Latvia
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 Civil Procedure Law provides for the possibility to request the securing of a claim or the application of interim protection. Measures for securing a claim can be applied in monetary claims, while interim measures can be applied in both monetary and non-monetary claims. The securing of the claim or interim protection may be applied for simultaneously.
Effect: The Respondent is prohibited from dealing with the assets referred to in the Court’s order or is required to perform certain actions or refrain from performing certain actions until a specified time (e.g. judgment or payment) or further order of the Court.
The purpose of securing the claim is to prevent the risk of non-execution of a judgment in monetary claims. In contrast, interim measures apply to all civil disputes and aim to regulate disputed legal relationships until the final resolution of the case.
2. Are other interim orders commonly made in conjunction with a freezing (or equivalent) order?
As mentioned previously, in addition to securing a claim, it is also possible to request interim protection. Moreover, the Claimant can request not only seizure of the Respondent’s assets, but also other types of interim measures or means of securing a claim (e.g. prohibition on a Respondent performing certain activities or an obligation on the Respondent to perform specific activities within a specified period, the interim regulation of disputed relationships, etc).
3. Briefly what is the relevant legal test?
In an application for the securing of a claim, the Claimant must demonstrate:
(i) the existence of a right under the obligation for which the claim security is sought; and (ii) the circumstances indicating a potential obstacle to, or impossibility of, enforcing the Court’s judgment.
When deciding whether to secure a claim or apply interim measures, the Court or Judge will consider the prima facie validity of the claim and the proportionality between the legal interests of the parties.
The assessment of the prima facie validity of the claim involves a formal assessment of the likelihood of the claim being successful, i.e. it must be established that the likelihood of the claim being successful is greater than the likelihood of the claim being dismissed. The assessment of proportionality between legal interests of the parties means that the Court must assess whether the Claimant’s legal interest is seriously threatened, and this threat must be weighed against the threat to the Respondent’s legal interest.
In turn, when deciding to apply interim measures, the Court must evaluate, in addition to the prima facie validity of the claim, the criterion of substantial harm.
4. Briefly what is the process for obtaining a freezing (or equivalent) order?
The Claimant must submit a reasoned application to the Court. Namely, the application must include inter alia information regarding:
(i) the subject-matter of the claim; (ii) for claims of a financial nature, the amount claimed; (iii) the means for securing the claim or the interim measures applied for; and (iv) the circumstances by which the Claimant justifies the necessity for securing a claim or applying interim measures.
The application also must be accompanied by evidence substantiating the circumstances that justify the necessity for securing the claim or granting interim protection.
The prospective Claimant may request the provision of security for a claim before its filing in court, and even before the obligation’s due date, if the debtor, to evade fulfilment of the obligation, removes or disposes of their property, leaves their declared residence or place of residence without notifying the creditor, or engages in other actions indicating a lack of good faith. The Claimant must provide evidence of its right to bring an action and the need to secure the claim.
In addition, the prospective Claimant may request interim protection prior to filing the claim if such protection is necessary immediately to prevent substantial harm.
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?
When granting a request for securing a claim or applying interim measures, or when denying a request to revoke the security of a claim or interim measures, the Court or Judge may require the Claimant to provide security for any potential losses the Respondent may incur due to these actions. This is done by depositing a specified sum of money into the bailiff’s escrow account. In certain cases, the Court is obligated to require this security.
This requirement does not apply to individuals who are legally exempt from paying the state fee.
The Respondent is entitled to seek compensation for losses incurred from the securing of a claim or interim measures if such security or measures have been revoked as prescribed by law.
6. Can it be sought against third parties?
Generally, obligations cannot be imposed on third parties who are not participants in the case through a decision of the Court in that case. However, third parties affected by the enforcement of a court’s decision, such as banks holding the Respondent’s assets, are obligated to comply if they are informed of the decision.
The application of interim measures to third parties is a contentious issue and is not explicitly regulated by law. Nonetheless, legislative materials suggest that certain interim measures may be applied to third parties when necessary to prevent substantial and irreversible harm to the Claimant.
For example, the law permits the seizure of payments owed by third parties, including monetary funds held in credit institutions and other financial institutions. Additionally, in cases involving the infringement and protection of intellectual property rights, it is possible to request prohibitions on specific activities, not only against the Respondent, but also against individuals or entities whose services facilitate such infringements or make them possible.
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 or outside.
8. Can a freezing (or equivalent) order be made in support of substantive proceedings abroad?
No, a freezing order cannot be made in support of substantive proceedings abroad.
However, it is important to note that it is possible to request security of enforcement for a foreign Court judgment. This means that when seeking the recognition and execution of a foreign Court judgment, there is also the option to simultaneously request enforcement security by implementing measures to secure the claim.
9. Can a freezing (or equivalent) order be made in support of arbitration proceedings or awards?
Generally, the answer is yes, but in practice, one might face challenges and obstacles in securing a favourable ruling, such as establishing the prima facie validity of the claim. A consistent legal precedent has not yet been set, and this is further complicated by the limited access to such judgments, primarily due to the confidentiality of arbitration proceedings.
Moreover, it is possible to request security of enforcement for a foreign arbitral award. This entails that, in the process of seeking recognition and execution of a foreign arbitral award, there is also the option to concurrently request measures to secure the enforcement of the award.
10. At what stage of proceedings can a freezing (or equivalent) order be sought?
At any point during the proceedings or before the initiation of a lawsuit, as well as in the enforcement stage.
