How to Freeze a Debtor’s Assets in Malaysia Using a Mareva Injunction (Freezing Order)

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💼 Introduction: Can You Stop a Debtor from Hiding Their Assets in Malaysia?

If you're chasing unpaid debts in Malaysia, one of the biggest risks is that your debtor may sell, hide, or transfer assets before you can enforce a court judgment. By the time you win the case, there may be nothing left to recover.

The solution? Apply for a Mareva injunction, also known as a freezing order, to protect your legal rights and stop the debtor from dissipating their assets.

❄️ What Is a Mareva Injunction in Malaysian Law?

A Mareva injunction is a court order that temporarily freezes the assets of a debtor to prevent them from being disposed of while legal proceedings are ongoing.

It is available under Order 29 of the Rules of Court 2012 (Malaysia) and is a powerful tool used in commercial litigation, especially in debt recovery and fraud cases.

✅ When Should You Apply for a Mareva Injunction?

To succeed, you must show:

1. A strong case (prima facie claim) - Your debt claim must be legitimate and supported by evidence.

2. A real risk of asset dissipation - Examples include the debtor transferring property to family members, selling land, or emptying bank accounts.

3. That it is fair to grant the injunction - The court will consider the balance of convenience and whether damages would be an adequate remedy.
   

🔒 What Kind of Assets Can Be Frozen?

A Mareva injunction can apply to both movable and immovable assets, such as:

• Malaysian bank accounts

• Company shares

• Land and property titles

• Vehicles, machinery, or business equipment

• Cash or cryptocurrency (if traceable)
  

⚖️ How to Apply for a Mareva Injunction in Malaysia

This is typically done ex parte, meaning without informing the debtor, to prevent them from moving their assets before the court hearing.

Documents and steps include:

• Filing a civil suit (e.g., breach of contract, unpaid invoices, fraud)

• Preparing a Notice of Application and Supporting Affidavit

• Including concrete evidence of the debt and risk of asset dissipation

• Providing an undertaking in damages (you may have to compensate the debtor if the injunction is wrongly granted and the defendant suffers loss as a result)
  

📌 Example of a Mareva Injunction in Debt Recovery

Let’s say your business is owed RM750,000 from a supplier who has gone silent. You find out he recently transferred land to his wife and liquidated his stock.

With your lawyer's help, you apply for a Mareva injunction and obtain a court order freezing his bank accounts and blocking the property transfer. This ensures that when you win your case, the assets will still be there for enforcement.

⚠️ Key Considerations Before Filing

• Cost: This is a serious legal application that requires strong evidence and urgent action.

• Risk: If your application is weak or malicious, the debtor can sue you for damages.

• Not automatic: The court evaluates each case carefully. A vague suspicion is not enough.
  

📈 When to Use a Mareva Injunction for Debt Recovery

You should consider a Mareva injunction if:

• The amount owed is significant

• There’s clear indication that the debtor is moving, hiding, or liquidating assets

• You want to preserve assets while the legal case proceeds

Many creditors wait too long. By the time judgment is granted, the debtor’s assets are gone. Don’t let that happen to you.

🧠 Final Thoughts: Use It Before It’s Too Late

A Mareva injunction is one of the most effective legal strategies for protecting your rights as a creditor in Malaysia. It’s not just about winning a lawsuit - it’s about actually recovering the money you’re owed.

If you’re dealing with a debtor who seems to be hiding assets or preparing to run, talk to a lawyer immediately. Act fast before the assets disappear.

📞 Need Help?

If you’re considering legal action to recover a debt and want to protect your position with a Mareva injunction, our firm can help.

Contact us today for a confidential case review.