PARASTATE LABS, INC. v WANG LI & 3 Ors

"Having regard to Parastate’s unsatisfactory evidence as to its ability to meet its undertaking as to damages, the Mareva injunction I granted was for a lower quantum than what Parastate had applied for." — Per Andre Maniam J, Para 47

Case Information

• Citation: [2023] SGHC 153 (Para 0)
• Court: In the General Division of the High Court of the Republic of Singapore (Para 0)
• Date of hearing: 14 July 2022 and 28 November 2022; date of decision: 26 May 2023 (Para 0)
• Coram: Andre Maniam J (Para 0)
• Case number: Originating Claim No 130 of 2022 (Summons No 2564 of 2022) (Para 0)
• Area of law: Civil Procedure — Mareva injunctions — quantum of Mareva injunction (Para 0)
• Counsel for the claimant: Foo Maw Shen, Chu Hua Yi and Mark Tan (FC Legal Asia LLC) (Para 0)
• Counsel for the first defendant: Choo Zheng Xi and Carol Yuen (Remy Choo Chambers LLC) (Para 0)
• Counsel for the second defendant: Darius Chan and Michael Chan (Breakpoint LLC) (Para 0)
• Counsel for the third and fourth defendants: Ang Ann Liang and Yeoh Tze Ning (Allen & Gledhill LLP) (Para 0)

Summary

Parastate Labs, Inc. sought a worldwide Mareva injunction in the sum of US$5 million, but the court granted relief only in the reduced quantum of US$2.5 million against the first defendant, Mr Wang. The central reason for the reduction was the court’s concern that Parastate had produced unsatisfactory evidence of its ability to meet its undertaking as to damages, which is a critical feature of freezing relief. The court also treated Parastate’s non-disclosure and procedural non-compliance as material to the exercise of discretion. (Para 1) (Para 39) (Para 47)

The dispute arose out of Parastate’s investment in the Babel Quant Alpha USDT Fund, which was managed by Babel Finance. Parastate entered into a management agreement with Babel Asia and invested US$5 million in USDT. In the Mareva application, Parastate initially sought relief against both Mr Wang and Mr Yang, but by the time of the hearing it had decided to proceed only against Mr Wang. The court nevertheless scrutinised the application closely because it was made without notice and therefore required full and frank disclosure. (Para 4) (Para 7) (Para 10) (Para 26)

The judgment is significant because it confirms that even where the substantive threshold for Mareva relief is met, the court retains a discretion to calibrate the order to what is just or convenient. Andre Maniam J held that the applicant’s evidence on its undertaking mattered, and that the likely effect of an injunction on the defendant had to be balanced against the applicant’s shortcomings. The result was a lower quantum, together with a requirement that Parastate fortify its undertaking by paying S$50,000 into court. (Para 43) (Para 44) (Para 46) (Para 40)

What were the facts that led Parastate to seek a worldwide Mareva injunction?

Parastate invested in the Babel Quant Alpha USDT Fund, which was managed by a cryptocurrency financial services provider trading as Babel Finance. The judgment records that Parastate and Babel Asia entered into a management agreement, and that Parastate then invested US$5 million into the Fund in the form of USDT cryptocurrency. Those facts formed the commercial background to the freezing application. (Para 4) (Para 7)

"Parastate invested in the Babel Quant Alpha USDT Fund (“the Fund”), which was managed by a cryptocurrency financial services provider trading as “Babel Finance”." — Per Andre Maniam J, Para 4

"Parastate and Babel Asia entered into a management agreement, following which Parastate invested US$5m into the Fund, in the form of the USDT cryptocurrency." — Per Andre Maniam J, Para 7

The application was not static. The court noted that Parastate had originally sought an injunction against Mr Wang and Mr Yang, but by the time of the hearing it had decided to seek relief only against Mr Wang. The order was granted against Mr Wang, but not in the full amount claimed. That procedural narrowing mattered because the court was assessing the application as actually pursued, not as originally contemplated. (Para 10)

