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INTRODUCTION
Interlocutory injunctions prohibiting the disposal of assets by a defendant were, in general, regarded to be contrary to the judicial practice in England until about 1975. There were two primary reasons for this: first that there did not exist any statutory provision or rule of court to support such a relief; and second that the judicial attitude maintained that courts did not have any inherent power to grant such an order.
1 S 45 of the Supreme Court of Judicature (Consolidation) Act 1925 provides, inter alia , that:
'If it appears that the debt is due and owing -- and there is a danger that the debtor may dispose of his assets so as to defeat it before judgment -- the court has jurisdiction in a proper case to grant an interlocutory judgment so as to prevent him disposing of those assets.'
But, courts did not exercise this power for granting interlocutory injunctions prohibiting the disposal of assets by a defendant until 1975 when Nippon Yusen Kaisha v Karageorgis and Another2 was decided.
In this case, the plaintiffs, Japanese shipowners let three ships on charter to the defendants, Greek charterers. After making some hire payments in respect of two ships, the defendants defaulted in making payments. The plaintiffs believed that the defendants had funds with banks in London, which would be sent out of the jurisdiction unless action was taken to retain them. The plaintiffs made an
ex parte application for an interim injunction to restrain the defendants from removing any of their assets from the jurisdiction. The High Court Judge refused to grant the application. The plaintiffs appealed. The Court of Appeal allowed the appeal on the grounds that:
'... since there was a strong prima facie
case that unpaid hire was owing and unless an injunction was granted funds ... might be removed from the jurisdiction and be irrecoverable, it was just or consistent within the meaning of Section 45 of the Supreme Court of Judicature (Consolidation) 1925 to grant an injunction ... until trial or further order should be made.'
Lord Denning, MR stated, inter alia , that:
'It has never been the practice of the English Courts to seize assets of a defendant in advance of judgment or to...