Laos
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 Court can issue an asset freezing order (in respect of assets within the jurisdiction) to protect the interests of an applicant. The freezing order will prohibit both the respondent and any third party (who has notice of it) from dealing with, destroying or altering the assets in question.
2. Are other interim orders commonly made in conjunction with a freezing (or equivalent) order?
Yes. The Court may impose “other measures” if the relevant assets need to be managed. For example, if they are likely to transform or degrade before final judgment is reached at trial, a Court may issue an order assigning the management rights of the assets to any party, including third parties. The Civil Procedure Law is silent and “other measures” are not restrictive so could potentially include an asset disclosure order, although there is no judicial precedent on this point.
3. Briefly what is the relevant legal test?
There is no specific legal test. In order to support its application, the applicant must provide the Court with information and evidence relating to the assets proposed to be frozen. The Court will make its decision based on the information that has been provided by the applicant. If necessary, the Court may conduct a site visit to the location of the assets, or require third parties to provide further information about the assets.
4. Briefly what is the process for obtaining a freezing (or equivalent) order?
The applicant is required to submit a written application to the Court which must include supporting evidence and information (including a brief summary of the claim, the reasons motivating the application and details about the assets) and be certified by a local administrative authority. The Court will summon the parties to notify them of the freezing order and a notification of the freezing order will be fixed at the location of the assets/village office, local Courts and other concerned sectors (for example, if the order freezes land, then the Department of Land management will be notified). If the respondent wishes to challenge the freezing order, they have seven days from the date of the order to appeal.
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?
There is no requirement for the applicant to provide security or make a commitment to provide compensation.
6. Can it be sought against third parties?
No. A third party to the substantive proceedings cannot be a party to the order but it is enforceable against individuals, organizations or enterprises (who have notice of it) that may be in possession of, or occupying, the disputed asset(s), whether a party to the order or not.
7. What assets are covered by a freezing (or equivalent) order?
All movable assets and immovable assets (including intangible) within the jurisdiction are covered.
8. Can a freezing (or equivalent) order be made in support of substantive proceedings abroad?
Yes. Freezing orders are not restricted to disputes governed by Lao PDR law. They can be applied for in relation to judicial proceedings abroad.
9. Can a freezing (or equivalent) order be made in support of arbitration proceedings or awards?
Yes. All arbitrations in Lao are conducted via the Economic Dispute Resolution Organization (EDRO) and any party may ask the EDRO to request that the Court issues measures to protect the relevant assets, including by way of a freezing order. This is because the EDRO has no power to make a freezing order itself.
10. At what stage of proceedings can a freezing (or equivalent) order be sought?
A freezing order can be obtained at any stage of the dispute resolution process (arbitration or litigation), including after judgment is handed down to assist with enforcement. However, a freezing order cannot be sought before proceedings have begun.
11. Are there typically any exceptions to the general prohibition on the respondent’s use of assets subject to a freezing (or equivalent) order?
Lao Civil Procedure Law does not specify any exceptions. However, in practice the Court can make a freezing order subject to certain conditions which may allow for some frozen assets to be used (for example, to allow for necessary living expenditure).
12. What happens after a freezing (or equivalent) order is granted?
The Court will notify the parties and any relevant third parties, such as the banks where any frozen accounts have been opened, as well as any organizations that hold the assets and local offices where the assets are located. In addition, the Court will fix notification of the freezing order on the board of the places or organizations where the assets are located.
13. Who pays the costs of the application for a freezing (or equivalent) order?
The applicant is responsible for the costs of obtaining the freezing order and its enforcement.
14. What protections are there typically in a freezing (or equivalent) order for third parties to such orders?
All relevant parties, including third parties who have notice of it, must implement and obey the freezing order. However, if a third party wishes to challenge the order, they have the right to object or appeal. There are no automatic protections for third parties under Lao Civil Procedure Law, but protections may be included in the freezing order at the Court’s discretion.
15. What are the consequences of breach of a freezing (or equivalent) order?
Individuals, organizations or enterprises who violate any aspect of the order shall be liable for any damage caused. If any person or legal entity (including third parties who have notice of it) violates the terms of the freezing order, such violations shall be considered an offence under the Penal Code and shall be punishable by loss of liberty for a term of three months to two years and with a fine in the amount of LAK 1,000,000 (around US$80) to LAK 5,000,000 (around US$430).
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)?
A third party has a duty to comply with a freezing order but this does not amount to a duty of care in favor of the applicant.
17. Can a freezing (or equivalent) order be enforced abroad?
The Lao Court has neither the authority nor the enforcement capacity to issue freezing orders for assets outside the Lao PDR for civil matters.
18. Can freezing (or equivalent) orders from overseas jurisdictions be enforced in this jurisdiction?
Lao PDR recognizes decisions issued by foreign Courts and allows for the enforcement of foreign arbitration awards. However, it is not clear whether freezing orders from overseas jurisdictions can be enforced in Lao PDR as the Civil Procedure Law of Lao PDR is silent on this point and there is no judicial precedent that clarifies the position.
Contact
Standre Bezuidenhout Partner DFDL Vientiane, Laos laos@dfdl.com www.dfdl.com/locations/lao-pdr
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