"By then, Parastate had decided that it would only seek an injunction against Mr Wang, and not also Mr Yang. I granted the Mareva injunction against Mr Wang, but for a quantum of US$2.5m instead of $5m as sought by Parastate." — Per Andre Maniam J, Para 10

The factual matrix also included the court’s concern that Parastate had not provided the kind of financial material one would ordinarily expect if it wished to persuade the court that it could honour a cross-undertaking in damages. The absence of bank statements, statements of accounts, and other financial records became central to the court’s assessment of the appropriate quantum. (Para 23) (Para 39)

How did the court frame the legal and procedural issues in the Mareva application?

The court’s analysis was structured around the application’s compliance with the Practice Directions, the adequacy of Parastate’s disclosure, and the appropriate quantum of the injunction. The judgment expressly states that these were the grounds of decision, and one of the headings in the reasons was “The appropriate quantum of the injunction.” The court therefore treated the quantum question as a distinct and important issue, not merely a mechanical consequence of entitlement to relief. (Para 3) (Para 40)

"These are my grounds of decision." — Per Andre Maniam J, Para 3

"The appropriate quantum of the injunction" — Per Andre Maniam J, Para 40

At the procedural level, the court focused on the requirements for an ex parte injunction application. Parastate’s application was filed as a summons for injunction without notice, which meant that the applicant had to comply with the disclosure obligations in the Practice Directions. The court emphasised that the affidavit in support had to include, under clearly defined headings, an undertaking to pay losses and a statement of what assets were available to meet that undertaking and to whom those assets belonged. (Para 15)

"Parastate’s application was filed as a summons for injunction without notice, and para 73(1)(f) of the Supreme Court Practice Directions 2021 (“Practice Directions”) required Parastate, as the applicant, to include in the affidavit prepared and filed in support of the application the following information under clearly defined headings: “… (f) An undertaking to pay for losses that may be caused to the opponent or other persons by the granting of the orders sought, stating what assets are available to meet that undertaking and to whom the assets belong”." — Per Andre Maniam J, Para 15

The court also considered the form of the undertaking required by the Practice Directions. Paragraph 72 of the Practice Directions provided that the prescribed forms should be used unless the judge hearing the application considered there was good reason to adopt a different form. This mattered because the court later found that Parastate had deliberately omitted prescribed undertakings 9 and 10. (Para 29) (Para 31)

What did each side argue about Parastate’s ability to meet its undertaking as to damages?

Parastate’s position was that it had sufficient financial strength to meet any undertaking as to damages. Its counsel pointed to funding that had been raised over a period of about 1.5 years, namely US$1.3 million on 27 January 2021, US$5 million on 9 April 2021, and US$5.5 million on 14 July 2021. On that basis, Parastate contended that it was financially sound enough to support the freezing relief it sought. (Para 20)

"He nevertheless believed that Parastate had the ability to meet an undertaking as to damages as it had raised US$11.8m in funding over the past 1.5 years: US$1.3m on 27 January 2021, US$5m on 9 April 2021, and US$5.5m on 14 July 2021." — Per Andre Maniam J, Para 20

The defendants challenged that position by pointing out the absence of real financial evidence. They argued that Parastate had produced no bank statements and no statements of accounts, even though it would have had to provide financial information to third parties in order to secure the funding it claimed to have raised. The defendants’ point was that bare assertions about funding history were not enough to satisfy the court that Parastate could make good on a cross-undertaking if the injunction later proved unjustified. (Para 23)

"Parastate would have had to produce information about its financial position to third parties to secure the US$11.8m in funding, and yet it provided no information to the court other than the dates and amounts of funding raised; Parastate provided no bank statements, or statements of accounts." — Per Andre Maniam J, Para 23

The court accepted that the issue was not whether Parastate had ever raised money, but whether it had provided sufficient evidence to show that it was good for its undertaking. The absence of contemporaneous financial records, especially in the context of a worldwide freezing order, weighed heavily against accepting Parastate’s assurances at face value. (Para 23) (Para 46)

Why did the court treat Parastate’s disclosure failures as material?

