Court grants worldwide Mareva injunction in Novo Nordisk case

Background

The Singapore International Commercial Court recently ruled in favour of Novo Nordisk A/S, granting a worldwide Mareva injunction against KBP Biosciences Pte Ltd and Dr Huang Zhenhua. This injunction was sought in support of an impending arbitration in New York, where Novo Nordisk alleged that it was misled into acquiring a drug under false pretences.

The Application

Novo Nordisk, a global healthcare company, applied for the injunction under the Singapore International Commercial Court Rules, seeking to freeze assets worldwide to secure potential arbitration awards. The application was supported by evidence from Novo's Corporate Project Vice President, Peter Billeskov Schelde, who was directly involved in the acquisition of the drug in question.

Legal Basis

The court's decision was grounded in the International Arbitration Act 1994, which empowers the court to issue orders in support of arbitration proceedings. The court assessed whether there was a good arguable case and a real risk of asset dissipation that could frustrate enforcement of any arbitral award.

Arguments and Evidence

Novo Nordisk argued that KBP and Dr Huang had failed to disclose critical information about the drug's efficacy, which was pivotal to the acquisition decision. The court found a good arguable case for fraud under New York law, supported by evidence of misrepresentation and asset transfers that suggested a risk of dissipation.

Risk of Dissipation

The court was persuaded by Novo's evidence of significant asset transfers and dividend declarations by KBP, which lacked a clear commercial rationale. This supported Novo's claim that these actions were intended to place assets beyond reach in anticipation of legal claims.

Jurisdictional Considerations

Despite the arbitration being seated in New York, the court found sufficient connections to Singapore, including significant assets held in Singapore by the defendants, justifying the injunction. The court also noted that New York law does not permit worldwide Mareva injunctions, further supporting the need for the Singapore court's intervention.

Urgency and Ex Parte Nature

The court recognised the urgency and the gap in protections due to the lack of an arbitral tribunal at the time, which justified the ex parte application. The court included provisions for the defendants to apply to vary or discharge the order.

Conclusion

The court granted the worldwide freezing order, with ancillary orders for asset disclosure. This decision underscores the court's willingness to support international arbitration processes by preventing asset dissipation that could undermine arbitral awards.

Learn More

For more information on international arbitration and related legal frameworks, see BeCivil's guide to International Arbitration Law.