Provisional attachment, sometimes referred to as 'arrest', is a remedy or protective measure that seizes property (including bank accounts and accounts receivable) to ensure satisfaction of a later judgment by the courts. Provisional attachment immobilizes or freezes the attached assets as the debtor is deprived of his right to dispose of or encumber the assets.
Provisional attachment is frequently used as leverage in civil conflicts. By attaching assets, a creditor clearly demonstrates his willingness to pursue his rights against the debtor, while leaving ample room for an amicable settlement. The attachment of assets such as bank accounts, receivables and stock effectively paralyzes a debtor company, thus forcing attention to outstanding claims of a creditor.
Typically the debtor only learns of the provisional attachments after the fact. The surprise of discovering that one's assets are frozen is often the most effective aspect of a provisional attachment. As a result, a creditor should not threaten to request such measures, lest a debtor would take action to hide assets.
Assets that can be attached
Some examples of assets that are subject to provisional attachment are:
Almost anything that belongs to the debtor can be the subject of provisional attachment. However, it is not necessary for the assets to be in possession of the debtor. It is possible to attach assets that are held by a third party. For example, if the debtor has sold products to a customer and the customer owes money to the debtor, the debt can be attached. The effect is that this customer will not be able to pay off the debt until such time as the court has decided whether or not the creditor is entitled to collect the receivable instead.
How it works
The procedure to obtain permission for provisional attachment is straightforward, fast and generally dealt with ex-parte.
If the creditor is unaware of which bank is used by the debtor, where he has real estate or keeps goods, a preliminary investigation should be conducted to determine the nature and location of the debtor's assets.
Provisional attachment is a limited right and typically does not entail taking any goods into custody, as this would cause storage costs and risk of loss of the goods by the creditor. Additionally, goods or receivables that have been provisionally attached do not become immediately available for use by the creditor.
It is important to note that permission for provisional attachment is always subject to starting legal proceedings on the merits of the claim within 14 to 30 days of the attachment. Such proceedings typically take between 6 and 24 months. If at the end of such proceedings the creditor obtains a favorable judgment, the attached assets may be sold by the creditor to obtain payment for the debt.
The main costs and fees associated with provisional attachment in the Netherlands are:
The above do not include possible other case specific expenses such as custodial fees (as custody is typically neither necessary nor desirable), document translations fees and costs to investigate the location and availability of assets that can be attached. In exceptional circumstances, a court may require a creditor from outside the European Union to post a bond confirming his financial fitness prior to granting permission for a provisional attachment.
Although the vast majority of petitions for provisional attachment are granted by the courts, the court does have discretion to withhold its approval. In such case no refunds will be made of expenses incurred (which will in any case include court fees and fees of ABLD).
The main risks associated with provisional attachment are: