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Last update: 09-06-2006
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Interim and precautionary measures - Germany

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TABLE OF CONTENTS

1. What are the different types of measures? 1.
1.1. preventive annex of movable property and arrest of the debtor (section 916 et seq Code of Civil Procedure [ZPO]) 1.1.
1.2. interim injunction (section 935 et seq ZPO) 1.2.
1.3. seizure notice (section 845 ZPO) 1.3.
1.4. execution of provisional enforcement orders (section 708 et seq ZPO) 1.4.
2. What are the conditions under which these measures may be issued? 2.
2.1. Please describe the procedure 2.1.
2.2. Please describe the substantive conditions 2.2.
3. Object and Nature of these Measures 3.
3.1. What types of assets can be subject to such measures? 3.1.
3.2. What are the effects of such measures? 3.2.
3.3. What is the validity of such measures? 3.3.
4. Is there a possibility of appeal against the measure? 4.

 

1. What are the different types of measures?

These are measures aimed at protecting the creditor by means of the provisional seizure of a debtor’s assets or by an interim ruling on the legal situation, though the measures do not in themselves satisfy the creditor.

See below for details of the available measures:

1.1. preventive annex of movable property and arrest of the debtor (section 916 et seq Code of Civil Procedure [ZPO])

Preventive annex is enforced by issuing a compulsory execution order against the assets of the debtor (section 928 ZPO) and personal arrest can take the form of taking the debtor into custody or some other restrictions on his personal freedom specifically ordered by the court (section 933 ZPO).

1.2. interim injunction (section 935 et seq ZPO)

This is an order made by the court with provisional effect which aims to protect a claim or maintain peace under the law.

1.3. seizure notice (section 845 ZPO)

The seizure notice is a private means of compulsory execution on the part of the creditor.

1.4. execution of provisional enforcement orders (section 708 et seq ZPO)

This is a matter of the execution of rulings that did not have formal legal force at the time they were delivered.

2. What are the conditions under which these measures may be issued?

2.1. Please describe the procedure

Each of the measures described above needs an appropriate form of application to the court. The only case in which the creditor (or a bailiff acting on his behalf) can act without prior application to the court is by seizure notice [Vorpfändung]. Where a seizure notice is served, the court must make an order enforcing seizure within one month for the seizure to be valid as enforceable within the period specified in the service (section 845 paragraph 2 ZPO).

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Arrest of the debtor or preventive annex and interim injunction are valid only with a court order - depending on whether the court’s decision was preceded by oral proceedings or not, such orders will be rulings [Urteile] or decisions [Beschlüsse].

The seizure notice (for details, see above) is not made by court order. In this instance, the creditor takes the initiative himself (usually by appointing a bailiff to act for him) and seeks to obtain execution on the strength of an enforceable legal document by, in the course of enforcement of claims or other rights, serving the third-party debtor and the debtor himself (or causing them to be served) with a written declaration to the effect that the creditor intends to execute the right or claim by levying an annex(section 845(1) ZPO). Notification of the third-party debtor has the effect of an arrest as defined in section 930 ZPO to the extent that the annex in respect of the debt is effected within one month (section 845(2) ZPO).

The provisional execution of a ruling is delivered upon application in the ruling itself by the court. It enables execution before the ruling has formal legal force. Execution of a ruling which is only provisionally enforceable can be made dependent upon payment of a security (sections 708, 709 ZPO).

The responsibility for issuing the arrest or annex order lies with both the court handing the principle case and the county court [Amtsgericht] in the district of which the property to be attached or the person to be restricted in his personal freedom are located. Only the court handling the principal case has the jurisdiction to deliver an interim injunction.

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There is no requirement for a creditor to be legally represented when applying for an arrest or annex order or an interim injunction.

Enforcement of the interim precautionary measures is mainly the province of the bailiff.

