How to Freeze Assets or Bank Accounts Through a Mareva Injunction in Malaysia
Protecting Corporate Assets Before They Disappear
In today’s fast-moving business world, disputes can escalate quickly. Whether it’s a joint venture gone wrong, unpaid construction contracts, or fraudulent asset transfers, corporate creditors often face a harsh reality — by the time you win in court, the other side may have already dissipated their assets.
That’s where a Mareva injunction — commonly known as an asset freezing order — becomes one of the most powerful tools in Malaysian commercial law.
A Mareva injunction allows a company or individual to freeze the assets or bank accounts of another party before judgment is obtained. It preserves the status quo and ensures that if you win your case, there will still be assets available for recovery.
At JY Ko Advocates & Solicitors, our litigation team frequently advises and represents corporate clients in obtaining urgent Mareva injunctions to safeguard assets and prevent fraudulent transfers. This article explains how it works, the legal requirements, and what practical steps your business should take.
What Is a Mareva Injunction?
A Mareva injunction is a court order that restrains a defendant from removing, disposing of, or dealing with their assets — including money in bank accounts — pending the outcome of a lawsuit.
It does not give ownership of the assets to the applicant but prevents the defendant from dissipating them, ensuring that any eventual court judgment can be enforced.
This form of injunction is particularly important in corporate and commercial disputes, where significant sums or corporate assets are at risk of being transferred out of reach.
At JY Ko Advocates & Solicitors, we often deploy Mareva injunctions as part of a broader litigation strategy to secure clients’ financial interests and preserve enforceability of future judgments.
Legal Principles: The Three Key Requirements
Under Malaysian law, the principles governing Mareva injunctions were reaffirmed in numerous landmark cases, including the recent High Court decision in Merpati Selamat Sdn Bhd v KMDI Holdings Sdn Bhd [2025] CLJU 1629.
The court restated that to obtain a Mareva injunction, the applicant must prove three essential elements:
1. A Good Arguable Case
The applicant must show a bona fide and arguable claim — not necessarily that they will win, but that the case has genuine merit. In Merpati Selamat, the plaintiff was able to show that it had completed construction works and was owed RM7 million, supported by clear documentation and correspondence.
2. Defendant Has Assets Within Malaysia
The applicant must demonstrate that the defendant has assets within the jurisdiction, such as bank accounts, property, or shares. Even without exact balances, the mere existence of accounts may suffice.
3. Real Risk of Dissipation
Finally, there must be a genuine risk that the defendant may dispose of, transfer, or hide their assets before the case concludes. Courts often infer this risk when a defendant shows a lack of financial transparency, fails to file audited accounts, or faces multiple lawsuits from other creditors — as seen in Merpati Selamat.
JY Ko Advocates & Solicitors assists clients in gathering the necessary financial evidence and affidavits to establish all three criteria effectively before filing.
Case Illustration: Merpati Selamat Sdn Bhd v KMDI Holdings Sdn Bhd [2025] CLJU 1629
In this 2025 decision, the High Court of Malaya at Shah Alam granted a Mareva injunction in favour of the plaintiff, Merpati Selamat Sdn Bhd, against the defendant, KMDI Holdings Sdn Bhd, freezing its assets and bank accounts.
The dispute arose from two large-scale housing projects in Pahang, where the plaintiff — a contractor — claimed RM7 million for completed works that remained unpaid. The court found that:
- The plaintiff had a good arguable case based on substantial documentation and evidence of work done.
- The defendant had bank accounts within Malaysia (with RHB and Maybank).
- There was a real risk of asset dissipation, especially since the defendant had not filed any audited financial statements and had similar disputes with other contractors.
The court, citing Zainal Abidin v Century Hotel Sdn Bhd and Aspatra Sdn Bhd v Bank Bumiputra Malaysia Bhd, emphasized that in today’s era of digital transfers, funds can vanish with a single click — making such injunctions vital for justice.
As a result, the High Court froze the defendant’s assets, subject to a limited monthly allowance for operational expenses, ensuring that the defendant could continue minimal business while preventing abuse of its funds.
The Merpati Selamat case demonstrates how a well-prepared Mareva application can make the difference between securing your claim and chasing empty assets later.
When Should a Company Apply for a Mareva Injunction?
Businesses should act quickly and decisively when there is evidence that a debtor or contracting party may be moving funds, selling property, or otherwise evading obligations.
Common corporate scenarios include:
- Unpaid commercial contracts (construction, supply, joint ventures).
- Fraudulent transfers of company assets to related entities.
- Directors diverting company funds for personal use.
- Breaches of trust or fiduciary duties within partnerships or subsidiaries.
- Corporate disputes where one party is stripping company assets before litigation concludes.
At JY Ko Advocates & Solicitors, our lawyers can help your company evaluate whether there is sufficient evidence of asset dissipation and file an urgent application — often within days — to freeze bank accounts and safeguard your financial position.
⚖️ Don’t wait until the money is gone. Early action is the key to protecting your company’s right to recovery.
How to Apply for a Mareva Injunction in Malaysia
The process of obtaining a Mareva injunction is technical, urgent, and evidence-driven. Here’s a simplified overview of the legal process:
Step 1: Legal Consultation and Case Assessment
The first step is to consult an experienced litigation lawyer to assess whether your claim satisfies the three criteria. At JY Ko Advocates & Solicitors, we evaluate the available evidence, contract terms, and financial risks before proceeding.
