Convenience

Although the title Mareva has been officially dropped and replaced by the expression “freezing order”, the original name is still loosely used and will be retained for the purpose of this lesson. The Mareva injunction is an interlocutory injunction i.e. a temporary injunction granted while the case is pending in court and before final judgement is given. It is only ancillary to other proceedings which must have been commenced when it is granted. The grant of the injunction is discretionary and depends upon “the balance of convenience” (in other words, the court will weigh up the convenience to the plaintiff if the injunction is granted, against the detriment to the defendant if the injunction is granted). A Mareva injunction will only be granted if: The plaintiff is likely to recover judgement and the plaintiff can show that the defendant a) has assets within the jurisdiction and also b) that he is intending to remove those assets in order to defeat the judgement which the plaintiff is likely to obtain. This last requirement is strictly imposed and may, in reality, be quite difficult for a plaintiff to show. Hence one can see that the Mareva injunction is not freely applied. The plaintiff will not succeed in his application for a Mareva injunction where it is obvious to the court that the assets which he wishes to ‘freeze’ under the injunction are of no commercial value. In other words, where the assets would fetch no realistic sum of money to meet the plaintiff’s judgement but instead, by being the subject of a Mareva injunction the defendant’s business would be embarrassed or prejudiced, then the application will fail. Likewise, where the defendant can show that the removal of the assets, i.e. money that is made during the normal course of a business transaction, for example to satisfy another creditor, then it is unlikely that the application to freeze this money will be allowed.