The court treated the disclosure failures as material because the application was made without notice. In that setting, the applicant’s duty of candour is especially important. The judgment cites JTrust for the proposition that Mareva relief may be refused where the plaintiff has not come to court with clean hands, including where there has been a failure to make full and frank disclosure in seeking ex parte relief. The court therefore approached Parastate’s omissions as part of the discretionary assessment, not as a mere technicality. (Para 26)

"Mareva relief may be refused in cases where the plaintiff has not come to court with clean hands: JTrust Asia Pte Ltd v Group Lease Holdings Pte Ltd and others [2018] 2 SLR 159 (“JTrust”) at [84]–[92], and that includes cases where there has been a failure to make full and frank disclosure in seeking relief ex parte: JTrust at [84(b)], [89]– [92]." — Per Andre Maniam J, Para 26

The court also found that the omission of prescribed undertakings 9 and 10 was deliberate. That finding was important because it showed that the non-compliance was not accidental or inadvertent. The judgment states in direct terms that the omission was deliberate, and the court later relied on that deliberate omission when deciding how much relief to grant. (Para 31) (Para 39)

"In short, the omission of the prescribed undertakings was deliberate." — Per Andre Maniam J, Para 31

In addition, the court noted that the prescribed undertakings were not merely formalities. The judgment explains that the undertaking not to enforce or seek similar orders abroad without leave serves an important protective function, and that the applicant’s failure to include the prescribed undertakings was therefore relevant to the overall fairness of the application. The court’s treatment of these omissions shows that procedural compliance and substantive fairness were closely linked in the exercise of discretion. (Para 33) (Para 39)

How did the court reason through the omission of prescribed undertakings 9 and 10?

The court examined the prescribed undertakings in the Practice Directions and the reasons they matter in worldwide freezing relief. Paragraph 72 of the Practice Directions provides that the prescribed forms should be used unless the judge considers there is good reason to depart from them. The court then referred to the importance of the undertakings explained in Bouvier, including the undertaking not to enforce the injunction abroad without leave and the undertaking not to seek similar relief elsewhere. (Para 29) (Para 33)

"Paragraph 72 of the Practice Directions states that Forms 24, 25, and 26 of Appendix A (as the case may be) should be used except to the extent that the judge hearing a particular application considers there is a good reason for adopting a different form" — Per Andre Maniam J, Para 29

"the importance of those undertakings was explained by the Court of Appeal in Bouvier, Yves Charles Edgar and another v Accent Delight International Ltd and another and another appeal [2015] 5 SLR 558." — Per Andre Maniam J, Para 33

The judgment quotes the proposition that the undertaking plays a vital role because it protects a defendant from oppression arising from a multiplicity of suits. It also quotes the proposition that courts have gone so far as to say that a worldwide Mareva injunction should not be granted unless the plaintiff gives such an undertaking. Those statements show why the omission of undertakings 9 and 10 was not treated as a minor drafting issue. (Para 33)

"This undertaking plays a vital role because it protects a defendant from the risk of oppression which may arise from a multiplicity of suits: Dadourian Group International Inc v Simms [2006] 1 WLR 2499 at [2] and [24]." — Per Andre Maniam J, Para 33

"Courts have gone so far as to say that a worldwide Mareva injunction should not be granted unless the plaintiff gives such an undertaking: Re Bank of Credit and Commerce International SA [1994] 3 All ER 764 at 794." — Per Andre Maniam J, Para 33

Against that background, the court concluded that the omission was deliberate and material. The practical consequence was not that the injunction had to be refused outright, but that the omission became one of the factors justifying a reduced quantum. The court expressly said that it considered Parastate’s material non-disclosures, both as to its ability to meet its undertaking and as to the omitted undertakings, in deciding the application. (Para 31) (Para 39)

What legal test did the court apply in deciding whether to grant Mareva relief and at what quantum?

