It has been 50 years since the Court of Appeal took the then-radical step of restraining a defendant from disposing of assets before trial in Mareva Compania Naviera SA v International Bulkcarriers SA [1980] 1 All ER 213, a landmark English case.
That decision - and the form of relief it gave rise to - has undoubtedly reshaped commercial litigation across common law jurisdictions.
But for practitioners dealing with offshore structures and international asset recovery, it is crucial to recognise that the rules change once you cross the Channel.
In Guernsey, freezing injunctions are rooted in statute, not in equity. While the orders look familiar, and English jurisprudence is highly influential, the underlying legal framework is distinct.
This article sets out five key points every onshore lawyer should understand about freezing relief in Guernsey: its origins, test, scope, and some of the features that make it especially effective in cross-border cases.
Guernsey statutory foundation, but English common law shape
Freezing injunctions in Guernsey are granted under section 1 of the Law Reform (Miscellaneous Provisions) (Guernsey) Law, 1987 (the "Law"). That provision gives the Royal Court of Guernsey (the "Royal Court") a general power to grant interim injunctions, including freezing orders. There is no equivalent general equitable jurisdiction à la Mareva.
But while the source of the jurisdiction differs, its application often tracks closely with English case law. Guernsey courts regard English authorities as highly persuasive, and orders typically follow the standard form prescribed by the English Civil Procedure Rules.
The courts have embraced the Mareva principles and adapted them through local decisions, building a body of law that reflects both statutory discretion and common law logic.
The result is a regime that feels familiar to English litigators, while still allowing for jurisdiction-specific nuances.
Archaic but intact: the arrêt conservatoire
Long before Mareva, Guernsey had its own form of pre-judgment asset protection. The arrêt conservatoire, derived from Norman customary law, permitted the seizure of tangible property to prevent dissipation pending litigation.
The arrêt is an in rem remedy - it operates directly on the property, not by restraining the defendant’s conduct. It was historically used to immobilise goods (and even vessels and vehicles) but has long since been overtaken by the flexibility and broader reach of the modern freezing injunction.
It hasn’t been used in a reported case in over 20 years, and its practical utility today may be limited. But it remains part of Guernsey law, and its continuing existence underscores the jurisdiction’s unique fusion of civil and common law traditions, and its continuing flexibility.
The test for freezing relief
The Royal Court will typically expect the applicant to demonstrate three core elements:
- a good arguable case in the underlying proceedings (whether domestic or, in some cases, foreign);
- a real risk of dissipation - i.e. a risk that assets may be concealed, moved, or diminished so as to frustrate a judgment; and
- that it is just and convenient for the court to grant relief.
These thresholds are broadly consistent with those applied in England.
Urgent, ex parte applications are possible and often listed within 24 hours. The Royal Court will require the usual undertakings (including to compensate the respondent if the order proves unjustified), and may also require fortification by way of payment into court or other security.
Supporting foreign proceedings: the “exceptional circumstances” gateway
Under section 1(7) of the Law, the Royal Court may grant freezing injunctions in support of proceedings outside the jurisdiction - but only where “exceptional circumstances” exist.
This phrase might sound daunting, but in practice it functions more as a reminder for the court to proceed with care than as a substantive obstacle, and practitioners should not be unduly deterred. The Royal Court has consistently taken a pragmatic and flexible approach in applying this gateway.
In Seed International Ltd. v Tracey (Court of Appeal judgment 55/2003), the Court of Appeal confirmed that injunctions in aid of foreign proceedings are available where the usual Mareva-style criteria are met and there is a sufficient connection to Guernsey (typically, the presence of assets or fiduciaries in the jurisdiction).
This makes Guernsey an effective forum for obtaining mirror injunctions or ancillary relief to preserve assets pending resolution of a foreign claim - especially in fraud or enforcement cases.
Ancillary disclosure orders: a distinctive strength
One of the features that sets Guernsey freezing injunctions apart is the willingness of the courts to grant robust ancillary disclosure orders. These often go further than what would be available in equivalent proceedings in England.
Orders may compel banks, fiduciaries, or others to disclose the location, nature, and value of assets - even where the claim is not proprietary in nature. In Seed, the Court of Appeal affirmed that such orders can have a broader ambit than the freezing order itself, and are not limited to proprietary tracing claims.
These orders are typically to be complied with within timeframes as short as three business days. They add real force to the injunction and are a key tactical consideration when acting swiftly to identify and lock down assets.
Conclusion
Guernsey may be a familiar jurisdiction for international finance, but its legal system - and particularly its freezing injunction framework - retains a character of its own.
Statutory in foundation, but shaped by English common law, the civil freezing order regime offers a blend of flexibility and predictability that provides real advantages to cross-border litigants.
For onshore lawyers, the key takeaway is simple: if the target holds assets or maintains fiduciary relationships in Guernsey, the Royal Court is an effective and responsive forum for urgent, effective interim relief.
If you would like any further information, please get in touch with your usual Bedell Cristin contact or one of the contacts listed.
