A Mareva Injunction Freezes the Money — and Makes You Liable Too

What is a Mareva injunction?

Defined term: a Mareva injunction, also called a freezing order, is an interlocutory injunction that restrains a party from removing assets from Hong Kong or otherwise dealing with them. It does not transfer anything to you and it does not decide the claim. It keeps the defendant's assets in place so that a judgment you later obtain has something to be enforced against.

The statutory footing is short. Section 21L(1) of the High Court Ordinance lets the Court of First Instance grant an injunction in all cases where it appears just or convenient to do so, and section 21L(3) confirms that an injunction restraining a party from removing or dealing with assets located in Hong Kong may be granted whether or not that party is domiciled, resident or present here. Section 52B(3) of the District Court Ordinance gives the District Court the same power within its own jurisdiction.

Section 21M adds a cross-border tool. The Court of First Instance may grant interim relief, expressly including a Mareva-type injunction, in aid of proceedings brought outside Hong Kong that could produce a judgment enforceable here, even where there is no Hong Kong action at all. For a debtor with assets in Hong Kong and a dispute being fought elsewhere, that is often the only route.

What must I prove to get one?

CLIC, the Community Legal Information Centre run by the University of Hong Kong, sets out four requirements. Each one needs evidence on affidavit, not assertion. The table pairs each test with the kind of evidence applicants typically put forward; the examples are illustrative, and the court weighs the whole picture.

Of the four, real risk of dissipation is where most applications stand or fall. A debtor who simply has not paid is not, on that fact alone, a debtor who is about to hide their assets. What persuades a court is conduct pointing to the future: money moving offshore after a demand, a flat sold shortly after the dispute began, a company being wound down or struck off. If your evidence is only the debt, the order is unlikely.

Why is the debtor not told about the application?

Because warning them would defeat the purpose. Order 29, rule 1(2) of the Rules of the High Court (Cap. 4A) allows a plaintiff, where the case is one of urgency, to apply ex parte on affidavit, meaning without notice to the other side. Rule 1(3) goes further: in an urgent case the injunction may be sought before the writ is issued, on terms that the writ is issued afterwards.

The price of a hearing at which only you speak is a duty of full and frank disclosure. CLIC states that the plaintiff must disclose all the important matters within their knowledge, including the points that favour the defendant. The Judiciary's Practice Direction 11.2 adds that any material departure from its standard form of order must be drawn to the judge's attention, and one that is not risks the injunction being discharged at a later hearing.

What am I promising if the court grants it?

The Judiciary's standard form of Mareva order, appended to Practice Direction 11.2 and in use since 3 January 2017, lists the applicant's undertakings in a schedule. The first is the undertaking as to damages: if the court later finds that the order caused the defendant loss and that the defendant should be compensated, the plaintiff will comply with any order the court makes. It is sometimes called the cross-undertaking.

The undertaking is not a formality. If your claim fails, or the order is discharged for non-disclosure, the defendant can ask the court to assess the loss the freeze caused, such as a missed transaction, a cancelled facility or a business that could not pay its suppliers, and to order you to pay it.

The optional bank guarantee is how a court fortifies the undertaking when it doubts that the applicant could pay. A company with thin accounts, or an individual applicant living abroad, should expect to be asked. Arranging a guarantee ties up your own money or credit for as long as the order lasts.

What happens after the order is made?

An ex parte order is a holding measure. The standard form keeps it in force only until a return date, when both sides can be heard. The sequence below follows the standard form and Order 29.

What does the freeze actually stop?

A Hong Kong Mareva order is normally limited to the defendant's assets up to the value stated in the order. It freezes the defendant's dealing with assets, not the defendant's whole life.

• Ordinary living expenses. The standard form lets an individual defendant spend a weekly sum the court fills in.
• Ordinary and proper business expenses. A trading defendant can keep paying staff and suppliers, again within a stated weekly sum.
• Legal advice and representation. The defendant may spend a stated or reasonable sum defending the claim, so the order does not silence them.
• Bank set-off. A bank may still exercise a right of set-off for a facility it granted before it was notified of the order.
• Worldwide reach. A separate standard form freezes assets within or outside Hong Kong, but it does not bind people abroad until a court there declares it enforceable, unless they are the defendant's officers or agents or are otherwise within the Hong Kong court's jurisdiction.
• Penal notice. A defendant who disobeys may be held in contempt of court and may be sent to prison, fined or have assets seized; so may directors of a company defendant.

How much does a Mareva injunction cost?

No official source publishes what the legal work typically costs, so this article does not print a figure. What can be stated is where the money goes. The court fee is the smallest line: sealing a writ in the Court of First Instance costs HK$1,045 under the High Court Fees Rules (Cap. 4D). The rest is solicitor and counsel time on an urgent affidavit and hearing, the return-date hearing, third parties' compliance costs, any bank guarantee, and the contingent liability on the undertaking.

CLIC is blunt about proportion: it is not rational to apply if the amount or value of the assets in dispute is small. The test is not whether you can pay for the hearing. It is whether the claim is large enough, and the dissipation evidence strong enough, to justify an open-ended liability if the order turns out to have been wrong.

Are there cheaper alternatives to a freezing order?

Yes, and some are aimed at a narrower risk. Hong Kong law has three tools that work before judgment and two that work after it.

Should I apply for a Mareva injunction?

• Is the claim large? Weigh the open-ended cost and the undertaking against the sum at stake, as CLIC advises.
• Is dissipation provable, not just feared? Recent transfers, asset sales or deregistration steps, dated and documented, are the heart of the application.
• Do you know where the assets are? An order over unidentified assets is hard to police; bank accounts and land you can name make it work.
• Can you stand behind the undertaking? If the defendant would suffer real loss from a freeze and your claim is uncertain, the undertaking is a live risk. Be ready to show the court you can meet it, or to give a bank guarantee.
• Would a narrower order do? If the fear is that the debtor will leave rather than move money, a prohibition order may be enough.
• Is there a disclosure problem? List every fact that helps the defendant before the hearing. If you cannot disclose it and still win, do not apply.

A Mareva application is prepared in a day and tested at the return date, often by an opponent's counsel reading your affidavit for omissions. Trial AI lets you rehearse that test in advance: the four requirements argued from your own documents, the non-disclosure points the other side will raise, and the questions a judge asks about the undertaking. It is practice, not legal advice, and an urgent freezing application in Hong Kong is a job for a solicitor.