Netherlands
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 equivalent is a pre-judgment attachment of assets, also called a leave to attach. The attachee is prohibited from dealing with the assets referred to in the leave to attach until the Court has given judgment in the proceedings on the merits.
2. Are other interim orders commonly made in conjunction with a freezing (or equivalent) order?
No. Obtaining a leave to attach is a relatively uncomplicated procedure.
3. Briefly what is the relevant legal test?
The burden of proof for the applicant is generally low. An explanation of the claim accompanied with relevant documents, such as the contract, invoices and any relevant correspondence, is usually sufficient to obtain a leave to attach. As long as the assets are located in the Netherlands, a leave to attach can be requested from a Court.
4. Briefly what is the process for obtaining a freezing (or equivalent) order?
The applicant makes an application to the Court. The request for a leave to attach must contain the nature of the attachments to be made, the basis of the underlying claim, a specification of the assets concerned, whether proceedings on the merits have commenced and for the attachment of movable or immovable property, intellectual property and shares in Dutch companies, evidence must be provided that there is fear of embezzlement of the assets. When deciding on a request for a leave to attach, the Dutch Court will assess the claim without hearing the attachee (the proceedings are ex parte) and will normally grant the leave within one to two days. No appeal against this decision is permitted.
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?
The applicant does not have to provide security, however where the attachment was wrongful, the applicant can be held liable for the losses of the attachee.
6. Can it be sought against third parties?
Yes. A leave to attach can be sought against third parties. This is called conservatoir derdenbeslag. If there is good reason to suppose that the third party’s assets are in fact the assets of the defendant in the underlying claim or will be available to the defendant to meet a judgment or arbitral award, a leave to attach can be granted.
Equally a third party which is not a party to the leave to attach (for example, a financial institution holding the defendant’s assets) which is notified of the leave to attach, is still required to ensure that they do not knowingly assist the attachee in breaching the terms of the leave to attach. Notification may be made by way of phone call.
7. What assets are covered by a freezing (or equivalent) order?
Any tangible or non-tangible assets are covered by a leave to attach. However, some assets are not suitable for attachment such as pensions or social benefits and earnings to a certain degree (see below under 11). It is not possible to obtain a leave to attach for assets located in other jurisdictions (i.e. outside of the Netherlands).
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) 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?
Yes. In the Netherlands, not all the monies a person receives as a form of income, are attachable. The so-called beslagvrije voet differs from person to person, but generally it can be said that a monthly income between € 1.691,66 and € 2.262,98 (depending on the situation) is not attachable. This amount is reserved for the ordinary living expenses. A leave to attach will also not be granted in relation to basic assets such as food, bedding and clothing. In relation to assets that are vital for the ordinary and proper course of business, a leave to attach will not be granted. When a leave to attach is granted for moveable assets, like vehicles, the respondent can still physically access their assets. To prevent this, assets can be held in gerechtelijke bewaring, which means that the assets are physically withdrawn from the power of the attachee.
12. What happens after a freezing (or equivalent) order is granted?
A party may levy the attachments on the basis on which the leave was granted.
13. Who pays the costs of the application for a freezing (or equivalent) order?
Either the applicant or the attachee may be ordered to pay for the costs of obtaining the leave to attach, which is usually decided during 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?
A third party may set-off on the basis that:
(i) the claim arises from the same legal relationship as the attached claim;
(ii) the claim was due and payable before the attachment was made.
15. What are the consequences of breach of a freezing (or equivalent) order?
An attachee who breaches a leave to attach is criminally liable and can be imprisoned for up to four years and/or receive a fine. This is also applicable (to a lesser extent) to third parties that help the attachee in doing so. Besides a criminal charge, the attachee (or third party) can be held liable for damages suffered by the applicant as a result of the breach of the leave to attach.
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, if the third party ignores the leave to attach, they can be held liable for the damages suffered by the applicant. The third party can be prosecuted if the act is unlawful.
17. Can a freezing (or equivalent) order be enforced abroad?
No, only assets located in the Netherlands are suitable for a leave to attach.
18. Can freezing (or equivalent) orders from overseas jurisdictions be enforced in this jurisdiction?
In general, no (except for a leave to attach (or their equivalent) made in the EU concerning monies held by a bank in the Netherlands and the dispute is taking place across borders).
Contacts
Marie-Hélène Berghuijs Partner Eversheds Sutherland (Netherlands) Amsterdam, Netherlands marie-heleneberghuijs@eversheds-sutherland.com www.eversheds-sutherland.nl Lennart Baijer Principal Associate Eversheds Sutherland (Netherlands) Amsterdam, Netherlands lennartbaijer@eversheds-sutherland.com www.eversheds-sutherland.nl Marije van de Langemheen Senior Associate Eversheds Sutherland (Netherlands) Amsterdam, Netherlands marijevandelangemheen@eversheds-sutherland.com www.eversheds-sutherland.nl
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