Slovenia
1. Are freezing orders (or their equivalent referred to below) available in civil legal proceedings in this jurisdiction and what is their effect?
Yes, this most closely corresponds with a security interim order where the respondent may be prohibited from any action (for example, disposing with certain assets, encumbering or altering them), which might endanger the later enforcement of the applicant’s monetary or non-monetary claim (for example, judgment or payment).
2. Are other interim orders commonly made in conjunction with a freezing (or equivalent) order?
The applicant usually requests the imposition of a fine on the respondent (up to EUR 10,000 if the respondent is a natural person and up to EUR 500,000 if the respondent is a corporate entity) in the event of non-compliance with the interim order. The fine may only be imposed if the interim order relates to actions which can only be carried out by the respondent. Although not strictly required, a list of a respondent’s assets may be requested by the plaintiff in enforcement proceedings as a means to enforce a claim. Within litigation proceedings a plaintiff may request the Court to order production of a specific document, which could also include specific information on the respondent’s assets.
3. Briefly what is the relevant legal test?
If the interim order relates to a monetary claim, the applicant (creditor) must demonstrate as probable that:
(i) his claim against the respondent (debtor) exists or that a claim against the respondent will arise; and
(ii) there is a danger of the respondent’s disposition of assets, by which the latter’s enforcement procedure will be unsuccessful or considerably aggravated.
If the interim order relates to a non-monetary claim, the applicant must also demonstrate as probable that his claim against the respondent exists or that a claim against the respondent will arise. In addition, the applicant must show as probable one of the following:
(i) that there is a danger that the assertion of his claim will be prevented or made considerably more difficult;
(ii) that the interim order is necessary to prevent the use of force or the occurrence of damage which could only be compensated with great difficulty; or
(iii) that by issuing the interim order, which later proves to be unfounded, the respondent would not suffer more serious adverse consequences than those which the applicant would suffer if the interim order was not issued.
4. Briefly what is the process for obtaining a freezing (or equivalent) order?
The applicant makes an application for an interim order to the Court, in particular setting out the reasons for the application and the basis on which the relevant test is met. An application can be served on the respondent, however this is not mandatory. If the application is served on the respondent, the latter can object to the application. To decide on the application, the Court may conduct a hearing, however, this is rare and generally the order will be based upon the judge’s deliberation of written submissions only.
If the application is ex parte, the application and decision are served on the respondent at the same time. Once the respondent is made aware of an application or interim order they may file an objection. To decide on the objection, the Court may conduct a hearing, however, that is not mandatory.
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 Court may order the applicant to provide security, through which the respondent will be compensated for any damage, caused by issuance and enforcement of the interim order. The imposition of such security is rare.
6. Can it be sought against third parties?
Yes, insofar as third parties hold the respondent’s assets. For instance, this would typically involve banks or the central securities repositories or clearing houses.
7. What assets are covered by a freezing (or equivalent) order?
Any tangible or intangible assets provided they are not perishable. In addition, the interim order may regard substitutable or unsubstitutable actions of the respondent. Typically assets covered are within the jurisdiction, however it is possible to cover assets worldwide if the subject of the obligation under the order is based in Slovenia. For instance, an order prohibiting a Slovenian company from enforcing a bank guarantee in another country.
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 set the applicant a deadline to file an action to assert his claim) or following the judgment. However, an interim order can no longer be sought once the conditions for enforcement are fulfilled.
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 interim order must be limited in accordance with the principle of proportionality, whereby the value to which the interim order relates must not exceed the value of the applicant’s claim. Therefore, the use of respondent’s assets exceeding such value is not restricted.
In addition there are limits on the proportion of the respondent’s income upon which the order can apply, in general it is two thirds or at least 24% of the minimum wage and any income intended for dependents by law.
In addition, in general the interim order may not cover:
(i) objects for respondent’s personal use and household items, insofar as they are strictly necessary for the respondent and members of his household;
(ii) food and fuel needed by the respondent and members of his household for six months;
(iii) machinery, tools and other work equipment which are strictly necessary for the respondent, in order to perform his work;
(iv) cash belonging to the respondent who has a permanent monthly income, up to the monthly amount, which is exempt from the enforcement by law, in proportion to the time until the next income;
(v) orders, medals, war memorials and other decorations and recognitions, a wedding ring, personal letters, manuscripts and the respondent’s files and pictures or photographs of family members;
(vi) aids given to a disabled person; and
(vii) pets when they are not kept for profit.
12. What happens after a freezing (or equivalent) order is granted?
The Court will serve the decision on the interim order on third parties (such as banks), when they hold the respondent’s assets. Assuming the interim order was obtained ex parte (as it often will have been), the application and interim order are served on the respondent at the same time. The respondent may file an objection against the interim order.
If the application for interim order was served on the respondent prior to the issuance of the interim order, the respondent can nevertheless file an objection against the interim order. As described above, the applicant can then file a response to the objection. The Court will either set aside or confirm the interim order. This decision may be appealed before the higher Court.
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 interim order, which is usually decided at the final decision of the underlying litigation. Nevertheless, the Court may decide on the costs in the decision on interim order.
14. What protections are there typically in a freezing (or equivalent) order for third parties to such orders?
The interim order usually does not include any protection for third parties to such orders. Any such protection may nevertheless be included if it is included in the application for the interim order.
15. What are the consequences of breach of a freezing (or equivalent) order?
The applicant may file an application for a monetary fine to be issued to the respondent. If the interim order relates to a prohibition on the disposal of assets, the applicant may also challenge the affected legal transactions.
A third party is liable for breach of an interim order up to the amount of assets which it disposed contrary to the interim order, but only if the disposal was made on the respondent’s instructions. There is generally no difference between the consequences of knowingly or innocently breaching an 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, if it disposed of the respondent’s assets contrary to the interim order on the basis of the respondent’s instructions.
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?
In general, yes, if recognized in Slovenia.
Contacts
Peter Golob Senior Associate Odvetniška družba Rojs, Peljhan, Prelesnik & partnerji o.p., d.o.o. Ljubljana, Slovenija golob@rppp.si www.rppp.si Mojca Mauhler Senior Associate Odvetniška družba Rojs, Peljhan, Prelesnik & partnerji o.p., d.o.o. Ljubljana, Slovenija mauhler@rppp.si www.rppp.si
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