A petition is only marginally examined

How easily can one obtain permission to freeze assets? The Curaçao Code of Civil Procedure provides the possibility to seize and freeze assets in anticipation of a court order to pay a certain amount or to return certain goods. This legal remedy is referred to as prejudgment attachment or seizure (“conservatoir beslag“).

In general, a petition for the attachment of assets is (more or less) only marginally examined by the court and will therefore be granted in most cases. The claimant must then submit a writ of summons or claim form to the court, within eight days from the date of the attachment being levied or within a period otherwise determined by the court. Said writ must contain the claim for which the attachment was made as surety, unless the claim itself is brought before a foreign court or an arbitral tribunal.

What is the difference between a judge granting permission to freeze assets and a judgment on the merits? There is a difference between a judge granting permission to attach (freeze) certain assets and a judgment based on regular proceedings (including the filing of statements and discussion by all parties concerned). In general, a petition for an attachment of assets is only marginally examined by the court and therefore in most cases will be granted as such.

In many cases, the opposing party will not be aware of such a petition and will thus not be in a position respond in kind to the court. In most cases, the attachment will be granted based only on what the petitioner has brought forward in its petition. In other words, if the petitioner’s request be granted, this is because the claim appeared justified on a prima facie basis.

The fact that permission to freeze assets is given by the court does in no way prejudice the outcome of any proceedings on the merits. The court ruling on the merits is on no way bound by the fact that seizure was granted.

What defense is there against a (request for permission for a) prejudgment attachment? As discussed above, the permission to freeze assets may be obtained without the counterparty being informed thereof. It is not a requirement that the counterparty be served such a petition. If one is expecting a party to file for attachment, one may write to the court asking to be heard prior to a decision being taken. The same criteria will then apply as in preliminary relief proceedings with respect to whether or not the attachment will be granted; which will be discussed below.

Once the petition has been granted and assets have been frozen, one could consider initiating preliminary relief proceedings as an attempt to get the attachment lifted. Several issues need to be discussed in this respect. First of all, does the attachment really hurt you or hinder you in doing business, in other words, have assets that you actually need been attached? It may for instance not bother you that the petitioner has put your office building under attachment. Please note that such hinder and damage do not generally constitute a reason for lifting the attachment.

Secondly, assuming that you will not opt for providing sufficient collateral (i.e. a bank guarantee), which will generally constitute a reason for lifting the attachment, do you actually believe that you can convince the court that the petitioner’s claim is without any merits whatsoever, i.e. that such claim has not a single arguable basis? It is up to you to prove that the petitioner’s claim is obviously unfounded. However, the more complicated a case is, the more difficult it will be to prove this.

On the other hand, the worst case scenario if you were to initiate preliminary relief proceedings is that you might lose the case, which as such will not prejudice any ruling in further main proceedings. If you should decide to initiate preliminary relief proceedings you should carefully prepare your petition and attach as much evidence as possible.

Karel Frielink
Attorney (Lawyer) / Partner

(28 June 2013)

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