Poland
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 respondent is prohibited from dealing with the assets referred to in the freezing order until a specified time (for example, a judgment or payment). While a freezing order may cover assets located both domestically and worldwide, its enforcement out of the jurisdiction depends on the application of local law.
2. Are other interim orders commonly made in conjunction with a freezing (or equivalent) order?
In principle, other interim orders could be made in conjunction with a freezing order. However, it is not common for standard additional interim orders to be made, these would depend on and be connected to the underlying substantive claim.
There are two ways for a creditor to obtain information about a debtor’s assets. Firstly, a creditor may initiate a special judicial procedure (an asset disclosure procedure) to oblige the debtor to submit a written statement of their assets. Secondly, a creditor may order a Court bailiff to search for the debtor’s assets. Furthermore, a Court bailiff may oblige the debtor to explain what kind of assets will allow the creditor’s claim to be satisfied.
3. Briefly what is the relevant legal test?
A freezing order may be sought if:
(i) the underlying claim or prospective claim is substantiated; and
(ii) the claimant has a legal interest in securing its claim (unless the claim is lower than 75,000 PLN in commercial disputes).
A claim will be substantiated if the claimant can demonstrate that the claim exists and that it is justified. However, there is no need to present evidence at this stage.
A legal interest in securing the claim exists where the absence of security would prevent or significantly hinder the enforcement of a judgment issued in the case, or would otherwise prevent or significantly hinder the claimant in achieving the object of the proceedings.
4. Briefly what is the process for obtaining a freezing (or equivalent) order?
The applicant makes an application to the Court, setting out the reasons for the application and the basis on which the relevant test is met. An application is made without notice to the respondent. As a rule, the application is examined by a judge in closed session; the purpose being to avoid the respondent from being alerted to the application and prevent them taking action aimed at frustrating the implementation of the future Court decision. An application hearing attended by both parties only takes place in limited cases.
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. The Court may make enforcement of the freezing order conditional on the applicant’s provision of collateral to secure the claims of the respondent. However, this is not obligatory.
The respondent may claim damages against the applicant for losses caused by the enforcement of security if:
(i) the applicant fails to file a statement of claim by the prescribed deadline or withdraws a statement of claim;
(ii) the statement of claim is returned or rejected;
(iii) the action is dismissed;
(iv) proceedings are discontinued; or
(v) the applicant does not pursue the entire claim or pursues a claim other than that which was secured.
6. Can it be sought against third parties?
No. Only parties to the underlying proceedings can be subject to a freezing order. Furthermore, a third party which is not a party to the freezing order itself cannot be bound by the order.
7. What assets are covered by a freezing (or equivalent) order?
Any tangible or intangible assets. While a freezing order may cover assets located both domestically and worldwide, its enforcement out of the jurisdiction depends on the application of local law.
8. Can a freezing (or equivalent) order be made in support of substantive proceedings abroad?
Yes, provided that a Polish Court is competent to issue a freezing order (i.e. it has national jurisdiction).
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 within two weeks).
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. A freezing order cannot cover things, amounts due or rights which are excluded from execution, including:
(i) household items necessary for the respondent and household members;
(ii) one-month’s supply of food and heating fuel necessary for the respondent and their dependent family members;
(iii) objects necessary for education, personal documents, distinctions and objects of religious practice; and
(iv) some medicinal products.
There are no exceptions to cover the payment of legal expenses by respondents. Furthermore, for a respondent which is a company, there are no exceptions for funds used in the ordinary course of business.
12. What happens after a freezing (or equivalent) order is granted?
Once the Court grants a freezing order, it is necessary to apply to the Court bailiff for enforcement of the Court’s order. A freezing order issued by a judge is only served on the applicant. Service on the respondent is effected by the enforcement authority after the order has been made. A freezing order may also be appealed.
13. Who pays the costs of the application for a freezing (or equivalent) order?
The costs of the application are borne by the applicant. However, the respondent may be ordered to pay those costs if the final determination of the underlying litigation is in favor of the claimant.
14. What protections are there typically in a freezing (or equivalent) order for third parties to such orders?
N/A – please refer to Question 6.
15. What are the consequences of breach of a freezing (or equivalent) order?
Polish law provides for the possibility of imposing sanctions (consisting of an order to pay a certain sum of money to the applicant), on the request of the applicant, in the event that the respondent fails to comply with a freezing order during the proceedings.
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)?
No.
17. Can a freezing (or equivalent) order be enforced abroad?
Yes, in principle, although it is subject to the laws of the relevant jurisdiction.
18. Can freezing (or equivalent) orders from overseas jurisdictions be enforced in this jurisdiction?
Yes. Furthermore, freezing orders (or their equivalent) made in the EU and certain EFTA proceedings are not subject to the exequatur procedure (in contrast to those made in other countries).
Contact
Maciej Jóźwiak Partner – Head of Dispute Resolution Eversheds Sutherland Warsaw, Poland maciej.jozwiak@eversheds-sutherland.pl www.eversheds-sutherland.com
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