Originally from Attachment of Assets

1. What is the general nature and effect of judicial measures available for plaintiffs to obtain provisional relief affecting property of debtors to obtain security for judgments to be obtained (“attachments”)? Freezing property in place? Placing it in the custody of a third party, such as a court official, sheriff or marshall?

Mareva injunction

In Malaysia, if a plaintiff believes that there is a real risk that a debtor will dissipate or deal with assets in such a way so as to frustrate any future successful judgment in favour of the plaintiff, the plaintiff can apply to the Malaysian Courts who like the Courts in the United Kingdom have recognised that there is jurisdiction to grant injunctions in the form of Mareva injunctions.1 The earliest decision to deal with a Mareva Injunction in Malaysia was the Federal Court decision of Zainal Abidin bin Haji Abdul Rahman v Century Hotel2 although the decision of the Malaysian High Court in Pacific Centre Sdn Bhd v United Engineers (M) Bhd3 was one of the early Malaysian decisions to expand and explain in detail why and how Mareva injunctions are to be sought for in Malaysia. In the latter case, the Court cited and quoted from the English High Court decision of the Mustill J (as he then was) in the case of, Third Chandris Shipping Corporation v Unimarine SA [1979] QB 645 wherein Lord Mustill held that “The whole point of the Mareva jurisdiction is that the plaintiff proceeds by stealth, so as to pre-empt any action by the defendant to remove his assets from the jurisdiction.”

In short the Pacific Centre decision laid down the conditions that a plaintiff needed to show to a Malaysian court before he could obtain a Mareva injunction.4 A plaintiff needs to show that (i) that there is good and arguable claim; (ii) tat the defendant has assets within the jurisdiction; and (iii) that there is a risk that the defendant may deal with those assets, whether by removal or disposal, as to render them unavailable or untraceable.