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The purpose of precautionary measures is to secure rights. In practice the creditor can use these measures to protect against the risk that the debtor will be unable to pay him.
If purely precautionary measures are not adequate, the court can also order interim measures, which have similar effects to those of actual judgment. The final judgment will then either confirm the interim measures or set them aside.
Interim and precautionary measures can be ordered by the courts in relation to the debtor’s assets. The principle that applies in matters of debt recovery is that the debtor is liable in relation to all his movable assets (cash, furniture, jewellery, stocks and shares) and his immovable assets (land buildings, dwelling). The creditor can also claim against the creditor’s entitlements (bank balances, wages and salaries).
In urgent cases any creditor can apply to the court to authorise the precautionary seizure of the debtor’s seizable assets to (Article 1413 of the Judicial Code (“Jud. Code”) ). The debtor is no longer free to dispose of assets that have been placed under precautionary seizure. He can no longer sell them, give them away or mortgage them. The fact that he cannot dispose of the assets has only relative significance, operating only for the benefit of the creditor obtaining the seizure. The debtor is still the owner of the assets and retains rights of enjoyment.
Sequestration is the bailment (safe-keeping) of assets to which a dispute relates, which must be preserved until the final judgment is given (Article 1955 ff. Civil Code). Sequestration can be agreed by the parties or ordered by the court. Unlike ordinary bailment, sequestration can also apply to immovable assets (Article 1959 Civil Code).
The purpose of drawing up an inventory is to determine the value of a succession, a community of marital property or an indivisum (Article 1175 Jud. Code) on application by a creditor, a spouse or an heir. Those applying for an inventory are entitled to choose the notary who will prepare the deed recording the assets. If they fail to agree, the local court will designate the notary (Article 1178 Jud. Code). In the event of a dispute, the local court has jurisdiction.
Where seals have been placed on assets, they can effectively no longer be disposed of. Where there is a serious interest to be protected, creditors, a spouse or heirs can ask for seals to be placed on assets that are part of a community of marital property, a succession or an indivisum (Article 1148 Jud. Code). Seals are ordered by the local court, which can order them to be released on application from the person who placed them, the creditors, the spouse or the heirs. If the release of the seals is challenged, the decision again lies with the local court.
Interim or provisional measures are measures that can be withdrawn and are not irrevocable. They are ordered in interlocutory proceedings or in the course of proceedings on the merits.
Provisional enforcement is possible on very strict conditions when judgment has been given but is not yet absolutely final. In other words when there is still a possibility of appealing against a judgment, the judgment has the force only of relative res judicata but cannot yet be enforced, which can have negative consequences for the party seeking to induce the other to discharge his obligation. In certain cases the claimant can apply to the court to order provisional enforcement. One form of provisional enforcement is to place the creditor’s assets under precautionary seizure.
A person who has had judgment given for him, even if it was given abroad, may instruct a court bailiff to place the assets of the judgment debtor under precautionary seizure. If the creditor has not had judgment given for him, a court order will be necessary. An arbitrator cannot order precautionary seizure (Article 1696 Jud. Code).
Applications are made to the court of seizures and are heard in interlocutory proceedings (Article 1395 Jud. Code). The period of the summons must be at least two days, though it can be shortened in urgent cases.
A unilateral application for precautionary seizure is deposited by the advocate with the court of seizures, which the has jurisdiction to order it. The court of seizures must give judgment within eight days. The judgment must then be served by bailiff on the debtor, with the seizure order, to ensure that the debtor is acquainted with it.
The judgment is provisionally enforceable and has the force only of relative res judicata. The court of seizures can always amend or withdraw the judgment in response to changed circumstances. Bailiff’s fees are determined by Royal Decree of 30 November 1976 (B.S., 8 February 1977).
In the event of sequestration by agreement, the agreement between the parties is enough and there is no need for a court order. Judicial sequestration, on the other hand, is court-ordered.
In both cases a receiver is designated either by the agreement or by the court. He must manage the assets entrusted to him with all due care and attention. He must return the assets when the sequestration comes to an end. He is entitled to remuneration as determined by the law (Article 1962(3) , Civil Code).
Interim measures must always be applied for to the courts, either in interlocutory proceedings or in the course of proceedings on the merits. Arbitrators can also order interim measures (Article 1696 Jud. Code).
The President of the Court of First Instance gives a provisional decision in all urgent cases that are not reserved by statute for the courts themselves (Article 584(1) , Jud. Code). The fact that the decision is provisional means that it has no definitive and irrevocable effects. The Presidents of the Commercial Court and the Employment Tribunal can give provisional decisions in all urgent cases that are within their jurisdiction.
