Mauritius
1. Are freezing orders (or their equivalent referred to below) available in civil legal proceedings in this jurisdiction and what is their effect?
Yes, commonly known as Mareva injunctions or freezing orders. The respondent is prohibited from dealing with/disposing the assets referred to in the freezing order until the determination of a main case or further order of the Court.
2. Are other interim orders commonly made in conjunction with a freezing (or equivalent) order?
The Court has the inherent power to make ancillary orders (such as an order for disclosure of assets) to assist the efficacity of the freezing order. In practice however, other interim orders are usually made upon the request of the applicant.
3. Briefly what is the relevant legal test?
(i) The applicant has a good arguable case in the underlying substantive claim or prospective claim;
(ii) the respondent has assets within or outside (if a worldwide freezing order) the jurisdiction of Mauritius;
(iii) there is a real risk of unjustified dissipation (for example, for the purposes of frustrating or impeding the satisfaction of a judgment or award); and
(iv) it is just and convenient to grant the freezing order.
4. Briefly what is the process for obtaining a freezing (or equivalent) order?
The applicant makes an application for a Mareva injunction to the judge in chambers, in particular setting out in an affidavit the reasons for the application and the basis on which the relevant test is met. An application can be made on or without notice to the respondent. Especially where it is made without notice, the applicant has a duty of full and frank disclosure and there will be a later return hearing at which the respondent can challenge the order assuming it is made.
5. Does the applicant have to provide any form of security or commit to compensation if its claim is ultimately unsuccessful and any freezing (or equivalent) order granted causes loss and damage to the respondent?
Yes. The applicant must provide an undertaking in damages to the respondent (which can in certain circumstances be ordered to be backed by security).
6. Can it be sought against third parties?
Yes, a third party to the underlying proceedings or prospective proceedings may be made a party to a freezing order where there is good reason to suppose that its assets are in fact the assets of the defendant in the underlying litigation or will be available to the defendant to meet a judgment or arbitral award. Equally a third party which is not a party to the freezing order (for example, a financial institution holding the defendant’s assets) which is notified of it is still required to ensure that it does not knowingly assist the respondent in breaching the terms of the freezing order.
7. What assets are covered by a freezing (or equivalent) order?
Any tangible or intangible assets provided they are not perishable, whether within the jurisdiction (a domestic freezing order) or outside (a worldwide freezing order).
8. Can a freezing (or equivalent) order be made in support of substantive proceedings abroad?
Yes.
9. Can a freezing (or equivalent) order be made in support of arbitration proceedings or awards?
Yes.
10. At what stage of proceedings can a freezing (or equivalent) order be sought?
At any stage, including prior to commencing the claim (although the Court will expect the applicant to issue its claim promptly) or following judgment to assist with enforcement.
11. Are there typically any exceptions to the general prohibition on the respondent’s use of assets subject to a freezing (or equivalent) order?
Yes. The order may generally provide that the respondent may deal with their assets:
(i) over and above any amount concerned by the freezing order;
(ii) in the ordinary and proper course of business;
(iii) for ordinary living expenses; and/or
(iv) for legal expenses.
12. What happens after a freezing (or equivalent) order is granted?
The applicant will typically notify third parties (such as banks) of the freezing order when they might hold the respondent’s assets. Assuming the original order was obtained without notice, there will be a return hearing, which date is stated on the face of the order, at which the respondent may challenge the order. At this point the original order will usually either be set aside, made interlocutory or replaced with a Court-sanctioned undertaking which has broadly the same effect as a freezing order until trial.
13. Who pays the costs of the application for a freezing (or equivalent) order?
The applicant usually incurs his own legal expenses at the outset, and the Court has the discretion to make an order for the respondent to pay prescribed costs to the applicant when the applicant is successful in the application for freezing order and/or the underlying main case.
14. What protections are there typically in a freezing (or equivalent) order for third parties to such orders?
(i) A third party is not prevented from exercising any rights of set-off arising prior to its notification of the freezing order.
(ii) A third party does not need to enquire as to the application of any money withdrawn by the respondent if the withdrawal appears to be permitted by the freezing order.
(iii) A freezing order only affects third parties outside of the jurisdiction in certain circumstances.
(iv) As regards assets outside of the jurisdiction, a freezing order does not prevent a third party from complying with (a) what it reasonably believes to be its obligations under the law of the country where the assets are located or the law of any contract between itself and the respondent or (b) any orders of the Courts of the country where the assets are located.
(v) Applicants undertake to pay the reasonable costs of any third party which have been incurred as a result of the order, and to compensate them for any loss caused by it.
15. What are the consequences of breach of a freezing (or equivalent) order?
A respondent who disobeys a freezing order may be held in contempt of Court and may be fined or imprisoned and be subjected to any order as the Court deems fit in the circumstances. A third party may only be in contempt of Court where they knowingly help or permit the respondent to breach the terms of the order.
16. Does a third party notified of (but not a party to) a freezing (or equivalent) order owe a duty of care to the applicant (meaning it can be liable to the applicant for non-compliance)?
Yes, especially when the said third party, although not being a party to the application, is referred to in the order (for example, financial institutions) and upon which the order is formally served.
17. Can a freezing (or equivalent) order be enforced abroad?
Yes, in principle, although subject to the laws of the relevant jurisdiction. However, enforcement itself will be a matter of local law.
18. Can freezing (or equivalent) orders from overseas jurisdictions be enforced in this jurisdiction?
Yes, in principle, subject to obtaining a judgment (exequatur) from the Supreme Court of Mauritius declaring the orders executory in Mauritius.
Contacts
Nitish Hurnaum Partner – Head of the Litigation and Dispute Resolution Eversheds Sutherland Port Louis, Mauritius nitishhurnaum@eversheds-sutherland.mu www.eversheds-sutherland.com Arusha Adimoolam Associate Eversheds Sutherland Port Louis, Mauritius arushaadimoolam@eversheds-sutherland.mu www.eversheds-sutherland.com
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