France
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 dealing with the assets referred to in the freezing order.
2. Are other interim orders commonly made in conjunction with a freezing (or equivalent) order?
No. On the basis of a French equivalent of a freezing order, the applicant can instruct the bailiff to carry out a search on the national bank accounts (“fichier national des comptes bancaires et assimilés” or “FICOBA”).
3. Briefly what is the relevant legal test?
(i) The existence of the debt appears to be well-founded; and
(ii) circumstances are likely to threaten the recovery of the debt.
4. Briefly what is the process for obtaining a freezing (or equivalent) order?
The applicant makes an ex parte application to the juge de l’exécution or to the President of the Commercial Court, setting out the reasons for the application and the basis on which the relevant test is met. It is also appropriate for the applicant to identify the amount of the sums for which the order is requested, the assets to which the request relates, and to submit a draft freezing order with their application. An application is in principle made without notice to the respondent. Assuming an order is made, the Court may still vary or discharge the order after an adversarial hearing.
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.
6. Can it be sought against third parties?
An order may relate to assets held by a third party but legally owned by the respondent. In such a case, the applicant must serve the freezing order upon the third party, who is required by law to declare the respondent’s assets they hold and the existence of any previous order relating to these assets.
7. What assets are covered by a freezing (or equivalent) order?
Any tangible or intangible movable property belonging to the debtor. Assets belonging to foreign states may also be covered by an order but is subject to special protection.
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 court proceedings. Once an arbitral award or a foreign judgment is entered, the applicant no longer needs a freezing order from the Court and can directly request freezing of the debtor’s assets by a bailiff. In case of challenge, the judgment or award creditor will have to show that the recovery of the claim under the judgment or award was at risk.
11. Are there typically any exceptions to the general prohibition on the respondent’s use of assets subject to a freezing (or equivalent) order?
Yes. For instance, a minimum lump sum considered necessary for life and work shall be left at the disposal of the respondent for daily life expenses.
12. What happens after a freezing (or equivalent) order is granted?
The applicant will instruct a bailiff who will proceed with the service of a deed of conservatory attachment upon the debtor. This conservatory attachment must be taken within three months of the order being granted, failing which the freezing order will be void. If the seizure was made in the hand of a third party, the deed of attachment will be served upon the third party, and must then be notified to the debtor within 8 days. The freezing order holder must initiate or pursue proceedings on the merits within one month of the order being granted.
13. Who pays the costs of the application for a freezing (or equivalent) order?
The applicant. In principle, the costs of the attachment will be added to the debtor’s debt.
14. What protections are there typically in a freezing (or equivalent) order for third parties to such orders?
Assets held by third parties for the respondent’s benefit but which are not legally owned by the respondent cannot be covered by an order. Third parties may therefore request the Court to vary or discharge an order by claiming title to the assets.
15. What are the consequences of breach of a freezing (or equivalent) order?
A respondent or third party in breach of a freezing order may be held financially liable. Criminal sanctions may also be imposed, including imprisonment and a fine.
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 notified of a freezing order must declare the respondent’s assets they hold and the existence of any previous order relating to these assets. The third party may be held liable for failure to declare, negligence, inaccurate declaration or false declaration.
17. Can a freezing (or equivalent) order be enforced abroad?
No, in principle.
18. Can freezing (or equivalent) orders from overseas jurisdictions be enforced in this jurisdiction?
In principle yes if it complies with the applicable requirements for recognition of foreign judgements in France.
Contacts
Rémi Kleiman Partner Eversheds Sutherland Paris, France remikleiman@eversheds-sutherland.com www.eversheds-sutherland.com Sarah Monnerville Smith Partner Eversheds Sutherland Paris, France sarahmonnervillesmith@eversheds-sutherland.com www.eversheds-sutherland.com
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