Belgium
1. Are freezing orders (or their equivalent referred to below) available in civil legal proceedings in this jurisdiction and what is their effect?
Yes. The respondent is prohibited from disposing of the assets referred to in the freezing order until:
(i) a specified time;
(ii) a judgment from the Court annulling or lifting the freezing order;
(iii) a judgment on the merits of the case (when the assets subject to the freezing order are used to enforce the judgment); or
(iv) a judgment on the merits denying the claim of the applicant.
2. Are other interim orders commonly made in conjunction with a freezing (or equivalent) order?
No.
3. Briefly what is the relevant legal test?
To obtain a freezing order, there must be a real risk of dissipation or the respondent’s solvency is at risk. There must also be a prima facie claim, the amount of which is quantifiable.
A freezing order must usually be granted by the judge of attachments (a specialist enforcement judge in the Belgian system).
4. Briefly what is the process for obtaining a freezing (or equivalent) order?
The applicant makes an application to the judge of attachments, setting out the reasons for the application and the basis on which the relevant test is met. The application is made without notice to the respondent. The judge of attachments must issue their decision within eight days.
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?
No. However, if the freezing order causes damage to the respondent, the respondent can issue proceedings to seek annulment of the freezing order and compensation.
6. Can it be sought against third parties?
Yes, a freezing order can be sought against third parties, for example, if certain real assets of the respondent are located at the address of a third party, who is not a creditor or a debtor of the respondent, a freezing order can prohibit the third party from assisting in selling these goods. However, such a freezing order against a third party requires authorization by the judge of attachments.
If the respondent is a creditor of a third party (for example, an employer who has to pay wages to the respondent or a bank where the respondent has an account), the freezing order can be notified and enforced against the third party, who is prohibited from performing any acts of disposition (for example, paying the wages to the respondent), without first obtaining permission from the judge of attachments.
7. What assets are covered by a freezing (or equivalent) order?
Any tangible or intangible assets in principle within the jurisdiction of Belgium. There are certain assets that cannot be seized, for example, assets that are essential to continue studies and/or professional activities, or that can only be seized up to a certain amount (for example, wages cannot be fully seized).
8. Can a freezing (or equivalent) order be made in support of substantive proceedings abroad?
Yes.
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 is usually sought in separate proceedings often before initiating proceedings on the main claim (although the judge of attachments will expect the applicant to issue its claim promptly). However, it can be sought at any stage, including following a judgment on the merits while awaiting enforcement of the judgment.
11. Are there typically any exceptions to the general prohibition on the respondent’s use of assets subject to a freezing (or equivalent) order?
There is no general prohibition on the respondent’s use of real assets, there is only a prohibition on disposing of these assets. For receivables, such as a bank account, the order can provide that the respondent may perform acts of disposition of their assets to a certain limit:
(i) above a specified value;
(ii) in the ordinary and proper course of business; and
(iii) for ordinary living expenses.
12. What happens after a freezing (or equivalent) order is granted?
The applicant must arrange for a bailiff to serve the freezing order on the respondent. They cannot perform any acts of disposition from the date on which the freezing order was served. Assuming the original order was obtained without notice (as is often the case), the respondent may choose to initiate proceedings before the judge of attachments in order to challenge the order. At this point the original order will usually either be annulled or replaced with a Court-sanctioned undertaking which has broadly the same effect as a freezing order until trial. Typically the applicant will also notify third parties via the bailiff of the freezing order when they might hold the respondent’s assets.
The bailiff will also serve the freezing order on third parties who are debtors of the respondent. These third parties must draft a statement within 15 days, informing the claimant of the amounts due to the respondent, the cause of these debts and the date the debts accrued.
13. Who pays the costs of the application for a freezing (or equivalent) order?
The Court will decide at the final determination of the underlying claim whether the applicant or the respondent should pay for the costs of obtaining the freezing order and/or the bailiff costs.
14. What protections are there typically in a freezing (or equivalent) order for third parties to such orders?
(i) A third party is not prevented from exercising any rights of set-off arising prior to its notification of the freezing order.
(ii) A third party does not need to enquire as to the application of any money withdrawn by the respondent if the withdrawal appears to be permitted by the freezing order.
(iii) All rights of third parties remain as they were, with the exception of the prohibition on performing acts of disposition.
(iv) Applicants undertake to pay the cost of the statement to be made by the third party-debtors regarding the goods/funds in their possession.
(v) A freezing order does not give priority over other creditors in case of enforcement.
15. What are the consequences of breach of a freezing (or equivalent) order?
A respondent who breaches a freezing order can be held criminally liable. An individual who is subject to a freezing order and who deceitfully destroys and/or hides the relevant goods, may face a prison sentence of eight days to two years and/or a fine. This also applies to any person who knowingly aides the respondent in this regard.
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)?
Yes. A third party (for example, a bank or an employer) that fails to provide the bailiff of the creditor with a statement detailing the goods/funds in their possession within the statutory period, may be summoned before the judge of attachments and declared partly or wholly liable for the causes and costs of the attachment, and be made a co-debtor for the underlying claim.
17. Can a freezing (or equivalent) order be enforced abroad?
Yes, in principle, although this is subject to the laws of the relevant jurisdiction. In another EU Member State, enforcement is possible without the intervention of the local Court (via the competent enforcement authority appointed in the relevant Member State) provided that the Court that has issued the freezing order has jurisdiction as to the substance of the matter. However in all other cases, this can only be sought with the permission of the local Court and enforcement itself will be a matter of local law.
18. Can freezing (or equivalent) orders from overseas jurisdictions be enforced in this jurisdiction?
Yes, in principle. If the Court that has issued the freezing order is situated in another EU Member State and has jurisdiction as to the substance of the matter, the freezing order can be enforced without any intervention of the local Belgian Court. However in all other cases, this can only be sought with the permission of the local Belgian Court and enforcement itself will be a matter of Belgian law.
Contacts
Gaetano Jannone Partner Eversheds Sutherland Diegem, Belgium gaetanojannone@eversheds-sutherland.com www.eversheds-sutherland.com Jozef Nijns Principal Associate Eversheds Sutherland Diegem, Belgium jozefnijns@eversheds-sutherland.com www.eversheds-sutherland.com
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