘irreparable injury’ and ‘balance of convenience’ requirements for grant of injunctions. However, the standard interim injunction principles of American Cynamid v. Ethicon [1975] 1 All ER 504 have been held to be inapplicable to Mareva injunctions: Polly Peok International v. Nadir. In view of this, the approval of the detailed factors from Mr. Gee’s work is most helpful. As the learned Judge in Irish Response stated, “The critical difference between a decision as to whether to grant an ordinary injunction, applying the criteria identified in American Cyanamid Co. v. Ethicon Ltd., and a freezing order is that, whereas in the case of an ordinary injunction, once it has been demonstrated that there is a serious question to be tried and that damages would be an inadequate remedy, the question is where does the balance of convenience lie, in the case of a freezing injunction the issue, after "a good arguable case" has been shown and it has been demonstrated that there is a real risk that, absent the grant of an injunction, any judgment would go unsatisfied, is whether it is just and convenient to grant the injunction…”

The factors useful in this analysis of when a Mareva injunction is appropriate can be found in paras 31-33 of the judgment in Irish Response.

In Indian law, there does not appear to have been too much of discussion on the legal tests to be applied in granting a Mareva injunction. The Supreme Court in MVAL Qamar v. Tsavliris Salvage in obiter seems to have approved a couple of New Zealand decisions on the point. The Bombay High Court has recently stated, “A freezing of assets, known as "Mareva Injunction" is well known concept in English Law (Mareva Companies Naviera SA V. International Bulk Carries SA (1980) 1 All ER 213), as well as, recognized in India. (Venture Global Engineering Vs. Satyam Computer Services Ltd. & Anr., (2008) 4 SCC 190…” This Calcutta High Court judgment also has some discussion about the concept where it distinguishes a Mareva injunction from an attachment before judgment under the Code of Civil Procedure. The applicable legal tests in India are still unclear – readers are invited to point out any specific set of tests approved by the Indian courts in this regard.