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2026 MarsdenLR 1556
HIGH COURT MALAYA KUALA LUMPUR
ZALITA ZAIDAN, JC
7-ELEVEN MALAYSIA SDN BHD – Appellant
Versus
SAYUTI ISMAIL & ORS – Respondent
[Civil Suit No: WA-22NCvC-697-12/2025]
A Mareva injunction requires strict proof of a good arguable case, identified assets within the jurisdiction, and a real risk of asset dissipation. Mere suspicion of misconduct is insufficient to warrant this drastic remedy; however, a disclosure order may be issued to facilitate the investigation and asset preservation.
Headnote:(A) Specific Relief Act 1950 - Section 50 - Injunctive relief - Mareva Injunction - Three-fold test - An applicant must demonstrate: (i) a good arguable case, (ii) assets within the jurisdiction, and (iii) a real risk of dissipation of assets - Exercise of power must be judicious. (Paras 10, 20)
(B) Mareva Injunction - Standard of proof - Mareva injunction is a drastic remedy requiring stringent proof - Suspicion of fraud or misconduct, without concrete evidence of asset existence or risk of dissipation, is insufficient to justify such an order. (Paras 21, 27, 30, 34)
(C) Disclosure Order - Purpose - A disclosure order may be granted as an ancillary relief to assist in locating misappropriated funds and preserving assets pending trial, even if the primary application for a freezing order is refused. (Paras 32, 35, 36)
Facts of the case:
The plaintiff, a large retail entity, alleged that two former employees orchestrated a fraudulent payroll scheme involving fictitious staff members to divert company funds. After the employees resigned, the plaintiff obtained an ex-parte Mareva injunction. The plaintiff subsequently applied for the continuation of that injunction and a disclosure order, claiming the employees had manipulated attendance data to facilitate salary payments into accounts held by ghost employees, which were then diverted for the defendants' benefit.
Findings of Court:
The court found that while the plaintiff raised serious allegations, the evidence supporting the Mareva injunction was rooted in suspicion rather than concrete proof. Specifically, there was a failure to produce bank statements or financial records linking the alleged fraud to the defendants' current assets, and the evidence of a risk of dissipation was speculative. However, the court determined that a disclosure order was necessary to ascertain the location of misappropriated funds and to facilitate a fair trial.
Issues: Whether the plaintiff established the three-fold test (good arguable case, assets within jurisdiction, and real risk of dissipation) required to maintain a Mareva injunction, and whether a disclosure order was appropriate under the circumstances.
Ratio Decidendi: A Mareva injunction is a drastic remedy that requires strict adherence to the three-fold test; suspicion alone cannot satisfy these criteria. A court will not presume the existence of assets within the jurisdiction simply based on citizenship. However, a disclosure order may be granted to aid the discovery of truth and location of disputed funds even where the threshold for a freezing order is not met.
Result: Application for Mareva injunction dismissed; Disclosure order allowed.
| Table of Content |
|---|
| 1. summary of facts involving employee fraud and application for injunctions. (Para 1 , 2 , 3 , 4 , 5 , 6 , 7 , 8 , 9) |
| 2. requirement to show a good arguable case for mareva injunctions. (Para 10 , 11 , 12 , 13 , 14 , 15 , 16 , 17 , 18 , 19 , 20 , 21 , 22 , 23) |
| 3. necessity of evidence for assets located within the jurisdiction. (Para 24 , 25 , 26 , 27) |
| 4. burden of proving a real risk of asset dissipation. (Para 28 , 29 , 30 , 31) |
| 5. granting disclosure orders to preserve evidence and ascertain financial records. (Para 32 , 33 , 34 , 35 , 36 , 37) |
JUDGMENT
Enclosure 3 - Plaintiff's Application For A Mareva Injunction And A Disclosure Order
Introduction
[1] This is the plaintiff's application for a Mareva Injunction and a Disclosure Order under encl 3 against the 1st Defendant and the 2nd Defendant only which was heard on 8 April 2026. I allowed encl 3 partially, for a disclosure order as prayed at paras 4 and 5 and disallowed the prayers for a Mareva Injunction.
Background Facts
[2] The plaintiff is a private limited company incorporated in Malaysia and the owner and operator of the single largest convenience store chain in Malaysia with more than 2,600 stores nationwide (encl 2 and encl 4).
[3] The 1st Defendant and the 2nd Defendant were the former employees of the plaintiff. The 1st Defendant is an employee of the plaintiff from 20 April 28 and 4 August 2025 and his last position was an Operations Manager (encl 4, para 5). The 2nd Defendant was an employee of the plaintiff from 24 January 2014 and 31 July 2025 and was a Supervisor of the plaintiff (encl 4, para 6). For the purpose of this judgment, at times the 1st Defendant and the 2nd Defendant are referred collectively as "the 1st and 2nd Defendants".
[4] In December 2024, the plaintiff received a whistleblowing complaint and an internal investigation was conducted by the plaintiff between February and August 2025. The plaintiff found that the 1st and 2nd Defendants carried out and/or participated in a fraudulent scheme whereby the 1st and 2nd Defendants (encl 4, paras 8-10):
(i) procured the registration of individuals which are the 3rd, 4th, 5th, 6th, 7th, 8th, 9th, 10th and 11th Defendants ("the 3rd to 11th Defendants", referred by the plaintiff as "the Ghost Employees") as non-genuine employees of the plaintiff;
(ii) falsified and/or caused to be falsified attendance records through the plaintiff's payroll system;
(iii) caused or facilitated the payment of monthly salaries and related sums into personal bank accounts held by the 3rd to 11th Defendants;
[5] On 30 July 2025, the plaintiff interviewed the 1st Defendant and the 2nd Defendant separately where the 1st Defendant denied performing or instructing certain "face-in" and "face-out" actions using the Zebra or Honeywell digital devices and did not admit that the Ghost Employees were fictitious and was not questioned on the receipts of the monthly salary payments (encl 4, para 10(a)), whereas the 2nd Defendant admitted to assisting the 1st Defendant with the "face-in" and "face-out" actions using Zebra or Honeywell digital devices but denied having received any money (encl 4, para 10(b)).
[6] The plaintiff alleged that the fraudulent payroll scheme was orchestrated by the 1st and 2nd Defendants and was conspired with the 3rd to 11th Defendants to defraud the plaintiff.
[7] The plaintiff issued show cause letters dated 30 July 2025 to the 1st and 2nd Defendants seeking for their explanation and to revert within five (5) working days. The 2nd Defendant on 31 July 2025 tendered his resignation letter and the 1st Defendant on 4 August 2025 tendered his resignation letter, both with immediate effect (encl 4, para 12).
[8] The plaintiff alleged that the 1st Defendant failed to return a company- issued mobile phone (encl 4, para 13).
[9] On 9 December 2025, an ex-parte order for Mareva Injunction by the plaintiff against the 1st and 2nd Defendants was allowed, followed by an ad interim order on 23 December 2
