Attachments Abroad II - Part 2 Chapter 3 - The Practice of International Litigation - 2nd Edition
Lawrence W. Newman has been a partner in the New York office of Baker & McKenzie since 1971, when, together with the late Professor Henry deVries, he founded the litigation department in that office. He is the author/editor of 4 works on international litigation/arbitration.
Michael Burrows, Formerly, Of Counsel, Baker & McKenzie, New York.
This chapter is the second part of a two-part discussion which begins with the preceding chapter. In the first part, we dealt with the bases for obtaining prejudgment attachment in countries outside the United States, including the showing required of plaintiffs and the sometimes heavy burden of security imposed by the court of many jurisdictions. This chapter considers certain aspects of the consequences of obtaining an attachment outside the United States, in particular, obtaining information from garnishees about assets attached, priorities among competing creditors and the bases on which attachment may be vacated.
The extent to which an attachment may be worth the time and expense required depends, in significant part, on what the attaching plaintiff obtains as a result of the attachment. If a plaintiff is able to obtain a lien that is superior to the rights asserted by creditors who may come later, he will be willing to expend more effort than he would if the best he can obtain is a right that is subject to later defeasance by other claimants against the same assets.
In New York, once an order of attachment is served, the garnishee, frequently a bank, is obliged to report what assets are affected by the order. This information is made available to the plaintiff, who may also, when there are numerous creditors seeking security, obtain information as to where his attachment stands in relation to attachments and other liens obtained by others, including the amounts of those other liens.
The plaintiff is in quite a different position in many jurisdictions outside the United States. In Switzerland, for example, banks—the most likely garnishees—generally refuse to reveal what, if anything, was attached. The banks have taken a position that their obligation of confidentiality regarding bank accounts would be too easily breached if they made disclosure to everyone who obtains an attachment. A bank that has its own claim against the attached assets must, however, make disclosure to the bankruptcy office or risk losing its right against the assets. In Geneva, many banks often telephone the plaintiff or his lawyer to pass on information regarding any assets attached. The practice in Luxembourg, another haven of bank secrecy, is similar; plaintiffs' counsel may find out from the banks only informally if they have succeeded in attaching anything of value. Under the law in the Netherlands, the plaintiff only finds out what he has attached at the completion of the hearing on the merits, when he is about to enforce his judgment against what he has attached. What apparently is a problem of proceeding in the dark without knowing whether there are assets against which a judgment is enforceable may, in Dutch practice, be alleviated with the assistance of skilled counsel, through informal disclosures of information.
In other countries, disclosure is obtained by the parties directly or through the courts. Thus, in Belgium and Germany, the garnishee must provide to the plaintiff, within two weeks of service of the attachment order, information concerning the nature of the assets attached and other attachments against the same property. In such countries as Brazil, France, Italy, Japan, Korea and the Philippines, disclosure is made to the court or a court official, either on application by the plaintiff, or as a matter of course. The information so provided is ordinarily available to the plaintiff.