New European seizing proceedings – Part II
By Johan F. Langelaar & Michiel Teekens, TeekensKarstens
The Proposal for a Procedure of the European Parliament and the Council in creating a European Account Preservation Order to facilitate cross-border debt recovery in civil and commercial matters (COM, 2011, 445 final). This proposal contains a new and independent procedure for (international) European seizing proceedings related to bank accounts.
The proposal contains proceedings in which the authorised court – or in some circumstances even a bailiff – can invoke a European Account Preservation Order (“EAPO”) which leads directly to seizing bank account assets in the specific Member State(s).
It is felt that creditors seeking recovery of debts in Member States other than their own face significant difficulties. Executing provisional measures in those other Member States is difficult, time consuming and costly. This is a problem because the quick and easy access to such provisional measures is often crucial in ensuring that the debtor has not removed or dissipated their assets by the time the creditor has obtained and enforced a judgment.
The proposal states four main shortcomings:
1. the conditions for issuing orders preserving assets in bank accounts under national law vary considerably throughout the European Union, which makes it more difficult for creditors to obtain an account preservation order in some Member States than in others, including the problem that ex parte court grants are not recognised by other Member States;
2. in many Member States it is difficult, if not impossible, for a creditor to obtain information on the whereabouts of their debtor’s bank account without having recourse to the services of private investigation agencies;
3. the costs of obtaining and enforcing an account preservation order in a cross-border situation are generally higher than in domestic cases;
4. national enforcement systems differ in effectiveness.
The proposal establishes a new and self-standing European procedure for the preservation of bank accounts which will enable a creditor to prevent the transfer or withdrawal of their debtor’s assets in any bank account located in the European Union. The European procedure will be available to citizens and companies as an alternative to remedies existing under national law. The proposal sets out the EAPO proceeding, as well as the implementation thereof by the bank(s) of the holding account(s) targeted. The EAPO proceeding can be instigated before and after obtaining an enforceable title.
As a general rule, the courts of the Member State having jurisdiction on the substance as determined by European instruments or national laws that are competent to issue the EAPO. The order can be issued by the courts of the Member State where the account is located.
The proceeding in obtaining the EAPO is in line with the general approach of the majority of Member States. The creditor has to show that they have a good prospect of winning the case on the substance and that there is the risk that the enforcement of a subsequent judgment would be frustrated if the measure is not granted. The EAPO will – in most cases - be an ex parte proceeding, safeguarding the “surprise effect” of the preservation measure.
The proposal also obliges Member States to provide for a mechanism facilitating the obtaining of information about the debtor’s account(s). There are two choices: Member States can provide for an order of disclosure obliging all banks in their territory to disclose whether the debtor has an account with them or they can grant their enforcement authorities access to information held by public authorities in registers or otherwise.
Set course European seizing proceedings
The general course is set. Europe is developing new tools for efficient seizing proceedings abroad executed in other Member States, including a whole new system for seizing bank accounts and by taking care of the exequatur proceeding and allowing ex parte seizing grants to be enforced with the European Union. The effectiveness of these new instruments will depend on their final outcome and on the cooperation of the Member States. However the course is set for an interesting time in international debt collection.
Johan Langelaar, attorney at law
TeekensKarstens advocaten notarisen, the Netherlands
T: +31 71 - 535 81 08
Michiel Teekens, attorney at law
TeekensKarstens advocaten notarisen, the Netherlands
T: +31 71 - 535 80 38
Johan Langelaar is a partner at TK and manages international affairs. He specialises in (international) commercial and business law, litigation and arbitration, as well as being an arbiter himself. Johan Langelaar is Global Chairperson of the International Dispute Resolution Practice Group and an active participant in the Debt Collection & Restructuring Practice Group.
Michiel Teekens is an (international) corporate and commercial litigator and active GGI participant at the GGI EasyMeets. He is also a member of the International Dispute Resolution Practice Group. Furthermore, through GGI he participated in the Global Village on the Move 2012 programme.
TeekensKarstens attorneys and notaries (TK) is the largest legal services provider in the Rijnland area of the Netherlands, which is centrally located between Amsterdam, The Hague and Utrecht, and just fifteen minutes from Amsterdam Schiphol Airport. From its offices in Leiden and Alphen aan den Rijn, more than fifty lawyers and (candidate) notaries operate and provide full services to predominantly large and medium enterprises, (semi-)public sector companies and individuals hailing from the Netherlands and beyond.
published: October 2014