Pre-judgment attachments in the Netherlands

Compared to other jurisdictions, getting a pre-judgment attachment on assets in the Netherlands is shockingly easy. Foreign companies are often surprised to learn that a pre-judgment attachment can be obtained within one or two days, without so much as a hearing. As a result, pre-judgment attachments are a popular and frequently used measure to pressure debtors and to secure recourse for creditors’ claims.

What types of assets can be attached?
In principle all assets of the debtor located in the Netherlands may be attached, e.g. inventory, bank accounts, shares, intellectual property, vehicles, real estate, etc. The debtor does not have to be a Dutch entity. Also assets in the Netherlands owned by a foreign debtor may be attached, with the added advantage that the attachment can create jurisdiction of the Dutch courts if the creditor cannot obtain a judgement enforceable on the attached assets elsewhere.

What is the procedure?
In order to be able to levy a pre-judgment attachment, a request for leave for a pre-judgment attachment must be filed with the competent Dutch Court (Section 700 of the DCCP). The jurisdiction of the court may be based on either the location of the assets, the debtor’s domicile, or, in the case of a third party attachment, the domicile of the third party.

What should be included in the request?
Any party with an apparently justified claim may request the interim relief court to give permission for the pre-judgment attachment. The request needs to contain the following elements:

1. the nature of the attachments to be made;
2. the basis of the underlying claim;
3. the estimated amount of the underlying claim;
4. a specification of the assets concerned;
5. whether proceedings on the merits have commenced; and
6. for the attachment of movable or immovable property, intellectual property and shares in the Dutch company, a creditor must evidence that there is fear of embezzlement of the assets. There is, however, not a high burden of proof. It is usually sufficient if a party states that there is a justified claim, the debtor does not pay its debts and that the debtor does not offer sufficient recourse.

Prima facie test
Courts apply a prima facie test (with no hearing) to the claim put forward by the creditor. The debtor is not notified of the request and no hearing is held. In practice, requests for a leave for attachment are almost always granted. Generally, the leave is granted within 1-2 days after the filing of the petition. As soon as the leave is granted, the bailiff may freeze the assets specified in the leave. The leave is granted on the condition that the creditor’s claim against the debtor is filed in formal proceedings within a certain period of time (usually 14 days) after the (first) attachment is made. If no claim in formal proceedings has been filed within the set timeframe, the attachment is cancelled by operation of law.

Debtor’s relief
While it is easy for the creditor to levy an attachment, it is left to the debtor to seek relief from any attachment he feels was levied unjustly. The simplest way to have an attachment lifted is to offer the creditor an alternative form of security for the payment of the (alleged) claim. This is often done in the form of a standard bank guarantee that has been developed for this purpose. If the debtor is not willing or able to provide security, the debtor may alternatively initiate interim relief proceedings to have the attachment(s) lifted. It is then up to the debtor to demonstrate that the claim of the creditor is evidently unfounded or that the attachment is disproportional.

Risk
While it is relatively easy for the creditor to levy an attachment, doing so frivolously is not without risk. The creditor who levies an attachment is liable for any damages caused by the attachment if the creditor’s claim is held to be without merit.

Pre-judgment attachments are often used for securing recourse on debtors and often result in the debtor willing to negotiate an out of court settlement. Therefore, if you have a claim against a debtor owning assets in the Netherlands, a pre-judgement is certainly worth considering. We at Buren N.V. are most willing to discuss the possibilities of pre-judgment attachments and other legal steps with you.

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