Sweden
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 term freezing order corresponds most closely to a provisional attachment (Kvarstad) in Swedish law. If the Court allows a provisional attachment, the effect will be that the respondent, pending a final judgment in the case or until it deposits sufficient security for the claim, is prohibited from disposing of the assets referred to in the provisional attachment. The assets may for this purpose be temporarily seized by the Swedish Enforcement Authority (Kronofogden).
2. Are other interim orders commonly made in conjunction with a freezing (or equivalent) order?
No, but the Court has the ability to give specific orders in combination with the decision, for example to prohibit the respondent from making any changes to the property covered by the order.
3. Briefly what is the relevant legal test?
The applicant must show probable cause that it has a money claim against the opposing party or superior right to specific property, which is or can be made the basis of judicial proceedings or determined by another similar procedure.
There must be reasonable grounds to believe that the opposing party, in the case of a money claim, will evade payment of the debt by absconding, disposing of property or otherwise, or in the case of a superior right to specific property, will dispose of, substantially impair or otherwise adversely use the property to the detriment of the applicant.
For a provisional attachment to be granted without notice, there must also be is a risk that any delay would undermine enforcement of a judgment.
4. Briefly what is the process for obtaining a freezing (or equivalent) order?
The applicant makes an application to the district Court (Tingsrätt), setting out, in particular, the reasons for the application and the basis on which the relevant test is met.
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 applicant must ordinarily deposit security for the damage that may be caused to the respondent. The applicant will usually be liable for damages suffered by the respondent as a result of the provisional attachment if it, for example, does not initiate legal proceedings in the substantive claim within the prescribed time of one month.
6. Can it be sought against third parties?
No, not without a separate action being brought against such a third party. However, a third party may be liable for unlawfully disturbing, damaging or otherwise utilizing property that is subject to attachment or for knowingly allowing the breach of an order. Further, it has a duty to provide information if the Swedish Enforcement Authority requests it during enforcement of the order (as to which see below). Such requests are often made of banks.
7. What assets are covered by a freezing (or equivalent) order?
Subject to the below, any assets if they are:
(i) within the jurisdiction of Sweden; or
(ii) if the country in which the assets are located recognizes a decision by a Swedish Court regarding provisional attachment. Assets that may not be subject to a provisional attachment include, inter alia, clothing and other items for personal use, and property necessary for the respondent’s accommodation, business or education.
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?
Either before or during the litigation process.
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. Whilst the respondent may not transfer or in any other way dispose of assets subject to a provisional attachment to the detriment of the applicant, the Swedish Enforcement Authority may allow it for special reasons. Such special reasons can include the fact that more assets have been made subject to a provisional attachment than are required to cover the applicant’s claim or that it is appropriate to exchange the assets caught by the order for other assets. In terms of assets required for the respondent’s living and business expenses, this is typically considered at the outset when selecting the assets to be subject to the order (see question 7 above).
12. What happens after a freezing (or equivalent) order is granted?
When the applicant receives the decision from the Court, it is generally the applicant’s responsibility to apply to the Swedish Enforcement Authority for enforcement of the order. The Swedish Enforcement Authority will give notice to any relevant third parties and ensure that the decision is enforced (for example, by seizing or sealing the assets as appropriate).
13. Who pays the costs of the application for a freezing (or equivalent) order?
This is usually decided at the same time as the final judgment in the underlying litigation, with the general rule being that the losing party pays the other party’s costs.
14. What protections are there typically in a freezing (or equivalent) order for third parties to such orders?
Yes, for example where a third party asserts ownership of the property.
15. What are the consequences of breach of a freezing (or equivalent) order?
Anyone who unlawfully disturbs, damages or otherwise utilizes property that is subject to attachment commits an offence under the Swedish Criminal Code. The penalty for this is a fine or imprisonment for a maximum of one year. A third party would also be 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)?
Not applicable.
17. Can a freezing (or equivalent) order be enforced abroad?
Yes, in principle, enforcement abroad can be sought by the applicant itself. The question of enforcement will then be subject to the laws of the relevant jurisdiction.
18. Can freezing (or equivalent) orders from overseas jurisdictions be enforced in this jurisdiction?
Foreign Courts’ judgments (including decisions on attachment) are generally not enforceable in Sweden unless the enforcement is permitted by law. However, the recognition of certain foreign judgments is provided for under specific international treaties and the European regime for EU member states.
Contacts
Oskar Gentele Partner – Co-head of Litigation Eversheds Sutherland Advokatbyrå AB Stockholm, Sweden oskargentele@eversheds-sutherland.se www.eversheds-sutherland.com Felix Perbo Associate Eversheds Sutherland Advokatbyrå AB Stockholm, Sweden felixperbo@eversheds-sutherland.se www.eversheds-sutherland.com
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