In lawsuits or execution proceedings where the subject matter is money or security, the creditor may request an interim attachment from the court to secure the claim before a final judgement is rendered by the court. Interim attachments may be requested from the court as a precautionary measure to prevent the debtor from transferring or otherwise disposing of movable or immovable properties with the purpose of securing the collection of the debt.
Interim attached must be requested in accordance with the conditions and procedures specified in the Executive and Bankruptcy Law No. 2004 ("EBL").
Request of an Interim Attachment
An interim attachment may be requested before the initiation of the principal lawsuit, together with the initiation of the principal lawsuit or during the principal lawsuit. After the initiation of the principal lawsuit, an interim attachment may only be requested from the court hearing such lawsuit.
Interim attachments can only be requested from a competent court which has territorial jurisdiction. For example, an interim attachment on commercial receivables must be requested from the commercial court of first instance that has territorial jurisdiction. The competent court and territorial jurisdiction should be determined according to the Code of Civil Procedure. In the event there is a territorial jurisdiction clause in a written agreement or a separate territorial jurisdiction agreement between the parties to the dispute, an interim attachment must be requested from the court indicated in such document.
Conditions for an Interim Attachment
Conditions for an interim attachment have been specified in the article 257 of the EBL. These conditions have been examined separately depending on whether the receivable has become due or not.
Conditions for an Interim Attachment on Due Receivables
It is sufficient for a receivable to be due and not secured through a pledge for creditor to request and interim attachment. An interim attachment may also be requested for the portion of the receivable which a pledge does not sufficiently cover.
Although the letter of the law suggest that an interim attachment may be requested for any due monetary receivable, court precedent indicates that assessments will differ on a case by case basis, especially those relating to promissory notes, invoices or receivables arising from the current accounts.
Conditions for an Interim Attachment on Undue Receivables
In principle, an interim attachment cannot be requested for undue receivables. However, under specific circumstances specified in the law, it is also possible to request an interim attachment for undue receivables. If the debtor does not have a specific registered address, is preparing to or has fled in order to evade the fulfilment of his obligations, an interim attachment may be requested for undue receivables.
Security for an Interim Attachment
There is a requirement for the creditor requesting an interim attachment to deposit security to cover the potential damages incurred by the debtor resulting from the implementation of an interim measure within the scope of a claim which has ultimately not been accepted by the court. In practice, the amount of security is usually determined at fifteen percent of the receivable, in some cases the court may determine higher percentages. Security is commonly provided to the court in the form of bank grantee. The court has discretion in determining the amount and type of security.
The court may decide not to take a security if the request is based on a court decision, an official documentation or other reasons which justify a security not being requested. Additionally, some individuals and entities may be exempt from depositing security in accordance with specific legislation.
Execution of an Interim Attachment
Decision regarding an interim attachment rendered by the court must be executed within the jurisdiction of the ruling court. The creditor initiate the execution of the interim attachment within ten days from the date of the decision at the authorised enforcement office. Otherwise, the decision regarding an interim attachment shall be cancelled ipso facto.
Effect of an Interim Attachment
In accordance with the scope of the interim attachment, the execution of the interim attachment may result in the attachment of debtor's movable and immovable properties, receivables from third parties, deposits in banks and other rights and receivables.
The enforcement of the interim measure may facilitate blocking of bank deposits and depositing of the creditors receivables from third parties to the enforcement office. Movable properties may be seized and delivered to trustees for storage. An interim attachment may also be registered on immovable property registries and may also be enforced against consecutive owners of the property.
Appeal against an Interim Attachment Decision
The court may consider the request for an interim attachment in the absence of the debtor. The debtor may object to this decision before the first instance court in the event the decision has been rendered in its absence. Consequently, the debtor may challenge the decision for an interim attachment before the Regional Court of Appeal. In the event the request for an interim attachment is denied, the creditor may also challenge this decision before the Regional Court of Appeal. The decisions rendered by the Regional Court of Appeal shall be deemed final and cannot be submitted for an appeal examination to the Court of Cassation.
Claim for Damages Resulting from an Unjustified Interim Attachment
The debtor and third parties may claim for damages resulting from an unjustified interim attachment enforced by a creditor. If a compensation is decided to be paid within this claim for damages, this compensation shall primarily satisfied from the security deposited for the interim attachment. If the damage incurred by an interim attachment exceeds the amount of the security, the execution proceedings shall be initiated for the collection of the remaining compensation to cover damages.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.