BANK BUMIPUTRA MALAYSIA BHD & ANOR V

LORRAIN OSMAN & ORS

[1985] 2 MLJ 236

FACTS & COURT DECISION

The first plaintiff is
a company
incorporated in
Malaysia.
The second plaintiff
is subsidiary of the
first plaintiff.

The Defendant,
Lorrain Osman was
the Director of the
first plaintiff
company and the
Chairman of Board
of Directors of the
second plaintiff.

 The plaintiffs brought an action against

the defendant on the allegation that the
defendant had breach his fiduciary duty
against the company and had made
secret profits and to return the monies to
the company.
The plaintiffs also make an application of
Mareva
injunction
to
restrain
the
defendant from transferring the assets out
of jurisdiction, and to disclose the value,
nature and whereabouts of his assets.

LEGAL ISSUES
Whether the Mareva Injunction Order
should be granted .

GROUNDS OF JUDGMENT
The court in this case considered
three requirements in respect of
granting Mareva Injunction.
First, the plaintiffs must show that they
have good arguable case;
second, the plaintiffs must produce
evidence that the defendant has assets
within jurisdiction and
Third, there is a risk of the assets being
removed before the judgment is
satisfied.

WHETHER THE PLAINTIFFS HAVE A

GOOD ARGUABLE CASE AGAINST THE
DEFENDANT
The plaintiffs contended that Lorrain
had embarked on a deliberate course
of conduct, which had put his
personal interests as a beneficiary of
the personal loan and this was in
direct conflict with his pre-existing
and continuing duty as a director of
the Bank and Chairman of BMF.

WHETHER THE ASSETS OF THE

DEFENDANT WITHIN THE JURISDICTION
The court only concerned with the
defendant assets in the companies.
The plaintiffs submitted that the defendant
had substantial amount of assets in those
companies
which
were
also
the
interveners and urged to lift the corporate
veil of these said companies as the
defendant was the alter ego of these
companies.
The companies which were affected by the
Mareva Injunction were fully controlled by

WHETHER THERES RISK OF THE

ASSETS BEING REMOVED BEFORE THE
JUDGMENT IS SATISFIED.
The court agreed with the test applied in the case of
Third Chandris as to whether there is such risk
that the assets will be removed before the
judgment.
In Pacific Centres case, it would be sufficient if the
plaintiff to merely show a risk of disposal of assets
which have the effect of frustrating the plaintiff in his
attempts to recover the fruits of judgment he is likely
to obtain against the defendant.
The defendant did not keep all his assets in Malaysia
and thus from his conduct he can transfer his assets
from one country to another.

 Furthermore, there is evidence that the

defendant are planning to sell or dispose
his shares and securities.
There is sufficient evidence before the
court to conclude that there is risk that the
defendant assets would be disposed off
thus frustrating or nullifying any judgment
that the plaintiffs may obtain against him.

 The court held that in favor of the

plaintiffs and granted Mareva
Injunction Order against the assets of
Lorrain Osman and the companies
which the defendant was the alter
ego