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 law specifies a list of properties that cannot be subject to recovery. Where the Respondent is designated as a custodian for movable property, he or she may use the property provided that the use of the property does not destroy the asset or significantly diminish its value.
Additionally, the Respondent has the possibility to request the modification of the applied security or interim measures by substituting them with others.
12. What happens after a freezing (or equivalent) order is granted?
The Court’s decision is enforceable immediately. In case the Court has imposed an obligation on the Claimant to secure losses, the Court’s decision is enforceable upon fulfilment of the respective condition. The Claimant or bailiff notifies third parties, such as banks or the Land Registry, which hold the Respondent’s assets specified in the Court order, about the decision and their obligation to enforce it.
The individual against whom a court decision has been made (i.e., the Respondent) is entitled to apply for the revocation of the Court’s decision. When deciding on the revocation of the applied security or interim measures, the Court shall examine the prerequisites referred to in the relevant legal test, considering the evidence and reasoning submitted by the party. In addition, the Respondent may request to secure the possible damages that he or she might suffer due to Court’s order which has been granted or if the Court’s order is not revoked.
13. Who pays the costs of the application for a freezing (or equivalent) order?
The costs for the application to secure the claim or apply interim measures are to be borne by the Claimant.
The state fee for an application for securing a claim or interim measures application is EUR 70. In addition, the Claimant must bear the cost of the remuneration fees for the bailiff, for carrying out the necessary actions regarding the enforcement of the Court’s decision.
The state fee for an application to secure a claim or application of interim measures, as well as costs related to execution of the Court’s order by the bailiff are expenses related to the examination of a case. Therefore, in case the judgment is positive for the Claimant, the Claimant may request reimbursement of these expenses from Respondent.
14. What protections are there typically in a freezing (or equivalent) order for third parties to such orders?
N/A
If the Court’s order infringes upon the rights of third parties and causes them losses, such parties may pursue general legal remedies, including seeking compensation from the Claimant for damages arising from an unjustified Court decision. Additionally, they may request the revocation of the applied security for the claim.
15. What are the consequences of breach of a freezing (or equivalent) order?
A bailiff oversees the enforcement of the Court’s decision. If the bailiff’s directives are not followed, the non-compliance will be recorded and reported to the Court for a liability assessment. The Court can impose fines on non-compliant parties: up to 360 euros for an individual and up to 750 euros for an official. Additionally, failure to comply with the Court order can lead to criminal charges, with penalties ranging from temporary imprisonment and probation supervision to community service or a monetary 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)?
Generally, a Court decision cannot impose obligations on third parties who are not involved in the case. However, if a Court order does impose an obligation on a third party and they are properly notified, they are required to comply with the Court’s ruling. Failure to do so may lead to criminal liability. Additionally, if a third party is designated as the custodian of seized property, they are responsible for its safekeeping and may face criminal charges for any misappropriation, disposal, concealment, or substitution of the property.
17. Can a freezing (or equivalent) order be enforced abroad?
Yes, in principle, although subject to the laws of the relevant jurisdiction, 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 general no, except for freezing orders (or their equivalent) made in the EU in accordance with EU regulations or binding international agreements.
Contacts
Krista Caune Senior Associate, Attorney at Law, Co-Head of the Dispute Resolution Practice Group Eversheds Sutherland Riga, Latvia krista.caune@eversheds-sutherland.lv www.eversheds-sutherland.com
Agris Bitāns Managing Partner, Attorney at Law Head of the Dispute Resolution Practice Group Eversheds Sutherland Riga, Latvia agris.bitans@eversheds-sutherland.lv www.eversheds-sutherland.com
Explore by region
This guide was updated in June 2024. Eversheds Sutherland takes all reasonable care to ensure that the materials, information and documents, including but not limited to articles, newsletters, reports and blogs, including this guide ("Materials") on the Eversheds Sutherland website are accurate and complete. However, the Materials are provided for general information purposes only, not for the purpose of providing legal advice, and do not necessarily reflect the present law or regulations. The Materials should not be construed as legal advice on any matter. The Materials may not reflect the most current legal developments. The content and interpretation of the Materials and the law addressed in the Materials are subject to revision.
No representation or warranty, express or implied, is made as to the accuracy or completeness of the Materials and therefore the Materials should not be relied upon. Eversheds Sutherland disclaims all liability in respect of actions taken or not taken based on any or all of the contents of the Materials to the fullest extent permitted by law. The Materials are not intended to be comprehensive or to include advice on which you may rely. You should always consult a suitably qualified Lawyer/Attorney on any specific legal matter.
Any views expressed through the Materials are the views of the individual author and may not reflect the views of Eversheds Sutherland or any other individual Lawyer/Attorney.
© Eversheds Sutherland. All rights reserved. Eversheds Sutherland is a global provider of legal and other services operating through various separate and distinct legal entities. Eversheds Sutherland is the name and brand under which the members of Eversheds Sutherland Limited (Eversheds Sutherland (International) LLP and Eversheds Sutherland (US) LLP) and their respective controlled, managed and affiliated firms and the members of Eversheds Sutherland (Europe) Limited (each an "Eversheds Sutherland Entity" and together the "Eversheds Sutherland Entities") provide legal or other services to clients around the world. Eversheds Sutherland Entities are constituted and regulated in accordance with relevant local regulatory and legal requirements and operate in accordance with their locally registered names. The use of the name Eversheds Sutherland, is for description purposes only and does not imply that the Eversheds Sutherland Entities are in a partnership or are part of a global LLP. The responsibility for the provision of services to the client is defined in the terms of engagement between the instructed firm and the client.
Share this page