Costs

The Court Fees Act [Gerichtskostengesetz – GKG] determines that a full fee [volle Gebühr] is payable for the application proceedings for delivery of an arrest or annex order or an interim injunction. The amount of the fee is determined by the value of the disputed matter. The court estimates the latter from case to case according to the interest of the applicant in the realisation of the debtor’s assets. A fee table for sums in dispute up to Euro 500,000.00 is attached to these comments in Annex-1- PDF File (PDF File 8 KB). If the application is the subject of oral proceedings and if the case is not ended by withdrawal of the application before conclusion of the oral proceedings, acknowledgement of debt, waiver or settlement, a higher fee is payable, equal to 300%. The costs are borne primarily by the party against whom the court awards costs in its ruling – additionally, the applicant, as the instigator of the case, is also liable for costs.

Enforcement of the court order through the instruments of the state (execution) is conducted in accordance with the regulations currently in force for the enforcement of court rulings.

The bailiff charges a fee of Euro 2.50 for each postal service of a seizure notice to the debtor and to the third-party debtor named in the notification. In addition, there are postal charges and expenses chargeable for any certifications that may be necessary. The fee for personal service of the notice by the bailiff is Euro 7.50, in which case the bailiff’s travel expenses are also payable. Depending on the distance travelled to the addressee’s premises, these will be between Euro 2.50 and 10.00. The bailiff’s fee for preparing the seizure notice himself on behalf of the creditor (section 845(1) sentence 2 ZPO) is Euro 12.50 to cover the official handling costs.

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The compulsory execution of a provisional enforcement ruling is essentially not different from compulsory execution of a legally enforceable order. Depending on the nature of the allowed claim, however, the law lays down different means of compulsory enforcement:

If the debtor has acknowledged that a particular sum of money is due, the creditor frequently uses the bailiff to enforce the court’s ruling. A fee of Euro 20.00 is chargeable for the annex of movable property by the bailiff. If the bailiff’s working time is greater than three hours, a further charge of Euro 15.00 is payable for each additional hour or part of an hour. In addition, any necessary expenses incurred by the bailiff will be charged. The creditor’s entitlement to payment can give him the right to apply for an annex to be levied by the court upon the debtor’s claims (e.g. an annex levied upon the debtor’s earnings - section 829 ZPO). A fee of Euro 10.00 is levied for proceedings concerning the application and incidental expenses (especially the costs of serving the court’s decision) are charged separately.

For execution levied against real property of the debtor, either a debt-securing mortgage is entered in respect of the debt, or the property is subject to forced sale by auction or to forced administration. The law covering costs in cases involving voluntary jurisdiction (Cost Code – KostO) lays down that a full fee commensurate with the value of the debt to be secured is payable for entering a debt-securing mortgage in the Land Register. A fee table for sums up to Euro 1 million is attached to these comments in Annex-2- PDF File (PDF File 10 KB). A fee of Euro 51.00 is chargeable for an application for an order imposing forced sale by auction or forced administration of real estate.

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If the ruling holds that the debtor must deliver a piece of movable property, the bailiff will, upon application by the creditor, enforce the court’s decision. A charge of Euro 20.00 is payable for the official work involved. Where the ruling holds that the debtor must deliver a piece of real estate or a dwelling, work in connection with vacating the property attracts a charge of Euro 75.00. In addition, the bailiff’s incidental expenses are chargeable, in particular those for the work of third parties (e.g. removal costs, locksmith’s charges etc.). If the bailiff’s working time is greater than three hours, a further charge of Euro 15.00 is payable for each additional hour or part of an hour.

2.2. Please describe the substantive conditions

The delivery of an arrest or annex order presupposes that there is a debt (annex annex claim) and that there are grounds for arrest or attachment. In the case of preventive annex of property by which the whole of the debtor’s attachable assets are seized, grounds for the annex are deemed to exist if there is a fear that the debtor will, by his own dishonest actions, either frustrate or substantially obstruct execution of the ruling by, for example, removing or concealing his assets.

Personal arrest, i.e. arrest of the debtor himself, is also intended to prevent him from removing any of the available attachable assets and chattels. However, this may only be ordered if the required level of security for the creditor cannot be obtained by means of preventive annex of property.

An interim injunction has the effect of defining and maintaining a particular temporary legal situation. Its purpose is to prevent the current situation from changing and thereby frustrating or substantially obstructing the realisation of the rights of a party. An injunction rules on claims for delivery or for temporary acceptance or realisation of a particular action (sections 935, 938, 940 ZPO). The regulations applying to interim injunctions are essentially those applying to arrest and annex(section 936 ZPO).