The court reiterated that the ultimate question is whether it appears to the court to be just or convenient that the order should be made. That language comes from s 4(10) of the Civil Law Act 1909 (2020 Rev Ed). The court also made clear that the existence of a good arguable case and a real risk of dissipation are necessary but not sufficient requirements. Even if those threshold requirements are met, the court still retains a discretion to refuse relief or to shape it in a way that is just and convenient. (Para 43) (Para 47)

"the ultimate question is still whether “it appears to the court to be just or convenient that such order should be made”: s 4(10), Civil Law Act 1909 (2020 Rev Ed)." — Per Andre Maniam J, Para 43

"A good arguable case, and real risk of dissipation, are necessary but not sufficient requirements for the grant of a Mareva injunction – JTrust at [95]: “where the two requirements have been established, there remains scope for the refusal of relief.” Ultimately, whether to grant a Mareva injunction, and if so, on what terms, depends on what appears to the court to be just or convenient." — Per Andre Maniam J, Para 47

The court then applied that principle to the facts before it. It did not treat the application as an all-or-nothing proposition. Instead, it asked what order would best balance the interests of both parties, including the likely effects of an injunction on the defendant and the quality of the applicant’s evidence on its undertaking. That balancing exercise led the court to grant only half the amount sought. (Para 46) (Para 47)

"In my view, the lower quantum of the injunction struck the right balance between the interests of both parties, considering the likely effects of an injunction on the defendant (JTrust at [97]) and the unsatisfactory evidence from Parastate as to whether it was good for its undertaking." — Per Andre Maniam J, Para 46

Why did the court grant only US$2.5 million instead of the US$5 million sought?

The court’s answer was that the lower quantum was the just and convenient outcome in light of Parastate’s unsatisfactory evidence. The judge expressly said that the just and convenient thing to do was to grant an injunction for half the sum claimed, namely US$2.5 million instead of US$5 million. This was not a random compromise; it was the court’s calibrated response to the evidential deficiencies and the need to protect the defendant from the consequences of an overbroad freezing order. (Para 44) (Para 46)

"I considered that the just and convenient thing to do would be to grant an injunction for half the sum claimed, ie, US$2.5m instead of US$5m." — Per Andre Maniam J, Para 44

The court’s reasoning was expressly tied to the likely effects of the injunction on the defendant and to the applicant’s inability to show convincingly that it could meet its undertaking as to damages. The judge did not say that Parastate had no ability at all; rather, the evidence was unsatisfactory. That distinction matters because it shows the court was not making a punitive order, but a proportionate one. (Para 46) (Para 47)

The court also required Parastate to fortify its undertaking by paying S$50,000 into court. That requirement reinforced the court’s concern about the adequacy of Parastate’s evidence and its willingness to impose conditions to protect the defendant. The order therefore combined a reduced freezing amount with a financial safeguard. (Para 40)

"In granting the injunction, I required that Parastate fortify its undertaking by paying S$50,000 into court." — Per Andre Maniam J, Para 40

How did the court use the authorities on worldwide Mareva injunctions and cross-undertakings?

The court relied on Bouvier and Dadourian to explain why undertakings matter in the context of worldwide freezing relief. The quoted passage from Bouvier emphasises that the undertaking not to enforce abroad without leave protects against oppression and multiplicity of suits. The court used that authority to show that the prescribed undertakings were not optional extras but integral safeguards in a worldwide Mareva regime. (Para 33)

"This undertaking plays a vital role because it protects a defendant from the risk of oppression which may arise from a multiplicity of suits: Dadourian Group International Inc v Simms [2006] 1 WLR 2499 at [2] and [24]." — Per Andre Maniam J, Para 33

