Malaysian Civil Litigation Series – Civil Law


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1. Introduction

In our previous edition, we have looked into the commencement of
a legal suit. However, they may be instances where drastic measures
need to be taken in order to protect a party’s rights and
sometimes there is not enough time to file in a writ and statement
of claim. For this article, we shall explore one of the more
well-known orders to freeze assets, which is the Mareva
injunction.

2. What is a Mareva Injunction?

The Mareva injunction derives its name from the case of origin,
which is Mareva Compania Naviera SA v International Bulkcarriers
SA1 . This is a temporary order which blocks the
defendant from disposing of his/ her assets until the determination
of a case that he/she is involved in. Naturally, this order will be
requested for by the plaintiff. In the local courts, it has been
defined as a form of injunction which “restrains a defendant
by himself or by his agents or servants or otherwise from removing
from the jurisdiction or disposing of or dealing with those of his
assets that will or may be necessary to meet a plaintiff’s
pending claim”2 . This means that a Mareva
Injunction can take place even if a claim has not been filed by a
potential plaintiff. The procedure changes slightly in the event
that the injunction is required before a suit has been filed or
during the filing of such a suit.

This form of injunction is also known as a freezing order under
the Civil Procedure Rules 19973 and it is not uncommon
that the words “Mareva injunction” and “freezing
orders” are used interchangeably in court hearings.

3. Procedural Steps for a Mareva Injunction

In terms of how it is applied, reference must be base to the
Rules of Court 2012. Firstly, the application must be made via a
notice of application supported by an affidavit. It is common that
this application is made without notifying the defendant and
without requiring the defendant to be present in court, also called
an ex-parte application.

If it is of utmost urgency, it is possible for a plaintiff to
file an application before an actual suit was filed to begin with.
The affidavit supporting this application must contain the
following points4:

  • the facts giving rise to the claim;

  • the facts giving rise to the application for an interim
    injunction;

  • the facts relied on to justify the application ex parte,
    including details of any notice given to the other party or, if
    notice has not been given, the reason for not giving notice;

  • any answer by the other party (or which he is likely to assert)
    to the claim or application;

  • any facts which may lead the Court not to grant the application
    ex parte or at all;

  • any similar application made to another Judge, and the order
    made on that application; and

  • the precise relief sought.

If the case at hand does not require immediate intervention via
an ex parte application, then the plaintiff can file a Mareva
injunction like any standard application to Court. However, in
practice this is very unlikely as only imminent danger of property
being transferred out would justify the use of a Mareva
injunction.

In order to protect the interest of the unsuspected defendant,
the plaintiff may be required to provide an undertaking
5 for an interim injunction such as a Mareva injunction.
This undertaking in practice usually comes in a form of a deposit
payable to the Court and is applicable to all interim injunctions
and the general principles of the same will be further discussed in
a future edition.

4. Considerations for the Approval of a Mareva Injunction

With regard as to what the court would consider in terms of
allowing such an injunction, reference would then need to be made
to case law. Namely, in the case of Bank Bumiputra v Lorrain
Osman6 , provides that the plaintiff must show these
three points: a good arguable case; evidence that the defendant has
assets within the jurisdiction; and that there is a risk that
assets may be disposed by the defendant before a judgment.

In terms of what is a “good arguable case”, the
plaintiff only has to show a case that based on available evidence,
there is a fair chance for the plaintiff to win the case, which can
warrant a summary judgment7 . Pertaining to evidence for
assets within the jurisdiction, it should be noted that there are
no specific rules to the same. Having said that, it is common in
practice for the plaintiff to provide evidence of assets such as
bank account statements or copies of title deeds. It should be
noted that the Court will not intervene at this juncture as
sourcing such evidence is the responsibility of the plaintiff. In
addition to those three points, the disclosing of facts for the
application of the injunction must be “full and frank
disclosure”. Essentially, this means that there must be no
misleading facts or any suppression of material facts.

5. Once obtaining the Mareva Injunction

If granted, the Mareva injunction will take effect for up to 21
days (ie: the assets of the defendant cannot be moved or
transferred during said 21 days), unless otherwise revoked or set
aside8 . In the event that the hearing for the
application for the inter partes is not held within the 21 days, or
if there is a need for the injunction to continue to be active,
then a fresh application would be necessary9 .

Once the Mareva injunction is granted, it must be served within
7 days of the date of the order, and the Court when granting the
order must fix a date to hear the application inter partes (ie:
with both plaintiff and defendant present) within fourteen days
from the date of the order10 This is to enable the
affected defendant the opportunity to challenge the injunction,
since his/her right to freely move assets has been severely
infringed. Alternatively, this also gives the opportunity for the
plaintiff to request from the court the extension of the Mareva
injunction until the dissolution of the case. After the hearing of
the inter partes application, the Court may decide to allow the
freezing of the assets to continue on, or to revoke the Mareva
injunction entirely. When deciding during an inter parte
application, the Courts will rely on the same three points similar
to the Bank Bumiputra case above11 . This continuing of
the freezing of the assets shall be deemed as a new
injunction12 .

Having said that, if the application is made before the filing
of a suit, the suit must be filed and issued within 2 days of the
granting of the order/such period as the court sees
fit13 .

6. Conclusion

We hope that the information shared has provided a general idea
on what Mareva injunctions are and how they work. However, there
are various moving parts in such an injunction and the needs of
each plaintiff will differ. In the event that you would like to
know about what was shared in greater detail, please do not
hesitate in contacting us. For our next edition, we will look into
other forms of injunctions and further interlocutory
applications

Footnotes

1. [1980] 1 ALL ER 213

2. S & F International Limited v Trans-Con
Engineering Sdn Bhd [1985] 2 CLJ 228

3. The Civil Procedure Rules were introduced in 1997
by the Civil Procedure Rule Committee. They are the rules of civil
procedure used by the Court of Appeal, High Court of Justice, and
County Courts in civil cases in England and Wales. As the legal
history between England and Wales and Malaysia is very similar, it
is common for Malaysian courts to borrow terms from the
same.

4. Order 29 Rule 1(2A), Rules of Court
2012

5. Keet Gerald Francis Noel John v Mohd Noor @ Harun
Abdullah and Others [1995] 1 CLJ 293

6. [1985] 2 MLJ 236

7. Beyond Hallmark Sdn Bhd v Leong Tuck Onn Wong
Swee Min [2017] MLJU 1315

8. Order 29 Rule 1(2B), Rules of Court
2012

9. RIH Services (M) v Tanjung Tuan Hotel [2002] 3
MLJ 1

10. Order 29 Rule 1(2BA), Rules of Court
2012

11.  All Kurma Sdn Bhd v Teoh Heng Tatt and Others
[2022] 9 CLJ 526

12. RIH Services (M) v Tanjung Tuan Hotel [2002] 3
CLJ 83

13. Order 29 Rule 1(3)(b), Rules of Court
2012

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

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