Lawrence Collins questions UK Mareva injunctions

Lawrence Collins is head of litigation and arbitration at Herbert Smith.

Common sense would suggest that if proceedings are pending in one country, and the defendant's assets are situated in another, the plaintiff ought to be able to obtain some kind of interim relief (such as a Mareva injunction) in the latter country.

That is indeed the law in most countries, and courts in France and the US have recently re-affirmed their power to attach assets in support of proceedings abroad.

Regrettably, the Privy Council in Mercedes-Benz v Leiduck (1995) [3 All ER 949] held by a majority of four to one that in principle the English court cannot grant a Mareva injunction when the substantive proceedings are pending abroad.

In that case the Mareva injunction was sought over assets in Hong Kong in aid of a fraud action in Monte Carlo, where the defendant was languishing in prison.

The Privy Council followed the decision of the House of Lords in Siskina v Riskos Compania Naviera SA (1979) [AC 210], a much-criticised decision described by Lord Denning as the most disappointing reversal of his career.

In cases covered by the Brussels and Lugano Conventions the English court has power to grant Mareva injunctions in aid of proceedings in European countries.

Thus the Court of Appeal allowed the freezing of 'Baby Doc' Duvalier's assets while the Haitian Government pursued him in France.

But the Privy Council has even cast doubt on whether Order 11 of the Rules of the Supreme Court have been properly amended to take account of the Brussels and Lugano Conventions.

What of the future? Section 25 (3) of the Civil Jurisdiction and Judgments Act 1982 which empowers the court to grant interim relief in aid of proceedings in non-Convention countries, should be brought into force.

In addition, because of the observations in Mercedes Benz, Order 11 should be reviewed not merely to reverse the effect of Siskina in non-Convention cases, but to clarify the procedural position in Convention cases.