Freezing Order Flashcards
(23 cards)
What is a freezing order (formerly Mareva injunction)?
A freezing order is an interlocutory remedy granted in personam, restraining a party from disposing of or dealing with assets to prevent frustration of a judgment.
Does a freezing order create a proprietary interest in the frozen assets?
No. It restrains the defendant personally but does not create proprietary rights in the assets.
What are the three conditions a claimant must satisfy to obtain a freezing order?
(1) A good arguable case,
(2) assets within jurisdiction, and
(3) real risk of dissipation – Z Ltd v A-Z [1982].
Under which statute in Guyana does the High Court derive power to grant freezing orders?
Section 3B of the Civil Law Act, Cap 6:01.
What is the English statutory provision that originally justified freezing orders?
Section 45 of the Supreme Court of Judicature (Consolidation) Act 1925.
Which case formally established the principle of freezing orders?
Mareva Compania Naviera SA v International Bulkcarriers SA [1980] 1 All ER 213 (CA).
Which earlier case demonstrated judicial recognition of such orders before Mareva?
Nippon Yusen Kaisha v Karageorgis [1975] 1 WLR 1093.
In which case did the court confirm freezing orders could be granted in multi-jurisdictional fraud?
Derby & Co Ltd v Weldon (Nos 1–4) [1990] 1 Ch 65.
What are three key safeguards courts impose on applicants of freezing orders for the benefit of the respondents?
(1) Full and frank disclosure - Brinks Mat Ltd v Elcombe,
(2) undertaking in damages - American Cyanamid Co v Ethicon, and
(3) proportionality - Lock International v Beswick
Which case establishes the duty of full and frank disclosure in ex parte applications?
Brinks Mat Ltd v Elcombe [1988] 1 WLR 1350.
What is the relevance of American Cyanamid Co v Ethicon Ltd [1975] AC 396?
It affirms that an applicant must give an undertaking in damages when seeking interim relief.
Which case warned against overly broad freezing orders?
Lock International plc v Beswick [1989] 1 WLR 1268.
Can freezing orders bind third parties such as banks?
Yes – as confirmed in Third Chandris Shipping Corporation v Unimarine SA [1979] QB 645.
What is the “Babanaft proviso”?
A safeguard from Babanaft International Co SA v Bassatne [1990] that limits a freezing order’s effect on third parties and foreign entities.
Why are freezing orders sometimes criticised?
For their potential to be oppressive, especially if overly broad, granted without notice, or disruptive to third parties - Lock International v Beswick
What due process concerns arise with ex parte freezing orders?
They may violate natural justice if the respondent is unaware and the applicant fails in full disclosure.
How do courts mitigate the risk of freezing orders being oppressive?
By requiring narrow scope, time limits, proportionality, and built-in review mechanisms.
Nippon Yusen Kaisha v Karageorgis [1975] 1 WLR 1093
the claimant shipping company brought proceedings against the defendant charterer for unpaid freight charges and sought an injunction to prevent the defendant from removing funds from an English bank account. Although there was no established precedent for such an order at the time, the Court of Appeal granted the injunction, recognising the need to prevent the dissipation of assets that would frustrate the enforcement of any judgment
Mareva Compania Naviera SA v International Bulkcarriers SA [1980] 1 All ER 213 (CA)
the claimants had chartered their vessel to the defendants and feared that the defendants, who were foreign-based and had minimal assets in England, would remove those assets from the jurisdiction before a judgment could be enforced. The court granted an injunction restraining the defendants from disposing of their assets within England, marking a significant shift in English procedural law.
Derby & Co Ltd v Weldon (Nos 1–4) [1990] 1 Ch 65,
The case involved allegations of large-scale fraud, and the claimants sought a freezing order over both domestic and international assets of the defendants. The court granted the order but emphasised that such relief should not be granted lightly.
Brinks Mat Ltd v Elcombe [1988] 1 WLR 1350
the claimants (Brinks Mat Ltd) had obtained an ex parte Mareva (freezing) injunction against the defendant in connection with the proceeds of a high-profile gold bullion theft. However, it later emerged that the claimants had failed to disclose several material facts at the initial hearing
American Cyanamid Co v Ethicon Ltd [1975] AC 396
The claimant, American Cyanamid, sought an interim injunction to restrain the defendant from selling a competing product pending trial.
Lock International plc v Beswick [1989] 1 WLR 1268,
This case involved a dispute in which the claimant company obtained a freezing injunction (Mareva order) against former employees suspected of misappropriating confidential business information. The injunction was granted without notice and covered a broad range of assets, including the defendants’ personal and business property. The court, however, found that the scope of the order was excessively wide and oppressive, effectively paralysing the defendants’ business activities and daily life.
