MAREVA INJUNCTION

The Mareva injunction (variously known also as a freezing order, Mareva order or Mareva regime), in Commonwealth jurisdictions, is a court order which freezes assets so that a defendant to an action cannot dissipate their assets from beyond the jurisdiction of a court so as to frustrate a judgment.

It is named after the case of Mareva Compania Naviera SA v International Bulkcarriers SA [1975] 2 Lloyd's Rep 509, The mareva injunctions are typically obtained without notice to the other side (ex parte) as to tip the defendant off would likely cause the prompt movement of the relevant assets before the Court could issue its injunction, thereby insulating the defendant from contempt.

In the case of Mareva Compania Naviera SaA v International Bulk Carriers (1980), ALLER 213 , the Court of Appeal refused to consider itself bound by the previous hearing on the subject in which the defendant could not be compelled to give security before judgement.

Under the Ugandan Law, Mareva injunction can be obtained by evoking the powers of court Under the Judicature Act, Cap. 13 and S.98 of the CPA.

Consider: Mugimu Abby v Basabosa Luciano [1991] HCB 70

It should be noted that a mareva injunction is a harsh remedy and will only be granted if a number of conditions are fulfilled and most significant of all is that there must be a real risk that the defendant will dispose of the asset to frustrate any judgement before the plaintiff may obtain it.

A Mareva injunction binds a 3rd party with knowledge of its existence. Such 3rd party will normally be served with the order before defendant is served especially if that 3rd party has possession of the defendant’s assets.

The main conditions for the grant of a Mareva injunction are: -

a) That the claim is one over which the court has jurisdiction.

b) That the plaintiff has a good arguable case.

c) That the defendant appears to have assets within the jurisdiction

d) That there is a real risk that those assets will be removed from the jurisdiction if an injunction is not granted.

e) That there is a real risk that the defendant will be unwilling or unable to satisfy the plaintiff’s claim.

f) That there is a balance of convenience for granting the injunction.