Thought Leaders 4 FIRE
Mareva at 50
MAREVA AT 50 STRATEGIES AND TACTICS IN FREEZING INJUNCTIONS: ASSET DISCLOSURE
Authored by: Andrew Ayres KC (Barrister) - Twenty Essex & Andrew Barns-Graham (Barrister) - 3 Hare Court
This year marks the golden anniversary of Lord Denning’s seminal decision on freezing injunctions in Mareva Compania Naviera SA v International Bulkcarriers SA [1980] 1 All ER 213. (The case was reported in 1980, but the hearing took place on 23 June 1975.) To mark the occasion, Andrew Ayres KC of Twenty Essex and Andrew Barns-Graham of 3 Hare Court have published this series of articles, in which they explore the boundaries of freezing injunctions and provide their tactical and drafting recommendations. This is the first article in the series.
The thesis of this article, however, is that those teeth have tended to have too soft a bite, due to the imprecision of the model wording requiring disclosure of the “value, location and details” of assets3. A new model order which is due to come into force in April 2025 removes some of the imprecision, but, in keeping with the general theme of this series, we suggest that claimants should nevertheless be proactive in asking the court to modify the standard wording, as befits the needs of each case.
Introduction Freezing injunctions almost always include asset disclosure orders, the purpose of which is to enable claimants to “police” the injunctions and make them effective1. Lord Woolf once described asset disclosure orders as what gives freezing injunctions their “teeth”2.
The authorities The starting-point is that the “strict construction principle” applies to the interpretation of all freezing injunctions, i.e. they must be construed restrictively due to their draconian effect, the penal consequences of non-compliance, and the resulting risk of oppression of defendants4. In two cases, the High Court has allied the strict construction principle with a purposive interpretation and concluded that the phrase “value, location and details” requires only the disclosure of information which is “necessary” (on the facts of the specific case) for the claimant to police a freezing injunction. In Gerald Metals S.A. v Timis & Ors5, the claimant alleged that a defendant had breached an asset disclosure order by disclosing that it was the 100% owner of company shares without also disclosing that its interest was a beneficial interest and the legal ownership had been assigned
1
Per Waller LJ in Motorola Credit Corporation v Uzan [2002] EWCA Civ 989, at [29].
2
Motorola Credit Corporation v Uzan [2002] EWCA Civ 989, at [37].
3
See paragraph 9(1) of Annex A to Practice Direction 25A and paragraph 11A of Appendix 11 to the Commercial Court Guide.
4
Per Lord Clarke in JSC BTA Bank v Ablyazov [2015] UKSC 64, at [18]-[19].
5
[2017] EWHC 3381 (Comm).
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