The pre-judgment attachment under Dutch Law

Introduction
Under Dutch law, the assets of a debtor may be attached before court proceedings have even started. This pre-judgment attachment (“conservatoir beslag”) is used to obtain security for the recovery of a claim.

The attachment
All goods of the debtor may be attached, including receivables, movable and immovable goods and bank balances. An attachment on bank balances is, in practise, not only used for security but also builds up pressure, as it freezes the accounts. Therefore, the pre-judgment attachment is not only used for recovery and security purposes, but for pressure purposes as well as it forces the debtor to take immediate action in order to release the bank accounts. The debtor could pay the claim or issue a bankguarantee security in order to release the goods.

Procedure
In order to implement an attachment, a request for a leave for a pre-judgment attachment needs to be filed with the competent Dutch court. This is no different if the parties have agreed on  arbitration, instead of court proceedings. In that event, the request still needs to be filed with the competent court (not with the arbitration institute). Usually, obtaining leave is relatively easy, in most cases ‘ex-parte proceedings’ are followed, meaning that the defendant will not be heard by the judge before the leave is granted. After obtaining leave, main proceedings must be instigated within a certain period (usually 14 days) after receiving the leave (if the main proceedings were not yet instigated when requesting for leave for the pre-judgment attachment). In case parties agreed on arbitration, these proceedings are covered by the definition of main proceedings as well, so it is not necessary to instigate simultaneous court proceedings.

Appeal and summary proceedings
No appeal is permitted against the leave. However the debtor may start summary proceedings to have the attachment released. Dutch law describes the situations in which the attachment will be released, for instance if the claim does not exist or if the attachment does not serve a reasonable purpose for instance if here is no real doubt that the debtor will pay the claim after being ordered to do so in the judgment in the main proceedings.

Claim denied
If the Dutch courts deny the claim in the main proceedings, the attachment was, in hindsight, unjustified. In that event the creditor is, in principle, liable for the damages incurred as a result of the attachment.

Claim granted
If the claim in the main proceedings is granted, the pre-judgment attachment will automatically be converted into an executory attachment. The attached assets may then be executed and be used for recovery for the claim.

Conclusion
In summary, a pre-judgment attachment is a rather easy way to obtain recovery and security for a claim. Moreover, this attachment is well-used for pressure purposes. However, if the debtor goes bankrupt, the creditor will be left empty-handed. Also, please note that a liability risk applies if the claim is denied in the main proceedings.

Karin Harmsen