Interlocutory decisions may not be detrimental to the principal action, which means that the judgment has therefore only of relative res judicata. The court hearing the principal action is not bound by it, so the court hearing the interlocutory proceedings can issue only interim measures.
In divorce proceedings, for example, the President of the Court of First Instance can order interim measures relating to the person, the assets and the subsistence of the spouses and also of the children (Article 1280(1) , Jud. Code).
The other side is formally informed by bailiff of the measures ordered and called on to comply with them, if necessary with the support of the police and the possibility of periodic penalty payments being ordered. Bailiff’s fees are determined by Royal Decree of 30 November 1976 (B.S., 8 February 1977).
Giving judgment at first instance, the local court can order interim measures for the duration of the shared life of married or legally cohabiting partners where their relationship has broken down, regarding matters such as the family home or the person and property of the children. Such measures are purely provisional and end when the parties cease to live together. They cannot provide a durable basis for a divorce. The definitive divorce settlement must go through the Court of First Instance.
A judgment constitutes an enforceable statement of entitlement. As long as it has not become definitive, it cannot be enforced. Enforcement is suspended while the law allows a possibility of appealing, but not where there is a possibility of appealing for cassation (Article 1397 Jud. Code).
A court giving a final judgment can permit interim enforcement of it except in the cases specified by the law (Article 1398 Jud. Code). Such cases are divorce, separation, opposition to the marriage and annulment. And if the decision does no more than order payment of a fixed sum of less than €1860 it cannot be provisionally enforced (Article 1399 Jud. Code).
If interim enforcement is available, it proceeds at the risk of the party applying for it. The court has the option of imposing conditions for it by requiring the party applying to give security (Article 1400(1) Jud. Code). The party applying can embark on enforcement but must make a payment into the Deposito- en Consignatiekas or provide a bank guarantee, since the case may go to an appeal and the other party may then be entitled to compensation.
Precautionary seizure is possible only in urgent cases and if the amount of the debt is certain, fixed and due.
Urgency implies that the debtor's solvency is in doubt, putting the creditor’s claims on his assets at risks. Precautionary seizure can not only be used as a means of bringing pressure but is also a legitimate tool where the debtor’s financial position is objectively vulnerable. There must be a degree of urgency both when the seizure is effected and when the time comes for the court to rule on it.
The applicant’s claim must be certain, meaning that there is clear justification for it and no reasonable grounds for challenging it. The claim must also be fixed. The amount must be determined or at least capable of being determined for a preliminary estimate. If the exact amount of the debt is not yet fixed, the court ordering the seizure will estimate it. Lastly, the debt must be due; the creditor must be entitled to call it in. Article 1415 of the Jud. Code adds a rider to this condition, so that claims relating to periodic incomes (alimony, rents etc.) and even contingent claims can be covered by the precautionary seizure.
Judicial sequestration can be ordered by the court for moveable assets that have been seized by a creditor, for immovable or movable assets where ownership or possession is disputed by two or more persons, and for objects proposed by a debtor in settlement of his debt (Article 1961 Civil Code). This generally means whenever the circumstances of the case warrant the use of sequestration as a form of precautionary measure in order to preserve the status quo pending settlement of the dispute. Urgency is irrelevant. But the courts will be cautious in their use of sequestration as a serious, exceptional measure to be accepted only where there is good reason.
A case can be handled in interlocutory proceedings only where it is so urgent that, if an immediate solution is not found, the applicant party will sustain substantial loss or inconvenience. The urgency of the case is thus one of the main requirements for interlocutory proceedings to be possible.
Interim measures in proceedings on the merits must also be a matter of urgency. Consequently, we speak of “urgent interim measures” that can be applied for to the local court.
The criterion for the courts when deciding whether or not to order provisional enforcement is the risk that the applicant party runs if the enforcement of the judgment is unnecessarily delayed or impeded by the other party. If the other party appeals simply in order to prevent the judgment being enforced, that constitutes good grounds for the court that gave the original judgment to order provisional enforcement. In certain cases, however, provisional enforcement is forbidden (see above).
All types of assets (movable, immovable, intangible) can be taken into precautionary seizure. But certain types of assets cannot be seized, or can be seized only partly. What cannot be seized is determined by statute, by the nature of the assets or by the relationship between the assets and the debtor.
