Front Carriers Ltd. v. Atlantic & Orient Shipping Corporation

In Admiralty Practice, Injunctions on (Updated )

This was an application for a Mareva injunction to freeze the assets of the Defendant within British Columbia pending arbitration in London. The underlying action concerned an alleged repudiation of a charter party agreement between the parties. The motions Judge set out the applicable tri-partite test for an interlocutory injunction, being: 1. a preliminary assessment of the merits to ensure that there is a serious issue to be tried; 2. a determination that the applicant would suffer irreparable harm if the application is refused; and 3. an assessment as to which party would suffer greater harm from the granting or refusal of the injunction. Regarding the “serious issue” branch of the test, the motions Judge noted that the threshold for normal injunctive relief is that the issue is not frivolous or vexatious, however, the threshold for a Mareva injunction is more stringent, being, “a strong prima facie case”. The motions Judge then set out the specific criteria for a Mareva injunction, being: 1. the Plaintiff must make full and frank disclosure of all material matters; 2. the Plaintiff must give particulars of the claim including the points made against it by the Defendant; 3. the Plaintiff should give some grounds for believing the Defendant has assets in the jurisdiction; 4. the Plaintiff should give some grounds for believing that there is a risk of the assets being removed from the jurisdiction; and 5. the Plaintiff must give an undertaking in damages, which in suitable cases should be supported by a bond or other security. The motions Judge noted that the requirement of full and frank disclosure is flexible in that mere imperfections in affidavits or the non-disclosure of inconsequential or immaterial facts will not be fatal. The Judge applied these tests and ultimately granted the order requested. Appeals,Overruling Prior Panels,Appeals to Supreme Court