From Conyers Dill & Pearman

In VTB Capital v Universal Telecom Management and another (Judgment 4 June 2013), the Court of Appeal held that the Cayman Islands Court has jurisdiction to grant a Mareva injunction against a non‐party resident in the jurisdiction in support of proceedings against a third party in another jurisdiction. In so doing they disagreed with the first instance Judge Cresswell J, who had held that no such jurisdiction existed.

The Court of Appeal held that the Judge’s analysis of the two Court of Appeal cases upon which he had relied, Algosaibi v Saad (15.02.2011) and Deloitte v Felderhof (12.07.2011), was wrong. The Court went on to consider whether there were any other reasons why the Judge’s conclusion could have been right, and found none. On the contrary, the Court of Appeal made it clear that the correct state of Cayman Islands law is as follows:

(i)        that the person against whom the Mareva order is sought must be subject to the jurisdiction of the court;

(ii)       that, in a case where there is no cause of action alleged against the person against whom the order is sought (that is to say, where the claimant seeks to  invoke  the  Chabra  jurisdiction  against  an  non  cause  of  action defendant  (“NCAD”),  it  is  not  necessary  that  the  substantive  claim against the cause of action defendant has been brought (or is being persuaded) in the court in which the Mareva order is sought;

(iii)      that the substantive claim against the cause of action defendant (“CAD”)

(wherever brought or pursued) must be founded on a cause of action recognised by the court in which the Mareva order is sought; and

(iv)      that, if those requirements are met, there is no reason in principle why the CAD should himself (or itself) be a party to the proceedings in which the Mareva order is sought against the NCAD; nor that (if not a party to those proceedings) the CAD should nevertheless be subject to the jurisdiction of the court seized of those proceedings.

Although on the facts the Court of Appeal declined to grant the injunction sought, the case is important in establishing a novel, but necessary, jurisdiction.

Conyers acted for the Appellants.

This article is not intended to be a substitute for legal advice or a legal opinion. It deals in broad terms only and is intended to merely provide a brief overview and give general information.

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EDITOR: Following is taken from http://www.duhaime.org/LegalDictionary/M/MarevaInjunction.aspx

Mareva Injunction Definition:

A temporary injunction that freezes the assets of a party pending further order or final resolution by the Court.

Related Terms: Injunction

A temporary injunction that freezes the assets of a party pending further order or final resolution by the Court, so named after the case which allowed the remedy.

Also known as a freezing or freeze injunction.

Often used to prevent a defendant from secreting assets out of the Court’s jurisdiction as soon as the claim is served, to frustrate enforcement of the judgment.

Aimed usually at a specific defendant, and not attached to assets themselves. The named defendant is so restrained in regards to specified assets. The injunction is enforced by the contempt powers of a court.

The mareva injunctions are typically obtained without notice to the other side (ex parte) as to tip the defendant off would likely cause the prompt movement of the relevant assets before the Court could issue its injunction, thereby insulating the defendant from contempt.