Interlocutory injunctions must preserve the status quo when a good arguable case exists and when there is a risk of asset dissipation, protecting against fraudulent claims.

Lee Heng Cheong JCA:

Introduction

[1] There are 20 Appeals before this Court. They comprised 4 sets of appeals:

(i) The first set is Appeal No 1130, which is the appeal against the refusal of the Learned Judicial Commissioner ("Learned JC") to grant inter partes, a Mareva injunction against the 40 Respondents pending the trial of the High Court Suit. The 40 Respondents comprised 1 Labuan company, shareholders and directors of 24 Labuan companies ("Mareva Respondents").

(ii) The second set of appeals, namely Appeals No 1127-1129, 1131-1133 and 1139, are against the setting aside of the Appellant's ex parte Mareva Order against the same 40 Respondents.

(iii) The third set of appeals, namely Appeals No 1124-1126, 1128, 1618, 1620, 1623 and 1624 are against the setting aside of the ex parte Anton Piller Order against 10 Respondents comprising the 4 Labuan trust companies and 6 directors ("AP Respondents").

(iv) The fourth set of appeals, namely Appeals No 1134-1137, are against the setting aside of the ex parte Order Uplifting Labuan Secrecy.

Background

[2] When the Appellant who is the Plaintiff, filed the Suit in the Labuan High Court ("LHC"), the Appellant simultaneously applied for and obtained ex parte orders for a Mareva injunction ("the ex parte Mareva Order") and an ex parte Anton Piller Order ("the ex parte AP Order").

[3] The Appellant also sought an Order, lifting the secrecy in the Labuan offshore jurisdiction which had denied the Appellant, visibility of the activities of Labuan Companies and the Labuan Trust Companies ("Order Uplifting Labuan Secrecy").

[4] The Respondents filed their respective applications to set aside the Appellant's ex parte Mareva and Anton Piller Orders, the Order Uplifting Labuan Secrecy and also the Appellant's inter partes application for a Mareva Order.

The Decision Of The Labuan High Court

[5] In the LHC, the Learned JC after hearing submissions, made the following orders namely:-

(i) That the inter partes Mareva Injunction application under encl 5 is dismissed with costs;

(ii) An order in terms of the Notices of Application filed by the Respondents to set aside the Mareva Order under Enclosure(s) 141, 149, 155, 189, 253, 364 and 368 with costs;

(iii) An order in terms of the Notices of Applications of the Respondents to set aside the Anton Piller Order under Enclosure(s) 140, 145, 156 and 190 with costs; and

(iv) An order in terms of the Notices of Applications of the Respondent to set aside the Secrecy Order under Enclosure(s) 142, 148, 183 and 191 with costs.

[6] The Appellant, being aggrieved by the LHC's various orders. appealed against them.

[7] We heard the appeals, after due deliberation and having carefully considered the submissions of both parties, we found that there are merits in the appeals and unanimously allowed the appeals with costs. We propose to give reasons for our decision with respect to the appeals.

[8] For ease of reference, the Plaintiff in the High Court below shall be referred to as the Appellant, and the Defendants in the High Court shall be referred to as the Respondents respectively.

The Appellant's Pleaded Claim

[9] The Appellant is the Customs and Tax Administration of the Kingdom of Denmark (" SKAT"), seeking to recover losses of approximately RM940 million which, the Appellant claims, was caused by a fraud perpetrated by the Respondents.

[10] The Appellant contended that the fraud which is committed from Labuan, Malaysia, is part of a worldwide scheme, to defraud the Appellant through various entities in the UK, USA, Dubai, and Malaysia. The Appellant was defrauded of approximately DKK 12 billion through this worldwide scheme between 2012 to 2015.

[11] The Appellant also contended that Malaysia was utilised because of the Double Taxation Avoidance Agreement with the Kingdom of Denmark ("DTA"). Under the DTA, a Malaysian tax resident who owns Danish corporations' shares and earns dividends on those shares is entitled to a refund of the monies withheld by the Appellant as