Pursuit of relief against defendants doing business in various countries around the world often involves the issuance by courts of orders that have transnational impact. Thus, in recent years, English courts have become accustomed to issuing orders (at one time known as “worldwide Mareva injunctions”) under which defendants subject to their jurisdiction are enjoined from transferring their assets, regardless of where in the world those assets are located.

However, if proceedings are taking place in one country (the “originating country”) when a defendant is based in another country (the “receiving country”), a freezing order from the originating country, even if it is expressed to be worldwide in scope, will be of only limited practical importance. The originating country courts may have little power to enforce their “worldwide” orders and rely on the courts of the receiving country to issue orders directed to persons in that country in support of the originating country proceedings. In their role as courts of a receiving country, the English courts have, in recent years, been given greater authority to provide assistance to foreign tribunals by granting orders with respect to defendants’ assets, even though, for jurisdictional reasons, no substantive proceedings are brought, or could be brought, in England.

In the United States, this kind of receiving-country assistance, in the form of ancillary injunctions and similar kinds of orders, is allowed under Article 304 of the Bankruptcy Code with respect to applications by representatives of foreign bankrupt estates. It is by no means certain, however, that such orders are commonly available in the United States, especially in litigation not involving bankruptcy. Since the availability of such relief can have a significant effect on the utility of litigation in a foreign country, it is one of the issues that it is important to consider when multinational litigation is expected.

The English Experience

Under Section 25 of the English Civil Jurisdiction and Judgments Act 1982 (the “1982 Act”), an English court may grant “interim relief” with respect to cases in courts other than the courts of England and Wales. Indeed, such relief may be obtained in the English courts even though they may have no jurisdiction on the underlying claims. The 1982 Act reversed the effect of a decision of the House of Lords in The Siskina [1979] AC 210, which held that injunctions or attachments could not be granted by English courts unless they had jurisdiction over the underlying claim.

Although Mareva-type relief is now available in England regardless of where the proceedings on the merits are pending, the 1982 Act permits courts to refuse to grant this relief if, in its opinion, the fact that the court has no jurisdiction apart from Section 25 in relation to the subject matter of the proceedings makes it “inexpedient” for the court to grant such relief.