Peru
1. Are freezing orders (or their equivalent referred to below) available in civil legal proceedings in this jurisdiction and what is their effect?
Yes, freezing orders may be obtained in a Commercial or Civil Court, the effect being that the respondent/defendant’s assets specified in the order are immobilized until its enforcement or further order of the Court. The orders most commonly apply to a respondent’s assets held by banks or financial institutions.
2. Are other interim orders commonly made in conjunction with a freezing (or equivalent) order?
No.
3. Briefly what is the relevant legal test?
A Court will require that the application satisfies the following three elements:
(i) the applicant must have a sufficiently arguable underlying legal claim;
(ii) there must be a real risk of unjustified dissipation of the respondent’s assets; and
(iii) the freezing order must be a proportionate and appropriate remedy in light of the nature of underlying claim.
4. Briefly what is the process for obtaining a freezing (or equivalent) order?
The applicant or claimant makes an application to the Court before or after the start of the legal claim with supporting evidence in the form of an affidavit. All applications are made without notice to the respondent.
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, all freezing orders applications must be accompanied by a counter-cautionary measure, which in Peru commonly takes the form of a banker’s bond. If a respondent or defendant suffers damage as a consequence of the freezing order, it can request the enforcement of the banker’s bond.
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 when it has sufficient connection with the main claim.
Equally, a third party which is not a party to the freezing order (for example, a financial institution holding the defendant’s assets) will typically be notified of the order so as to freeze the assets of the respondent or defendant.
7. What assets are covered by a freezing (or equivalent) order?
Any tangible or intangible asset in Peru.
8. Can a freezing (or equivalent) order be made in support of substantive proceedings abroad?
Yes, although it is necessary to complete a process of exequatur (enforcement of overseas ruling), which will take more than one year.
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?
An applicant can seek a freezing order either before or after filing their underlying legal claim, although, if beforehand, the applicant has ten working days to file their claim.
11. Are there typically any exceptions to the general prohibition on the respondent’s use of assets subject to a freezing (or equivalent) order?
Exceptions include the following:
(i) goods constituting family patrimony or inheritance as certified by a judge or notary;
(ii) garments for personal use and goods indispensable for survival;
(iii) vehicles and tools indispensable for the work of the respondent;
(iv) badges, uniforms and arms of the army and police;
(v) a worker salary less than US$550.00;
(vi) child support;
(vii) movable property of religious temples;
(viii) graves;
(ix) Peruvian State assets.
12. What happens after a freezing (or equivalent) order is granted?
The Court will notify third parties (such as banks) of the freezing order when they may hold the respondent’s assets. The order is notified to the respondent, who has five working days to challenge it, failing which the order will continue for the remainder of the legal proceedings (although this is subject to appeal before the superior Court, action that does not suspend the order and would only affect it if it is finally declared founded).
13. Who pays the costs of the application for a freezing (or equivalent) order?
The applicant or claimant pays the costs to obtain the freezing order. At the final determination of the underlying litigation, the Court will rule if the respondent or defendant must pay the applicant’s cost of obtaining the freezing order.
14. What protections are there typically in a freezing (or equivalent) order for third parties to such orders?
Banks or financial institutions are obliged to comply with freezing orders without having the possibility to object, unless there are not enough assets to do so. Considering this, as long as the freezing orders are executed according to the instructions they contain, there are no liabilities involved for third parties.
15. What are the consequences of breach of a freezing (or equivalent) order?
In Peru a deliberate or innocent breach of a freezing order by the respondent or a third party holding the assets, who has notice of the order, is subject to subsequent declaration of civil liability and compensation to the damaged party, severe fines, and, in the most serious cases, the corporate individual in charge could be criminally prosecuted for the crime of disobedience to authority.
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, because third parties are in charge of duly executing freezing orders. Consequently, if for any reason attributable to a third party the freezing order ends up not being executed, civil liability would be activated towards the party who has been damaged, in addition to severe fines and the criminal liability that could fall on the official in charge.
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?
Yes, although it is necessary to complete a process of exequatur (enforcement of overseas ruling), which will take more than one year.
Contact
Manuel Villa-García Partner Estudio Olaechea Lima, Perú manuelvilla-garcia@esola.com.pe www.esola.com.pe
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