Four Things We Learnt About Mareva Injunctions From the 1MDB v Najib Razak Case

On 27 September 2023, the High Court affirmed on an inter partes basis the Mareva injunction granted in favour of 1Malaysia Development Berhad against former Prime Minister of Malaysia, Datuk Seri Najib Razak in 1Malaysia Development Berhad & Ors v Datuk Seri Hj Najib Bin Tun Hj Abdul Razak & Ors (KLHC Case No. WA-22NCC-212-05/2021).
In its broad grounds of judgment, the High Court carefully analysed and decided four legal issues regarding the principles related to Mareva injunctions. This article will briefly discuss these issues below.
1. Does the good arguable case standard set a particularly high bar?
Unlike in the case of an interlocutory injunction where a “serious issue to be tried” has to be established, in the case of a Mareva injunction, the higher threshold of a “good arguable case” needs to be proven as a requirement to obtain a Mareva injunction. The question that arises is how much higher is “higher”?
The High Court held that it was not “overly exacting” and accepted the position in the English Court of Appeal in Lakatamia Shipping Company Ltd v Morimoto [2020] 2 All ER (Comm) 359, which held that the “good arguable case standard is not particularly burdensome”.  Although S & F International Ltd v Trans-Con Engineering Sdn Bhd [1985] 1 MLJ 62  described “good arguable case” as a “fair chance” of succeeding, the High Court found that in the context of recent case law, it was “not necessarily one that the court believes has more than 50% chance of success” (see The Customs and Tax Administration of The Kingdom of Denmark v Saling Capital Ltd & Ors and other appeals [2022] 1 MLJ 316). 
2. Is the Defendant’s right to silence in parallel criminal proceedings a relevant consideration?
The Defendant argued that due to his right to silence in criminal proceedings, which are grounded on similar facts to the civil suit, he faced an “impediment” in being able to disclose his defence to the Mareva injunction application. The High Court rejected this contention as it would mean that no injunction can be obtained against a defendant who is facing criminal proceedings. It would also mean the Court would have to be blind to all affidavit evidence whenever a defendant cloaks himself under a right to silence, which it noted would be a dangerous precedent to set. The High Court agreed with the principle set in the English Court of Appeal case of Jefferson Ltd v Bhetcha [1979] 2 All ER 1108, that the “sanctity of the right to silence in criminal proceedings does not provide an impenetrable shield against accountability in contemporaneous civil proceedings”.
3. Is a suspiciously inadequate disclosure of assets relevant to the risk of dissipation?
In aid of the ex parte Mareva injunction, the Court had ordered the Defendant to declare his assets up to US$681 million. The Defendant was found to have failed to provide adequate disclosure. Amongst other things, he was found to have not disclosed his assets overseas, full details about his bank accounts, omission to declare the RM114 million in cash which was released to him after the dismissal of his forfeiture suit, his inconsistent and incredible explanation that the RM114 million belonged to his political party, UMNO, and his failure to disclose “accessories” which he admits were released to him. According to the Court, the selective, tardy and suspicious disclosure constitutes a blatant disregard of Court orders and establishes a real risk that the Defendant may dissipate assets to frustrate the enforcement of any future judgments.
4. Is delay in filing an application for a Mareva injunction fatal?
One of the grounds on which the Defendant challenged the Mareva injunction application was alleged delay on the part of the Plaintiff in applying for the same. The Court found that the Plaintiff had explained the timing for its application. Nevertheless, the Court went on to hold that delay is not fatal to an application for a Mareva injunction. Delay was found to be just one factor that should be considered with other factors in determining whether it is unjust to grant the injunction. The Court agreed with the English cases of Madoff Securities International Ltd and another v Raven and others  [2012] 2 All ER (Comm) 634, Ras Al Khaimah Investment Authority & Ors v Bestfort Development LLP & Ors [2018] 1 WLR 1099 and Antonio Gramsci Shipping Corporation v Recoletos Limited & Ors [2011] EWHC (2242) (QB), that delay does not automatically the vitiate the risk of dissipation of assets.
The High Court analysed and decided these four legal controversies in relation to Mareva injunctions which have been subject to some debate in Malaysia. The decision of the High Court provides helpful guidance as to the view the Court could adopt when having to determine whether to grant or set aside a Mareva injunction.1
Khoo Guan Huat (Partner), Siva Kumar Kanagasabai (Partner) and Dhanyaa Shreeya (Senior Associate) of the Dispute Resolution Practice of Skrine represented 1Malaysia Development Berhad in the proceedings.
1 The Defendant has filed an appeal to the Court of Appeal against the High Court decision.

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