Lloyd's Maritime and Commercial Law Quarterly
THE EXTRA-TERRITORIAL REACH OF THE MAREVA INJUNCTION
Justice Andrew Rogers*
Can Mareva injunctions be granted against defendants who are out of the jurisdiction of the court and in respect of foreign assets? As a matter of discretion should such orders be made? If so, what form should orders take?1
Jurisdiction
Mareva injunctions are a remedy evolved by the ingenuity of judges, particularly Lord Denning, in responding to the changing needs of the commercial community. The fact that the remedy, initially in England, and still in Australia, had no statutory basis, had important consequences in the evolution of the boundaries of relief. Because it was the creature of judge-made law, the courts were free to change and extend the boundaries as more experience was gained in the working of the order.
The other feature of the remedy that had an important effect on the reach of the injunction was the basis on which it rests. In Australia, in Turner v. Sylvester,2 there was a review of the largely English authorities as they then stood; and, while expressing difficulty with the jurisdictional basis identified by Lord Denning, the judgment followed the path charted by Lord Goff of Chieveley, then a trial judge, in a number of cases in 1980–1981. As that learned judge said in A v. C:3
the principle underlying the jurisdiction is the prevention of an abuse—the abuse by a foreign resident causing assets to be removed from the jurisdiction in order to avoid the risk of having to satisfy any judgment which may be entered against him in pending proceedings in this country.
Subsequent authority has made clear that the statement was too narrowly based. However, the central concept in Lord Goff’s statement remains unchallenged. That a court has inherent power to prevent abuse is clear beyond argument. It is an abuse to dissipate one’s assets for the purpose of ensuring that there remain no assets sufficient to satisfy a judgment.
Placing the jurisdiction on this basis emphasizes a number of factors. First, the order of the court does not operate to provide security against any future judgment. In other words, although the defendant is precluded from disposing of assets, the order does not prevent payment of other debts in the ordinary course of business,
* Chief Judge, Commercial Division, Supreme Court of New South Wales. This paper was delivered to the International Law Association on 24 August 1990. I gratefully acknowledge the assistance of Ms Sarah Joseph in the preparation of the paper.
1. Analogous problems have been the subject of a helpful examination by Professor P. Gottwald, “Limits to Extra-territorial Effects of Judicial Acts” (1990) 9 C.J.Q. 61.
2. [1981] 2 N.S.W.L.R. 295.
3. [1981] Q.B. 956, 959.
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