Mareva Injunctions in Cyprus: Freezing Order
The Mareva injunction is a powerful legal remedy employed by courts in many jurisdictions worldwide to protect the interests of parties in legal disputes, particularly in cases involving potential asset dissipation or concealment. This article delves into the concept of Mareva injunctions, their application in Cyprus, and the critical role they play in safeguarding the interests of litigants.
What is a Mareva Injunction?
A Mareva injunction, also known as a freezing order, is a court order that temporarily prevents a party from disposing of or dealing with their assets in a manner that could jeopardize the satisfaction of a potential judgment. The primary purpose of a Mareva injunction is to ensure that the defendant’s assets are not dissipated or hidden, thereby securing the enforcement of a future judgment in favor of the claimant. The concept of the Mareva injunction originated in the English case of Mareva Compania Naviera SA v International Bulkcarriers SA (1975) and has since been widely adopted in many common law jurisdictions.
Application of Mareva Injunctions in Cyprus
In Cyprus, Mareva injunctions are derived from English law and are regulated under Section 32 of the Courts of Justice Law (14/1960). The Cypriot legal system has embraced the Mareva injunction as a crucial tool to protect the rights of litigants, particularly in cross-border disputes and matters involving complex corporate structures.
The Cypriot courts have the power to grant Mareva injunctions in both domestic and international disputes, either as an ancillary measure in support of local proceedings or in support of foreign proceedings. Additionally, Cyprus is a signatory to the European Union’s Regulation (EU) No 1215/2012 (Brussels I Recast), which allows Cypriot courts to enforce Mareva injunctions issued by other EU member state courts.
Requirements for Obtaining a Mareva Injunction in Cyprus
A claimant seeking a Mareva injunction in Cyprus must satisfy the following requirements:
- Cause of action: The claimant must establish a good arguable case, meaning that there must be a prima facie cause of action against the defendant.
- Risk of dissipation: The claimant must provide evidence of a real risk that the defendant will dissipate or dispose of their assets, rendering the enforcement of a future judgment difficult or impossible.
- Balance of convenience: The claimant must demonstrate that the balance of convenience lies in their favor, meaning that the potential harm to the claimant if the injunction is not granted outweighs the harm to the defendant if it is granted.
- Undertaking as to damages: The claimant must provide an undertaking to compensate the defendant for any losses suffered as a result of the injunction if it is later found that the injunction was improperly granted.
Procedure for Obtaining a Mareva Injunction in Cyprus
A claimant seeking a Mareva injunction in Cyprus must file an ex parte application, accompanied by a supporting affidavit detailing the facts and evidence satisfying the aforementioned requirements. The court will consider the application without the presence of the defendant to ensure the element of surprise and prevent any potential dissipation of assets.
If the court is satisfied that the requirements for granting a Mareva injunction have been met, it will issue the injunction, which will typically include provisions prohibiting the defendant from disposing of or dealing with their assets up to a specified value. The defendant must be served with the injunction order and has the right to apply to the court to have it set aside or varied.
Mareva injunctions are a vital tool in the Cypriot legal system, ensuring that parties in legal disputes have recourse to the assets of their opponents in the event of a favorable judgment. By understanding the purpose, application, and requirements of Mareva injunctions in Cyprus, claimants can effectively utilize this powerful remedy to protect their interests and safeguard their rights.
In a world where assets can be easily transferred or concealed, the Mareva injunction serves as a strong deterrent against defendants seeking to avoid the consequences of legal proceedings. The Cypriot courts’ willingness to grant Mareva injunctions in both domestic and international disputes underscores the jurisdiction’s commitment to upholding justice and the rule of law.
However, it is crucial to note that Mareva injunctions should not be used as a tool for harassment or to gain undue advantage in legal disputes. As such, the courts remain vigilant in ensuring that these orders are granted only when the necessary requirements are satisfied, and parties are encouraged to approach the courts in good faith when seeking such relief.
In summary, the Mareva injunction is a vital instrument in the Cypriot legal landscape, offering a significant level of protection for litigants who fear their opponents may dissipate or hide assets. By understanding and carefully applying the principles and requirements outlined in this article, litigants can ensure that they maximise the chances of a successful outcome in their legal disputes.
Our comprehensive range of services related to Mareva injunctions includes:
Legal Consultation: Our expert lawyers will thoroughly assess your case and advise on the feasibility of obtaining a Mareva injunction, taking into account the specific circumstances of your dispute.
Drafting and Filing Applications: We meticulously prepare and submit ex parte applications for Mareva injunctions, ensuring that all necessary requirements are met and supported by persuasive evidence.
Representation in Court: Our seasoned litigators are adept at advocating for the granting of Mareva injunctions in court, demonstrating the merits of your case and the necessity of the injunction to protect your interests.
Enforcement of Mareva Injunctions: Once an injunction is granted, we work diligently to ensure its enforcement, collaborating with local and international authorities when necessary to secure your assets and safeguard your rights.
Setting Aside or Varying Injunctions: If you are a defendant subjected to an improperly granted Mareva injunction, we can assist in filing applications to set aside or vary the injunction, protecting your rights and interests.