Norway
1. Are freezing orders (or their equivalent referred to below) available in civil legal proceedings in this jurisdiction and what is their effect?
Yes – both domestic and worldwide. The respondent is prohibited from dealing with the assets referred to in the freezing order 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?
Not usually. On a general basis, an applicant does not have to obtain an asset disclosure order alongside a freezing order. The information one would get through an affidavit is normally given at the oral hearing regarding the validity of the freezing order. The Court can however ask for more information regarding whereabouts of certain assets if need be.
3. Briefly what is the relevant legal test?
The applicant must prove:
(i) their underlying substantive or prospective claim; and
(ii) the grounds for the freezing order on the balance of probabilities. The Court will examine the claim and, through a preliminary ruling, will determine whether the claim is proved.
There will be grounds for a freezing order if the respondent’s behavior gives reason to fear that:
(i) the later enforcement of the claim, without the freezing order, would be forfeited or made significantly complicated; or
(ii) the claim would have to be enforced outside of Norway. The respondent can avert the freezing order by providing financial security for the claim.
4. Briefly what is the process for obtaining a freezing (or equivalent) order?
The applicant makes an application to the Court. An application can be made on or without notice to the respondent. If it is made without notice, the application must state why it is important not to give notice to the respondent before the Court evaluates the application. The Court decides whether the respondent is notified or not, and whether an oral hearing is to be held before or after the Court order 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. Pursuant to the Dispute Act, an applicant must, under certain circumstances, compensate the respondent for any loss that it has sustained as a result of the freezing order. Compensation claims can be brought before the district Court through an ordinary action or a case to set aside the freezing order.
The applicant may be required to provide security for compensation to the respondent as a condition to the execution of the freezing order. This is typically relevant prior to the issuance of the freezing order, rather than after the claim is ultimately found unsuccessful.
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 where there is good reason to assume that its assets are in fact the assets of the defendant in the underlying litigation or will be available to the defendant to meet a judgment or arbitral award. Equally a third party which is not a party to the freezing order (for example, a financial institution holding the defendant’s assets) which is notified may still be 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?
Most tangible or intangible assets provided they are not perishable, whether within the jurisdiction (a domestic freezing order) or outside (a worldwide freezing order).
8. Can a freezing (or equivalent) order be made in support of substantive proceedings abroad?
Yes, if the foreign Court’s decision is binding in Norway.
9. Can a freezing (or equivalent) order be made in support of arbitration proceedings or awards?
Yes, if the arbitration award is binding in Norway.
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?
The respondent’s use of the specific assets subject to a freezing order is generally limited to actions that do not reduce their value or harm the applicant’s interests. The Court cannot, with a few exceptions, grant a freezing order for assets that are deemed as necessary living expenses for the respondent. The consideration of the respondent’s financial obligations is therefore taken into account before a freezing order is granted. However, there are no exceptions specifically for legal expenses, or for ordinary business expenditure where a respondent is a business entity rather than an individual.
12. What happens after a freezing (or equivalent) order is granted?
The Court will immediately send the order to the bailiff’s office, which will notify third parties (such as banks) of the freezing order if they might hold the respondent’s assets. Assuming the original order was obtained without notice, the respondent cannot appeal the order. However, the respondent and affected third parties may file a motion for an oral hearing. After a hearing, the original order will usually either be set aside, extended or replaced. This may be appealed.
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, depending on the outcome of the underlying litigation. The Court fee is paid for by the applicant, but may be claimed as costs reimbursed if the freezing order is granted.
14. What protections are there typically in a freezing (or equivalent) order for third parties to such orders?
(i) A third party is not prevented from exercising any rights of set-off arising prior to its notification of the freezing order.
(ii) 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.
(iii) As regards assets outside of the jurisdiction, a freezing order usually 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.
15. What are the consequences of breach of a freezing (or equivalent) order?
A respondent who disobeys a freezing order may be criminally liable and may be imprisoned, fined or have their assets seized. A third party may be criminally liable 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)?
Yes. The freezing order is issued in respect of an asset, and whoever has control over the asset must act in compliance with the order. A third party can also be criminally liable for non-compliance with the order.
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 typically only be sought with the permission of the Court, by order of other authorities with the relevant power, by arbitration or by agreement between the parties. The enforcement itself will be a matter of local law.
18. Can freezing (or equivalent) orders from overseas jurisdictions be enforced in this jurisdiction?
Yes. In accordance with the Lugano Convention of 2007, freezing orders (or their equivalent) made in the EU and EFTA by the EEA Agreement can be enforced in Norway.
Contact
Pål Martin Abell Partner Advokatfirmaet Haavind AS Haavind Oslo, Norway p.abell@haavind.no haavind.no/en
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