The assets that cannot be seized are enumerated in Article 1408 Jud. Code. They include basic necessaries, items needed for the person or his children to study or work, items needed for religious worship, foodstuffs and fuel. Article 1410(2) of the Jud. Code enumerates the sums of money that are excluded from seizure. They include family allowances and minimum subsistence incomes.
Wages and salaries and the like can be seized only in part. The amounts are determined by Article 1409(1) of the Jud. Code and are adapted annually by Royal Decree on the basis of the consumer price index. Article 1410(1) of the Jud. Code extends the scope of this adaptation of the excluded amounts to other sources of income such as alimony, pensions and unemployment and general or industrial disability allowances.
Property that can be seized is listed by the bailiff in an official report with a view to subsequent resale, unless an agreement can be reached with the creditor with the bailiff acting as intermediary. It is a criminal offence to dispose of property thus recorded by the bailiff.
Judicial sequestration can be ordered by the court for moveable assets that have been seized by a creditor, for immovable or movable assets where ownership or possession is disputed by two or more persons, and for objects proposed by a debtor in settlement of his debt (Article 1961 Civil Code).
The local court can order interim measures for the duration of the shared life of married or legally cohabiting partners where their relationship has broken down, regarding matters such as the family home or the person and property of the children. This applies only to married couples (Article 223(1) , Civil Code) and legal cohabitors (Article 1479(1) , Civil Code) , but not to de facto cohabitors.
In principle a court giving a final judgment can always permit interim enforcement of it except in the cases specified by the law (Article 1398 Jud. Code). Such cases are divorce, separation, opposition to the marriage and annulment. And if the decision does no more than order payment of a fixed sum of less than €1860 it cannot be provisionally enforced (Article 1399 Jud. Code).
The owner of the assets that are seized does not lose the rights of ownership and enjoyment (use, rental, income etc.) in them. He simply cannot dispose of them or mortgage them. The result is that all dealings by the owner of the assets that are seized contrary to this prohibition are valid but cannot be pleaded against the author of the seizure, who can thus disregard them and act as if they had not taken place.
Sequestration, like any other bailment, means that the actual possession of assets is transferred to the sequestrator, who can engage only in certain dealings for heir preservation.
The effect of provisional enforcement is that the judgment is enforced even though it is still possible to challenge it or appeal against it. The applicant party bears the risk (see above).
Precautionary seizure is basically limited to three years. The judge ordering it may set a shorter period. The order may be renewed as long as the original time-limit is still running. Renewal – which actually means extending the existing time-limit – is ordered where there are good reasons and there is still an element of urgency.
The imposes no limits on the period for which a sequestration can remain valid. If there is no longer a risk that assets will not be preserved in their proper state and a final settlement is in sight, the sequestration order is lifted.
There is no general statutory limit for the validity of interim measures. A final judgment in the case can confirm or withdraw interim measures.
Urgent interim measures ordered by the local court cease to apply when the principal proceedings commence. But from that time forward the Court of First Instance has jurisdiction, and interim measures can be applied for to the President of the Court of First Instance.
Where the court refuses to order precautionary seizure, the applicant can appeal within one month of the decision being announced (Article 1419(1) and 1031 Jud. Code). The case is treated as it was before the original court; the judgment is deliberated in chambers. If seizure is ordered on appeal, the person whose assets are being seized and wishes to oppose this must enter a third-part challenge in the Appeal Court.
Where the court agrees to order precautionary seizure, the person whose assets are being seized and any other interested party can enter a third-party challenge (Article 1419 Jud. Code). The third-party challenge must be brought within one of the decision being announced and is deposited with the court that made the original order (Article 1125 Jud. Code). The third-party challenge has no suspensive effect unless the court making the order agrees to suspend enforcement.
Not applicable in the case of sequestration by agreement between the parties.
Judicial sequestration is a court order against which the appeal procedures provided for by the Judicial Code all.
Any party who is adversely affected by a decision given in interlocutory proceedings can appeal or enter a third-party challenge. Appeals against orders by the President of the Court of First instance or the Commercial Court lie to the Appeal Court. Appeals against orders by the President of the Employment Tribunal lie to the Employment Court.
The time allowed for entering an appeal or a challenge is one month from service of the order in cases where proceedings were commenced by simple summons or voluntary appearance and one month from service of the order by judicial letter in cases where the order was made on a unilateral application.
There is no appeal against a provisional enforcement order. The Appeal Court has no power to forbid or suspend a provisional enforcement order (Article 1402 Jud. Code).
Last update: 24-05-2006