BANK OF INDIA v. BHAGWANDAS KEWALRAM MURJANI AND OTHERS

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J U D G M E N T

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Cons, V.-P.:

1. In the two proceedings with which we are now concerned the Bank of India, as Plaintiff, claims against Murjani Industries (HK) Limited for repayment of money advanced by way of general banking facilities to the extent of a little under US$11 million. It claims against all other Defendants as guarantors.

2. There have been other interesting proceedings before another division of this Court in connection with one of the Defendants, but all we are concerned with today is the Mareva Injunction which was granted on the 14th March by Duffy J. against all the Defendants, then discharged on the 4th of this month by Barnett J. An appeal against that decision is contemplated and all being well will be heard in this Court on the 20th of this month.

3. Barnett J. refused a stay pending appeal, or for shorter period in which to make application to this court. He was confident that such assets as were shown to be available would not be dissipated. However, two days ago a single judge of this Court granted an interim stay until today. We are now asked to stay further, until he hearing of the appeal.

4. In his judgment discharging the Mareva, Barnett J. dealt with many matters. The transcript extends to some 25 pages. We are not concerned with the contents of the judgment, except in so far as we have to be satisfied that the contemplated appeal is not hopeless or frivolous. We have been referred to the affidavit which was before the judge and to the proposed matters of appeal; counsel on either side has addressed us at length on what might be termed the merits. All I wish to say in that regard, at this stage, is that I am not satisfied that the appeal; will fall into the category of hopeless or frivolous.

5. It is then necessary to decide what should happen for the next two weeks. Matters that I take into account in coming to my conclusion are that the Mareva makes provision for the limited companies affected by it to draw without limit for the conduct of their everyday business, and for the individual Defendants each to draw $50,000 a month for their own private needs. There has been no suggestion that the amount is not sufficient. No particular hardship likely to be suffered by the Defendants has been shown, indeed they put no evidence before the judge. If particular hardship were to come up with in the next fortnight it would be simple to make application for a special dispensation. Finally the Plaintiffs have given an undertaking in damages, but of course, there is no undertaking from the Defendants.

6. Additional to those safeguards I cannot discount the possibility that, despite his confidence, the judge may perhaps be wrong; if so the Plaintiff's success in the subsequent appeal may be of no benefit to him. In this particular instance that does seem to me to be sufficiently special to warrant a continuation of the stay.

7. I appreciate the similarity that Mr. Thomas has shown between the present situation and that of a plaintiff who applies ex parte to a judge for a Mareva and is then refused. There is then no possibility of a stay pending appeal. But there is this difference, I think, in that in the present instance the Plaintiff has already obtained an order from the Court, albeit ex parte, but upon substantially the same evidence that later was held to lead to a different conclusion. Thus what could at one stage be correctly described as a privilege, has become a conferred benefit, which, if wrongly taken away, could well not permit of restoration.

8. I accept that a Mareva is an exceptional remedy, particularly a worldwide Mareva; it will be for this Court to decide in due course, not now, whether the grant was justified in the present instance. In the meantime I would exercise my discretion to continue the Mareva until the disposal of the appeal by this Courts. As no Notice of Appeal has yet been lodged, the Plaintiff should undertake to serve its Notice within 48 hours and to prosecute the same thereafter with all due diligence.

Kempster, J.A.:

9. Mr. Thomas asks us to exercise our discretion on the footing that, on substantially the same evidence, Duffy J. was wrong in granting the Plaintiff a Mareva Injunction worldwide after a hearing ex pane and Barnett J. was right after a hearing inter panes in discharging it. We cannot act on that or the converse hypothesis. It is a traditional role for the courts in an interlocutory contest to preserve the existing position and, for the present purposes, I agree with my Lord that "the existing position" was that prevailing prior to the time when Barnett J. discharged the Mareva injunction. The preservation of the status quo, of course, is subject to prejudice to the Respondent pending an appeal. None has been shown or is sought to be shown. Further, we are acting here in relation to the suggested need for special reasons when granting a stay pending appeal in a new and rapidly developing interlocutory field.

10. For these reasons as well as those given by my Lord and on the bas is of the undertaking he has described I too would grant a stay which would permit the Mareva Injunction granted by Duffy J. to continue to run until the outcome of the appeal.