Obtaining mareva injunctions and related orders against FFSH re assets

• Author: Rose-Marie B. Antoine
• Position: Lecturer in Law, Faculty of Law, University of the West Indies, Cave Hill Campus, Barbados
• Pages: 212-238

OBTAINING

MAREVA

INJUNCTIONS

AND RELATED

ORDERS

AGAINST FFSH RE

ASSETS

ROSE-MARIE B. ANTOINE*

INTRODUCTION

Two contemporary and radical developments in commercial law are juxta-

posed and examined in this article. The first, the creation of restraining orders

such as the Mareva injunction or the Anton Piller order, is one of the most

pervasive developments in the law of equity, devised particularly to assist in

the curtailment of modern financial crime. This is to counteract the problem

that the fast pace of modern finance can allow the removal of assets or

information before they are secured, where

a

judgment is being enforced. The

second, the development of

a

body of jurisprudence which can appropriately

be called 'offshore law,' is perhaps one of the most important and interesting

legal phenomena of

this

century. It is of particular interest to law enforcement

personnel and those fighting international commercial crime and illegal finan-

cial activity. When we juxtapose these two legal developments, we expose a

dynamic area of jurisprudence. It is not proposed to repeat well established

principles relating to restraint orders. Rather, the article examines the peculi-

arities of the application of Mareva injunctions and related orders where

offshore jurisdictions are involved.

Offshore law

is,

of

course,

not solely concerned with crime or illegal activity.

The creation of offshore financial structures and the resulting law

is

a

legitimate

activity in

itself.

Offshore law may be loosely defined as legislation, legal

*Lecturer

in Law, Faculty of

Law,

University of

the

West

Indies,

Cave Hill

Campus,

Barbados.

practices and law concerned with investment, financial arrangements and

entities created by non-residents of a particular jurisdiction, but structured

within that jurisdiction. Such investments or arrangements are typically

focussed on some business advantage, tax avoidance or protection from

creditors. Offshore law encompasses new forms of the trust, innovative com-

pany laws, creative tax planning vehicles, and original legal principles on

financial confidentiality, jurisdiction and choice of law. Notwithstanding,

offshore financial activity is camera-ready for abuse by unscrupulous players

in the financial world. Topping the list is the money launderer, who can often

make use of confidential offshore structures for his ill-gotten gain. It is to

prevent such abuse that restraining orders such as the Mareva injunction, or

its sister, the Anton Filler order are employed.

Certain structures in offshore financial planning make the need for restrain-

ing orders more significant. Offshore legislation is often deliberately designed

to avoid onshore laws and jurisdictions which can undermine offshore invest-

ment and structures. Jurisdictions which are offshore financial centres have

therefore found themselves having to grapple with new legal principles when

confronted with unique problems of the accessibility of assets under offshore law.

For example, the problem of tactics to inhibit the attachment of assets is

hardly confined to the offshore trust, but one faced by a multiplicity of

plaintiffs and judgment creditors. However, the peculiar complexities of the

offshore sector, with its confidentiality norms, 'flight clauses' and the very

notion of asset protection trusts, a typical form of trust in offshore legal

regimes, make it an important legal issue here.

DESCRIPTION OF RESTRAINING ORDERS

The birth of the Mareva injunction is an innovative judicial response to the

possible removal of assets before attachment. The fundamental principle of the

power to grant a Mareva remains as stated by Lord Denning M.R. in the

original Mareva case:

If it appears that [a] debt is due and owing - and there is danger that the debtor may

dispose of

his

assets so as to defeat it before judgment - the court has jurisdiction in

a proper case to grant an interlocutory judgment so as to prevent him disposing of

those assets.

1 From

Mareva Compania SA

v.

International Bulkcarriers SA

[1975] 2 Lloyd's Rep. 509.C.A.; [1980]

1

A11

E. R.

213,

CA.

2

Ibid.,

at 215.