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The grounds and the entitlement to arrest or annex do not need to be proved, but sufficient evidence does need to be provided (section 920(2) ZPO). The same applies for the delivery of an interim injunction (section 936 ZPO).

A crucial factor for consideration in the delivery of such precautionary measures is the ‘urgency’. The creditor must satisfy the court that rapid action is the only means of safeguarding the situation because there is an immediate risk of violation of his rights.

3. Object and Nature of these Measures

3.1. What types of assets can be subject to such measures?

The precautionary measures cover any assets which are subject to compulsory execution.

3.2. What are the effects of such measures?

The arrest or annex has the effect of seizure whereby both debtors and third party debtors lose their rights of disposal over the seized assets.

The seizure is safeguarded by the regulation contained in section 136 of the German Criminal Code [StGB] – breach of attachment. Breaches can also give rise to claims for damages under civil law.

In instances of arrest or attachment, section 945 ZPO lays down that there is also duty to pay compensation incumbent on the party who had applied for the order if it proves that there had been from the beginning no grounds for the arrest or annex order or the interim injunction or if the ruling is reversed on the strength of section 936(2) or section 942(3) ZPO.

The creditor may, within one month, apply for enforcement of the arrest or annex order or the interim injunction. In essence, the general regulations concerning compulsory execution (sections 928, 936 ZPO) apply here. In preventive attachment, enforcement is by means of seizure (section 930 ZPO) and in personal arrest of the debtor this is generally by issue of a warrant for arrest (section 933 ZPO).

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The following applies to interim injunctions: The bailiff carries out the order to remove property in accordance with section 883 ZPO. Orders enforcing the commission or omission of certain acts are issued under section 887 ZPO (empowerment by the court for the creditor to undertake some reasonable action) or under sections 888, 890 ZPO (order concerning penalty payments/ detention or fines/custody for forbearance from unreasonable actions or omissions and temporary acceptance).

Where annex applies to bank balances, a particular procedure applies, namely that in accordance with section 835(3) ZPO, the attached bank balance of a debtor who is a natural person cannot be paid to the creditor from the balance until two weeks have elapsed after service of the transfer order to the third party debtor. This procedure gives the debtor the opportunity to make an application for exemption from annex before the balance is paid out to the execution creditor.

3.3. What is the validity of such measures?
Does the law lay down any time limits or does the court decision specify a fixed period of validity?

Enforcement of the arrest or annex order or of the interim injunction is inadmissible if one month has elapsed since the date of delivery or service of the ruling.

Is the measure valid until the time the court makes its ruling or until another measure is delivered?

The measures are valid for as long as the grounds for the precautions or the interim nature of the circumstances exist.

If a measure has been ordered originally on application by only one party, is there a time limit to allow both parties to be heard?

The arrest/annex procedure does not necessarily require that both parties be heard (section 922 ZPO). If the debtor lodges an appeal, an oral hearing must take place (section 924 ZPO). There must always be an oral hearing if the application is for delivery of an interim injunction. This can be dispensed with only in urgent cases or on dismissal of an application (section 937 ZPO paragraph 2 ZPO).

There are no time limits regarding hearings for the parties involved.

4. Is there a possibility of appeal against the measure?

The court’s order for arrest/annex or an interim injunction can be made by means of a final ruling (after an oral hearing) or by a decision (sections 922, 936 ZPO).

The parties can appeal against the ruling if they are liable to pay more than Euro 600.

The following applies to delivery of a decision:

The debtor can lodge an appeal against the arrest/annex or interim injunction decision (section 924 ZPO). An oral hearing is then called to deliver a final ruling on the legitimacy of the measure.

If the application is dismissed, the creditor can lodge an immediate appeal within two weeks of service of the dismissal decision. The same applies if the decision is for arrest/annex or an interim injunction whilst at the same time requiring that the creditor pay a security.

In addition, the debtor can apply for the arrest/annex order or interim injunction to be set aside because the creditor has failed to assert his claim within the prescribed time limit (section 926 ZPO) or because circumstances have changed (section 927 ZPO).

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Last update: 09-06-2006

 
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