Proskauer on International Litigation and Arbitration:
Managing, Resolving, and Avoiding Cross-Border Business or Regulatory Disputes
- The so-called “Mareva” injunction is a creation of the English courts. Mareva Compania Naviera S.A. v. Int’l Bulkcarriers S.A., 2 Lloyd’s Rep. 509 (1975). Similar relief appears to be available in other Commonwealth countries. See, e.g., Hong v. Yew, Civil Appeal No. 63 of 1997 (Ct. of App., Singapore 1997).
- A Mareva preliminary injunction is issued at the outset of a case precluding the defendant from transferring or liquidating any assets other than in the ordinary course. While such “freezing” orders have long been available in cases seeking equitable relief as to specific funds or assets, the innovation of the Mareva injunction is its availability in cases seeking ordinary legal relief for money damages.
- Such injunctions have the effect of “freezing” all of a defendant’s assets and, potentially, on a world-wide basis. See Michael Bundock, The Onward March of the Mareva, 139 NEW L.J. 496 (1989) (explaining increasingly “global” reach of Mareva injunctions).
- Both the U.S. Supreme Court and the New York Court of Appeals have held that the Mareva injunction is such a radical departure from established equitable powers that it cannot be issued by U.S. federal courts or by New York courts. Grupo Mexicano de Desarrollo S.A. v. Alliance Bond Fund, Inc., 527 U.S. 308 (1999); Credit Agricole Indosuez v. Rossiyskiy Kredit Bank, 94 N.Y.2d 541 (2000).
- It remains to be seen, however, whether U.S. courts will grant “comity” to Mareva injunctions properly issued by non-U.S. courts. In other contexts, U.S. courts refuse to grant comity to judgments that violate “the laws or public policy of the United States” or lack “fundamental standards of procedural fairness” and observing a foreign bankruptcy proceeding violates those principles. Finanz AG Zurich v. Banco Economico S.A., 192 F.3d 240 (2d Cir. 1999).
< Previous Section