Ireland
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 (which may be domestic or worldwide) until a specified time (for example, 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?
Yes. The Court typically also requires the respondent to provide disclosure in an affidavit of the nature, value and location of his, her or its assets.
3. Briefly what is the relevant legal test?
The applicant must show that:
(i) there is a good arguable case in the underlying claim or prospective claim; and
(ii) there is real risk of the respondent disposing of or dissipating their assets for the purpose of preventing the applicant from recovering damages, and not merely for the purpose of carrying on a business or discharging lawful debts.
In making the application the applicant should:
(i) make full and frank disclosure of all matters in their knowledge which are material for the judge to know;
(ii) give particulars of their claim against the relevant party, stating the grounds of their claim, the amount and fairly stating the points made against it by the other party;
(iii) give grounds for believing that the respondent has assets within the jurisdiction (the existence of a bank account may be sufficient); and
(iv) give grounds for believing that there is a risk of the assets being removed or dissipated.
4. Briefly what is the process for obtaining a freezing (or equivalent) order?
The applicant makes an application by way of motion to the Court, in particular setting out in an affidavit the reasons for the application and the basis on which the relevant test is met (as set out in response to question 3 above). An application can be made on or without notice to the respondent. Where it is made without notice, the applicant has a duty of full and frank disclosure and there will be a later return hearing at which the respondent can challenge the order, assuming it is made.
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 should provide a cross-undertaking in damages to the respondent (which can in certain circumstances be ordered to be backed by security).
6. Can it be sought against third parties?
Yes, a third party to the underlying proceedings or prospective proceedings may be made a party to a freezing order. Equally a third party which is not a party to the freezing order (for example, a financial institution holding the respondent’s assets) which is notified of the freezing order is required to ensure that it does not knowingly assist the respondent in breaching the terms of the freezing order.
7. What assets are covered by a freezing (or equivalent) order?
Any tangible or intangible assets provided they are not perishable, whether within the jurisdiction (a domestic freezing order) or outside (a worldwide freezing order). The assets must be capable of being frozen, for example bank accounts, crypto wallets, proceeds of insurance policy and property, whether within or outside 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?
The underlying proceedings must have been commenced or must be commenced at the same time as the application for the freezing order. In exceptional circumstances, for instance if it is not possible to commence proceedings due to Court office closures, an undertaking to commence proceedings may be acceptable. An injunction can be granted after judgment if there is a risk that the debtor’s assets will be removed or dissipated in order to avoid the consequences 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?
Yes. The order will generally provide that the respondent may deal with their assets:
(i) above a specified value;
(ii) in the ordinary and proper course of business; or
(iii) for ordinary living expenses. These exceptions include day-to-day living expenses and legal costs, which may be excepted provided they arise within the ordinary course of business.
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 when they might hold the respondent’s assets. The decision to grant a freezing order may be appealed to a higher Court, that is from the Circuit Court to the High Court, or from the High Court to the Supreme Court. Alternatively, the affected person may apply to have the freezing order varied or discharged.
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 at the final determination of the underlying litigation.
14. What protections are there typically in a freezing (or equivalent) order for third parties to such orders?
(i) If the granting of a freezing order proves to be unjust or inconvenient to third parties they may apply to have the order discharged.
(ii) As regards assets outside of the jurisdiction, a freezing order does not prevent a third party from complying with (a) what it reasonably believes to be its obligations under the law of the country where the assets are located or the law of any contract between itself and the respondent or (b) any orders of the Courts of the country where the assets are located.
(iii) Applicants undertake to pay the reasonable costs of any third party which have been incurred as a result of the order, and to compensate them for any loss caused by it.
(iv) Third parties, such as banks, may still exercise their pre-existing contractual rights of set-off or enforce any pre-existing security. A bank cannot, however, obtain any new rights or security over the assets once the freezing order has been granted.
(v) 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.
15. What are the consequences of breach of a freezing (or equivalent) order?
A respondent who knowingly disobeys a freezing order may be held in contempt of Court and may be imprisoned or fined. A third party may only be in contempt of Court where they knowingly help or permit the respondent to breach the terms of the 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.
17. Can a freezing (or equivalent) order be enforced abroad?
Yes, in principle, although subject to the laws of the relevant jurisdiction. However, this can only be sought with the permission of the 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?
In some circumstances, yes, pursuant to the Brussels and Lugano Conventions and Council Regulation (EC) 44/2001.
Contact
Pamela O’Neill Partner, Head of Dispute Resolution & Litigation Eversheds Sutherland Dublin, Ireland pamelaoneill@eversheds-sutherland.ie www.eversheds-sutherland.com Aonghus McClafferty Senior Associate Eversheds Sutherland Dublin, Ireland aonghusmcclafferty@eversheds-sutherland.ie www.eversheds-sutherland.com
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