Bangladesh
1. Are freezing orders (or their equivalent referred to below) available in civil legal proceedings in this jurisdiction and what is their effect?
Yes, all types of assets (within the jurisdiction) can be subject to freezing orders (known as property attachment orders) either on an interim basis or to assist with enforcement. The effect is that the respondent is prohibited from dealing with the assets referred to in the order, until a specified time (such as a further hearing, judgment, or payment) or further order of the Court.
2. Are other interim orders commonly made in conjunction with a freezing (or equivalent) order?
If it is considered necessary, depending on the circumstances of the case, the Court may make additional interim orders in conjunction with the freezing order. For example, in cases where an order of attachment is issued for a property, which is under-valued in comparison to the claim amount, an additional order of disclosure (through affidavit) may be issued.
3. Briefly what is the relevant legal test?
An applicant must produce sufficient evidence to show the Court that the respondent has mala fide or dishonest intentions to dispose of the relevant assets or remove them from the jurisdiction of the concerned Court. Additionally, the Court must be satisfied that the respondent intends to obstruct or delay civil procedure through the disposal or removal of the relevant assets.
4. Briefly what is the process for obtaining a freezing (or equivalent) order?
Applications for a freezing order must be made on notice so that the respondent is always afforded the opportunity to respond. The applicant must satisfy the Court that the respondent is about to dispose of the whole or any part of the property in question, or otherwise remove it from the Court’s jurisdiction. The applicant must also show that the respondent intends to cause obstruction or delay in the execution of any order that may be made against it. If the application is successful, the Court may direct the respondent to evidence why the property should not be restricted, or to provide security in the sum specified and within the time determined by the order.
5. Does the applicant have to provide any form of security or commit to compensation if its claim is ultimately unsuccessful and any freezing (or equivalent) order granted causes loss and damage to the respondent?
The applicant does not need to provide any form of security when making its application for a freezing order. The applicant will also not be liable to the respondent for any damage resulting from the freezing order, if the underlying substantive claim is ultimately unsuccessful.
6. Can it be sought against third parties?
No, but third parties who are notified of the freezing order will be bound by its terms.
7. What assets are covered by a freezing (or equivalent) order?
Moveable or immovable assets (including intangible assets) within the jurisdiction may fall within the scope of a freezing order. However, certain assets are exempt from the scope of any freezing order, including: clothing and bedding; tools and agricultural assets used by the respondent in the course of its employment; pension payments, wages and salaries in some circumstances.
8. Can a freezing (or equivalent) order be made in support of substantive proceedings abroad?
No.
9. Can a freezing (or equivalent) order be made in support of arbitration proceedings or awards?
Yes.
10. At what stage of proceedings can a freezing (or equivalent) order be sought?
A freezing order can be sought from the Court at any stage of civil proceedings but not before the underlying proceedings have been commenced.
11. Are there typically any exceptions to the general prohibition on the respondent’s use of assets subject to a freezing (or equivalent) order?
No, but the Court has discretion in that regard. Generally, if any property is attached, the respondents are not allowed to transfer the same, but are allowed to continue to enjoy the property as they were. However, if the Court thinks it fit and reasonable, it may appoint a receiver to collect the regular income generated from the property until disposal of the matter. If attached properties are perishable goods, then the Court may also direct a sale of the goods by public auction and retain the proceeds in custody of the receiver.
12. What happens after a freezing (or equivalent) order is granted?
After the freezing order has been issued, the respondent is restricted from dealing with the attached property until the formal disposal of the civil proceedings or the freezing order is vacated by the Court. However, the respondent has the ability to appeal an order. Third parties who hold the respondent’s assets will be notified of the freezing order.
13. Who pays the costs of the application for a freezing (or equivalent) order?
The applicant is responsible for the cost of the application including Court fees.
14. What protections are there typically in a freezing (or equivalent) order for third parties to such orders?
There are no automatic protections for third parties.
15. What are the consequences of breach of a freezing (or equivalent) order?
The Court may award compensation or impose penalties for violating the conditions of a freezing order. The levels of compensation vary on a case-by-case basis. Relevant penalties include fines and other types of restraining orders. Third parties who are on notice of the freezing order, such as banks holding frozen funds, will be subject to penalties in the event that they are responsible for a breach of a freezing order.
16. Does a third party notified of (but not a party to) a freezing (or equivalent) order owe a duty of care to the applicant (meaning it can be liable to the applicant for non-compliance)?
No. The third party cannot be held liable to the applicant for non-compliance. Third parties knowingly in breach can be subject to penalties imposed by the Court but they cannot be ordered to pay compensation to the applicant.
17. Can a freezing (or equivalent) order be enforced abroad?
There are no provisions under the Civil Procedure Code that allow freezing orders to be enforced abroad.
18. Can freezing (or equivalent) orders from overseas jurisdictions be enforced in this jurisdiction?
Freezing orders from overseas jurisdictions cannot be enforced in Bangladesh.
Contact
Shahwar Nizam Partner DFDL Dhaka, Bangladesh Shahwar.nizam@dfdl.com www.dfdl.com/teams/members/shahwar-nizam/84/
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