Attachment of a foreign bank account or foreign goods within the European Union: a complete overview

It can be necessary in the complex world of international legal disputes to proceed with attachment of a foreign bank account or goods of a debtor who is situated abroad. The European Union (EU) offers specific mechanisms to creditors to make this process easier. This article offers an in-depth overview of the options and considerations for levying attachment of a foreign bank account within the EU.

The Dutch court and attachment of foreign bank accounts

The Dutch court can be requested to levy attachment of a foreign bank account in the EU or goods situated in the EU. See for example this case from 2015 during which attachment was levied for the surrender of a boat situated in Germany or Austria (the debtor was the owner of this boat). In another case from 2019 – still before Brexit – permission was granted by a Dutch court for levying attachment of the machinery and equipment in business premises in London and of an English bank account. However, such an attachment requires that the Dutch decision can also be enforced abroad, which can entail an extra complication. For example in the case from 2019 permission from the English court still had to be obtained, which took one month.

Disadvantage: reporting attachment in advance

A considerable disadvantage of cross-border attachment is that the Dutch decision must be reported in advance to the debtor (see the case from 2019, legal ground 4.14). This is on the basis of European Regulations. This can undo the surprise effect and reduce the effectiveness of the attachment. It is sometimes possible to let the attachment take place immediately after this notification, but this will depend on the legal system of the country where the attachment will be levied.

European bank account attachment

An alternative route for levying attachment of a foreign bank account is the European bank account attachment, which can also be requested at the Dutch court. This does not have to be reported to the debtor. However, this has disadvantage vis-à-vis a Dutch attachment:

1. More onerous criterion: the creditor must ensure that he has provided ‘sufficient evidence to convince the court that there is an urgent need for a precautionary measure in the form of a prejudgment attachment order, having regard to the real risk that, without such a measure the later collection of the claim of the creditor against the debtor will be made impossible or more difficult’ (article 7 Regulation).
2. Risk of recovery: the real risk must be that the debtor, at the time when the creditor can let the existing or a future decision be enforced, will have squandered, hidden or destroyed his assets The assets of a Dutch company reflect the value of all that the company possesses
   » Meer over assets assets, or will have disposed thereof below value, to an unusual extent or by means of unusual acts (recital no. 14 Regulation). The creditor must also be able to demonstrate that he will probably win the proceedings against the debtor.
3. Security: the creditor must in principle provide security (for example by means of a bank guarantee). Only in exception cases no security needs to be provided. For instance, the Gelderland court was not convinced in 2018: ‘Special convincing evidence that the claim will be granted on the merits was therefore not provided. Making an exception from requiring security is not on the agenda. The court in preliminary relief proceedings deems a higher amount of security more suitable than the applicant can offer. The application must be dismissed.’

Vicarious liability on the part of the creditor

Attachment by a creditor entails a (considerable) risk if the case against the debtor is ultimately lost. The fact is that liability is certain when the attachment lapses because the claim of the attaching party is dismissed. An unlawful attachment results in the obligation on the part of the creditor to compensate the debtor for all financial loss suffered due to the attachment and all the other disadvantages, according to the Supreme Court. This concerns vicarious liability, so that culpability on the part of a creditor is not required and it is irrelevant whether at that time the creditor believed on good grounds to have a claim against the debtor. The damage caused by the attachment therefore must be compensated in principle, see for example this case from 2019 at the Rotterdam court (legal ground 4.2).

Preliminary relief proceedings for the lifting of an attachment in the Netherlands or abroad

The debtor can – if the creditor obtains permission from the Dutch court to levy attachment and the attachment is effective – institute preliminary relief proceedings for the lifting of an attachment. This also happened in the case referred to from 2019. In such preliminary relief proceedings the mutual interests of the creditor (security) and debtor (for example large consequences for his business) will be balanced against each other. If the court finds in favour of the debtor the creditor must lift the attachment.

If the creditor levies attachment abroad, it is also possible that the debtor goes to the foreign court to lift the levied attachment there. In that case the creditor must take into consideration that he might become involved abroad in preliminary relief proceedings for the lifting of an attachment and that he must engage a foreign lawyer for this.

Questions?

Do you want to levy attachment of a foreign bank account or foreign goods? Then please contact Lennard Noordzij, lawyer specialised in international dispute resolution.