Mareva Injunction – Position in India

What is a Mareva Injunction?

A Mareva injunction (also known as a freezing order) is a type of court order that freezes the assets of a party to prevent them from dissipating those assets before a claim can be settled. The injunction is typically used in situations where there is a risk that the defendant might dispose of their assets, rendering the judgement in the claimant’s favour ineffectual.

Although primarily used in the context of domestic civil litigation, a Mareva injunction can also be an important tool in admiralty law, especially where there is a risk that a vessel or its owner might attempt to move the ship or dispose of assets to avoid enforcement.

Mareva Injunction in Admiralty Law

In admiralty proceedings, the Mareva injunction can be used as a complementary remedy to the arrest of a ship. It is particularly helpful when:

• The ship is likely to leave the jurisdiction before the claimant can secure a legal remedy.
• The shipowner may attempt to transfer the vessel to a different jurisdiction to evade the claim.

Mareva Injunction in India

In India, the Mareva injunction is recognised by the Civil Procedure Code, 1908 (CPC) under Order 38, Rule 5. While it is not specifically provided for under the Admiralty Act, 2017, Indian courts have the authority to grant a Mareva injunction in appropriate cases as part of their inherent jurisdiction. In admiralty law, a Mareva injunction can be used to freeze the assets of the defendant vessel owner, preventing them from disposing of the ship or its proceeds during the pendency of the litigation.

Key Elements for Granting a Mareva Injunction

• Serious claim: There must be a strong prima facie case of the claimant’s entitlement to the relief sought.
• Risk of asset dissipation: There must be a legitimate fear that the defendant will dissipate or conceal assets, making a judgment or award ineffective.
• Adequate remedy: The claimant must not have an adequate remedy at law if the injunction is not granted.

Application in Admiralty

• A Mareva injunction may be granted alongside the arrest of the vessel, particularly if the vessel is at risk of being moved to another jurisdiction.
• The injunction prevents the defendant from transferring or disposing of the vessel or any associated assets until the claim is resolved.