Paraguay - Attachment of Assets
Theodore Stimson, Vouga & Olmedo
Rodolfo G. Vouga, Vouga Abogados
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?
An attachment is an exceptional restriction to the debtor’s fundamental right to freely dispose of his assets. The justification for such a restriction is the need to guarantee the creditor’s fundamental right to an effective protection by the Court. An attachment, therefore, involves the use of coercion where the legal system must protect both the property of the creditor and that of debtor. Because of this, an attachment is required to apply selectively and reasonably, only to assets identified as sufficient to secure satisfaction of an expected judgment for the attaching creditor, without unduly encroaching on the debtor’s economic autonomy or causing unwarranted harm.
2. What is the form of the attachment? Injunction? Other kind of judicial order? Specify.
The form of the attachment is that of an injunction on unspecified assets of the debtor, up to an amount sufficient to secure the expected judgment. That amount is written on the judicial order, and is composed of the amount of the claim, legal fees, judicial expenses, costs, and interest. If assets are identified pursuant to the injunction, assets are attached within the limits of the amount expressed on the attachment order.
3. What is the jurisdictional basis for an attachment? Is the presence of the debtor’s property a sufficient basis for an attachment to be obtained, assuming other requirements are satisfied? To what extent may attachments be used as a basis for obtaining personal jurisdiction over a debtor? To what extent are attachments or similar orders intended to have extraterritorial effect?
The jurisdictional basis for issuing an attachment is the existence of legal action against the debtor in Paraguay. The satisfaction of any of the following elements of connection shall establish jurisdiction of Paraguayan Courts: place of enforcement of the contract, the legal domicile of the debtor, or the place where the contract was entered into.