Croatia
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 Croatian Enforcement Act provides domestic freezing orders with effect that the respondent is prohibited from dealing with the assets referred to in the order until a specified time (for example, a further hearing, judgment or payment) or further order of the Court.
Whether it is possible to enforce it within EU member states depends on the laws of the relevant jurisdiction.
In addition, a freezing order may not be ordered or carried out on a foreign state’s property in Croatia without the prior consent of the judicial affairs minister and with the prior opinion of the foreign affairs minister unless the foreign state has agreed to the freezing order.
2. Are other interim orders commonly made in conjunction with a freezing (or equivalent) order?
Yes, the Court can order various other interim orders in conjunction with a freezing order (for example, various prohibitions such as restrictions on using a product, a trade secret, etc). Asset disclosure orders are not typically obtained.
3. Briefly what is the relevant legal test?
The applicant has to demonstrate that:
(i) there is a claim; and
(ii) that without the civil freezing order, there is a risk of unjustified dissipation or that the realization of the claim would be prevented or significantly hindered.
4. Briefly what is the process for obtaining a freezing (or equivalent) order?
The applicant will make an application to the Court. The application has to specify:
(i) the type of interim order;
(ii) the duration of the order; and
(iii) the facts and proofs on which the claim is based.
An application can be made on or without notice to the respondent.
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?
Yes, the applicant will have to compensate the respondent for losses and damages caused by an unfounded or/and unjustified freezing order. This obligation applies by the force of the law. The Court can also order the applicant to provide a security deposit.
6. Can it be sought against third parties?
Yes, but against such third parties new litigation proceedings will have to be initiated for justification of the freezing order. The freezing order binds third parties from the moment of serving of the freezing order to the third party.
7. What assets are covered by a freezing (or equivalent) order?
Any tangible or intangible assets provided they are not perishable within the jurisdiction.
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?
At any stage, including prior to commencing the claim (although the Court will expect the applicant to issue its claim promptly), during the proceedings or following judgment to assist with enforcement.
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. However, please note that some assets are excluded from the freezing order. For example, if the freezing order is ordered on the salary of the respondent, the amount equal to two-thirds of the average salary in Croatia is excluded from the freezing order. These exclusions are listed in a statute.
12. What happens after a freezing (or equivalent) order is granted?
The applicant will typically notify third parties (such as banks) of the freezing order who may hold the respondent’s assets, or in the case of assets entered in a register, the Court will deliver a freezing order to that register and order the registration of the freezing order. The respondent may issue an appeal against a freezing order.
13. Who pays the costs of the application for a freezing (or equivalent) order?
Either the applicant or the respondent may be ordered to pay for the costs of obtaining the freezing order, which is usually decided in the Court decision on the freezing order.
14. What protections are there typically in a freezing (or equivalent) order for third parties to such orders?
A third party is not prevented from exercising any rights of set-off arising prior to its notification of the freezing order. Furthermore, a third party who in good faith did not know about the freezing order cannot suffer any negative consequences from taking actions contrary to this freezing order. The third parties shall not be liable for letting out funds permitted by the freezing order. Reimbursement of costs or compensation rights may also be sought.
15. What are the consequences of breach of a freezing (or equivalent) order?
A respondent who disobeys a freezing order may be fined and/or be responsible for damages.
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.
17. Can a freezing (or equivalent) order be enforced abroad?
Typically, a freezing order is requested only in respect to domestic assets. However, it is possible to enforce it within EU member states, subject to the laws of the relevant jurisdiction.
18. Can freezing (or equivalent) orders from overseas jurisdictions be enforced in this jurisdiction?
Yes, if they were issued within the EU and comply with the requirements of an EU enforcement order. If they were issued outside EU jurisdiction, permission of the Court shall be given in accordance with local enforcement law.
Contact
Boris Šavorić Senior Partner Šavorić & Partners Zagreb, Croatia boris.savoric@savoric.com www.savoricandpartners.com
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