Mareva Injunction

Yesterday the High Court issued an interim "Mareva Injunction" (資產凍結強制令) against two responsible officers of Tiffit Securities, the recently collapsed broker. Such kind of injecton would restrain them from removing any of their assets from Hong Kong, or dealing with or diminishing the value of any of their assets, whether within or outside Hong Kong. But why is it called "Mareva Injunction"? This was originated from a court case.

Mareva Compania v. International Bulkcarriers SA (1975)

The defendant was a foreign company which intended to move money deposited with a bank in London before trial. The Court of Appeal upheld an injunction banning the defendant from disposing its assets within or moving it outside the jurisdiction of the court.

Mareva Injunction was originally granted only against foreign defendants but now it may also be issued against domestic defendants so long as the plaintiffs establish that substantial risk of dissipation of assets pending trial to their detriment.

Under S.205 of SFO, SFC may issue a written notice to restrict a licensed corporation from disposing of client assets. But Mareva Injunction granted by the court is required to restrain the responsible officers from disposing of their own assets.