Luxembourg - Attachment of Assets
Thomas Berger, Avocat à la Cour, Allen & Overy Luxembourg
Originally from Attachment of Assets
1. What is the general nature and effect of judicial measures available for plaintiffs to obtain provisional relief affecting property of debtors to obtain security for judgments to be obtained (“attachments”)? Freezing property in place? Placing it in the custody of a third party, such as a court official, sheriff or marshall?
Luxembourg law provides for a number of conservatory arrest proceedings with respect to a debtor’s assets located in Luxembourg. In practice, the ones initiated most often are third party attachment proceedings.
Third party attachment proceedings (saisie-arrêt – article 693 of the New Code of Civil Procedure) are proceedings whereby a creditor (the attaching party) requests the blocking of certain amounts or assets owed by a third party (the attached third party) to its debtor, and whereby the creditor ultimately seeks to obtain delivery of those amounts or assets. Once the attachment has been served on the third party, the latter is no longer authorised to allow the debtor or any third party to dispose of the attached funds or assets.
Another kind of proceeding generally available under Luxembourg law is the conservatory commercial arrest (saisie conservatoire commerciale ¬– article 550 of the New Code of Civil Procedure). This type of proceeding may be initiated against “commercial” parties (including companies) and allows a creditor to seize assets owned by its debtor and located in Luxembourg. In order to resort to this type of proceeding, the creditor must prove that the recovery of its debt is seriously at risk.
In addition, from 18 January 2017, Regulation (EC) no 655/2014 (the EAPO Regulation) has established a European account preservation order (EAPO), enabling claimants to freeze funds in a defendant’s bank account(s) across the EU Member States bound by the EAPO Regulation (i.e. all EU Member States except the U.K. and Denmark).