Asset Freezing Orders by a Court – Mareva Injunctions

An ‘interlocutory injunction’ is a court order made during a court case, before the final judgement, usually considered at the very start of litigation. In the case of a copyright breach involving clothing, for example, the case will take months at least to resolve, but the clothes copied from your designs, or the designs you own, are in a warehouse somewhere, waiting to be sold to pretty well the same demographic you would sell your clothes to. That could be a commercial disaster, and might even damage your brand. You need to stop the copier from selling the copies before the relevant clothing season commences.

What you will want in this case is a ‘Mareva injunction’, which is an asset-freezing order that can prevent the person or company who is ripping off your designs from dealing in the rip-offs, from moving the rip-offs, or moving the proceeds of sale. If they have on-sold to somebody else, that party can be prevented from doing the same things. If it’s an international drama, Australian courts can even give Mareva injunctions over assets in Australia if the upcoming judgement in an overseas case would be recognised in Australian law.

The effect of a Mareva injunction can be pretty drastic, and the case hasn’t even been decided yet, so the courts do not just hand them out like parking tickets. The party asking for the freeze has to show:

  1. That their case is fairly solid, or at least has enough good evidence to suggest it might be a goer under the law.
  2. That there is good evidence that the other party is likely to do a runner or move assets from the country or dispose of them.

The stronger your case, the wider the court can make the Mareva injunction. Because it is such a drastic procedure, the court will also require the party seeking the freeze to give undertakings and/or pay a bond to the court which would cover their liability if they lost the case.

In summary, a Mareva injunction is not easy to get and will require legal advice and action, as assembling the evidence required can be quite a job. However, if you face a substantial commercial risk without a freezing order you will certainly need to consider getting one.