Step 2: Filing an Ex Parte Application
In urgent situations, a Mareva injunction can be obtained ex parte (without notifying the other party) to prevent them from transferring assets. The application includes:
- An affidavit detailing the facts and risk of dissipation.
- Documentary evidence (emails, bank details, company searches).
- Draft court order and legal submissions.
Step 3: Inter Parte Hearing
After the ex parte order is granted, an inter parte hearing (with both parties present) follows. The defendant is given the opportunity to contest the injunction.
In Merpati Selamat, the defendant’s lawyer failed to attend the inter parte hearing — resulting in the injunction being upheld.
Step 4: Court Order Served to Banks and Parties
Once the Mareva order is issued, it must be served on the relevant banks and the defendant. Banks are then legally bound to freeze the specified accounts.
Step 5: Enforcement and Ongoing Compliance
The order remains in effect until the court discharges it or the case concludes. It’s crucial that the applicant acts in good faith, provides full disclosure, and complies with any court directions (such as covering reasonable business expenses).
🏛️ At JY Ko Advocates & Solicitors, our lawyers ensure your application is strategic, compliant, and persuasive from the outset — avoiding procedural pitfalls that can lead to dismissal.
Common Mistakes Companies Make
Despite its effectiveness, many corporate applicants undermine their own cases due to procedural or evidential errors. Some common pitfalls include:
- Insufficient evidence of risk of dissipation.
- Delay in taking action, allowing funds to be transferred out.
- Failure to disclose material facts to the court.
- Vague or overly broad injunction wording, which may be struck out.
- Misuse of injunctions as leverage, which courts disapprove.
Professional handling and timely filing are critical. JY Ko Advocates & Solicitors advises clients to document all communications, collect financial proof, and act swiftly to maintain credibility before the court.
Strategic Advantages of a Mareva Injunction for Companies
- Prevents Asset Stripping — The order ensures the defendant cannot move or dissipate assets during litigation.
- Strengthens Negotiating Power — A successful injunction often encourages settlement or repayment.
- Protects Reputation — Demonstrates to shareholders and regulators that your company acts decisively to secure its interests.
- Supports Cross-Border Enforcement — Malaysian Mareva injunctions can complement foreign proceedings or arbitration.
- Ensures Fair Judgment Enforcement — Even if the case takes years, the defendant’s assets remain intact.
💼 JY Ko Advocates & Solicitors combines commercial awareness with litigation experience to help clients use Mareva injunctions strategically as both a shield and a sword.
Balancing Commercial Reality: The Court’s Approach
Courts are cautious not to misuse Mareva injunctions as premature punishment. The balance of convenience must favour the applicant. In Merpati Selamat, the High Court allowed limited withdrawals of RM300,000 per month for the defendant’s operations — ensuring business continuity while protecting the plaintiff’s claim.
This reflects the commercial balance courts strive for: protecting genuine claims without crippling legitimate businesses.
How JY Ko Advocates & Solicitors Can Help
At JY Ko Advocates & Solicitors, our litigation team has extensive experience representing companies in Mareva injunctions, corporate disputes, and commercial recovery actions.
We have successfully obtained injunctions to freeze bank accounts, restrain asset transfers, and secure client interests in high-stakes disputes involving millions in claims.
Our services include:
- Assessing whether your case qualifies for a Mareva injunction.
- Preparing and filing urgent ex parte applications.
- Gathering financial and corporate evidence for court.
- Representing clients in injunction hearings and enforcement.
- Advising on cross-border or post-judgment asset recovery.
⚖️ If you suspect your business partner or debtor is moving assets, act fast. Contact JY Ko Advocates & Solicitors today for immediate legal advice.
FAQs on Mareva Injunctions in Malaysia
1. Can a company apply for a Mareva injunction?
Yes. Both individuals and companies can apply for a Mareva injunction to prevent another company or person from dissipating assets.
2. How long does it take to get a Mareva injunction?
If the situation is urgent, an ex parte Mareva injunction can be obtained within a few days, depending on court availability and document readiness.
3. Can the defendant still operate their business?
Yes. Courts usually allow reasonable withdrawals for operational expenses, as in Merpati Selamat v KMDI Holdings, where RM300,000 per month was permitted.
4. What happens if the defendant breaches the injunction?
Breaching a Mareva injunction is a serious contempt of court, which may result in fines, imprisonment, or additional legal consequences.
5. Is a Mareva injunction the same as a judgment?
No. It’s a temporary protective measure. It doesn’t decide the case but ensures assets remain available for enforcement if the applicant wins later.
Conclusion: Take Swift Action to Secure What’s Rightfully Yours
In the fast-paced world of corporate disputes, hesitation can be costly. The Merpati Selamat case shows that with the right legal strategy, a company can effectively safeguard its interests before a judgment is even delivered.
Whether your concern involves unpaid contracts, fraudulent transfers, or potential insolvency, a Mareva injunction could be the key to ensuring your company’s financial recovery.
🕒 Time is critical. If you suspect a counterparty is moving assets, consult JY Ko Advocates & Solicitors immediately.
Our experienced team will evaluate your case, file urgent applications, and help you protect your corporate assets under Malaysian law.
JY Ko Advocates & Solicitors
Corporate & Commercial Litigation | Asset Protection | Injunctions | Dispute Resolution
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Disclaimer: The above proposition is subject to actual facts and circumstances and shall never be referred as the actual law without seeking legal advice. Consult us for more information!