The court also referred to Re Bank of Credit and Commerce International SA for the proposition that a worldwide Mareva injunction should not be granted unless the plaintiff gives the relevant undertaking. That authority supported the court’s insistence on compliance with the prescribed undertakings and helped explain why deliberate omission was treated seriously. (Para 33)

Separately, the court referred to Maldives Airport as an example of the relevance of the respondent’s ability to make good on the cross-undertaking. The judgment notes that the Court of Appeal in that case set aside an injunction and mentioned, as the final factor, the respondent’s ability to make good on its cross-undertaking. The present court used that authority to reinforce the point that unsupported claims of creditworthiness are not enough. (Para 41)

"In Maldives Airport Airport Co Ltd and another v GMR Male International Airport Pte Ltd [2013] 2 SLR 449 (“Maldives Airport”), the Court of Appeal set aside an injunction, mentioning as the final factor in that case, the respondent’s ability to make good on its cross-undertaking (at [79]–[80])." — Per Andre Maniam J, Para 41

What was the court’s final disposition of the application?

The court granted a Mareva injunction against Mr Wang, but only in the amount of US$2.5 million. That was half of the amount Parastate had sought. The court also required Parastate to fortify its undertaking by paying S$50,000 into court. The judgment further notes that either party could apply to vary the amount, which preserved flexibility if circumstances changed. (Para 10) (Para 40)

"I granted the Mareva injunction against Mr Wang, but for a quantum of US$2.5m instead of $5m as sought by Parastate." — Per Andre Maniam J, Para 10

"In granting the injunction, I required that Parastate fortify its undertaking by paying S$50,000 into court." — Per Andre Maniam J, Para 40

The disposition reflects a middle path. The court did not reject the application outright, which indicates that the threshold for freezing relief was sufficiently met to justify some protection. But the court also did not accept Parastate’s full claim, because the evidence on its undertaking and its disclosure record did not justify the maximum restraint sought. The result was a tailored order that matched the court’s assessment of justice and convenience. (Para 43) (Para 46) (Para 47)

Why does this case matter for Mareva injunction practice in Singapore?

This case matters because it shows that the quantum of a Mareva injunction is not fixed simply by the amount claimed to be owed. The court may reduce the quantum where the applicant’s evidence on its undertaking as to damages is weak or incomplete. That is a practical warning to applicants: if they want broad freezing relief, they must be prepared to show, with evidence, that they can compensate the defendant if the injunction later turns out to have been wrongly granted. (Para 44) (Para 46) (Para 47)

"A good arguable case, and real risk of dissipation, are necessary but not sufficient requirements for the grant of a Mareva injunction" — Per Andre Maniam J, Para 47

The case also reinforces the importance of ex parte candour and strict compliance with the Practice Directions. The court treated the omission of prescribed undertakings as deliberate, and it relied on that omission when deciding the application. For practitioners, the message is clear: in a without-notice freezing application, procedural shortcuts can affect not just whether relief is granted, but how much relief is granted and on what terms. (Para 15) (Para 31) (Para 39)

Finally, the judgment is useful because it links the doctrinal test for Mareva relief to the practical realities of enforcement and risk allocation. The court balanced the likely effect on the defendant against the applicant’s evidential shortcomings, and it used a fortification order to protect against the risk of loss. That makes the case a useful illustration of how Singapore courts exercise discretion in freezing applications. (Para 40) (Para 46)

Cases Referred To

Legislation Referenced

• Civil Law Act 1909 (2020 Rev Ed), s 4(10) — the statutory basis for the “just or convenient” test for granting the order. (Para 43)
• Supreme Court Practice Directions 2021, para 73(1)(f) — required disclosure of the undertaking and the assets available to meet it. (Para 15)
• Supreme Court Practice Directions 2021, para 72 — provided that the prescribed forms should be used unless the judge considers there is good reason to adopt a different form. (Para 29)

Source Documents

• Original Judgment — Singapore Courts
• Archived Copy (PDF) — Litt Law CDN

This article analyses [2023] SGHC 153 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the full judgment for the Court's complete reasoning.