The European account preservation order
Creditors can now attach debtors’ bank accounts under uniform rules across all EU member states.
Changes in civil procedure
Under the act of 15 December 2016, which entered into force on 18 January 2017, Title XI, governing the European account preservation order, was added to Part Five of Poland’s Civil Procedure Code, covering international civil procedure.
The amendment to Polish civil procedure is designed to enable application of Regulation (EU) No 655/2014 of the European Parliament and of the Council of 15 May 2014 establishing a European Account Preservation Order procedure to facilitate cross-border debt recovery in civil and commercial matters, which also entered into force on 18 January 2017.
Below we describe the key rules introduced by Regulation 655/2014.
Subject of regulation
Regulation 655/2014 establishes a Union-wide procedure enabling a creditor to obtain an account preservation order. Such an order is supposed to prevent a situation where subsequent enforcement of the creditor’s claim is jeopardised by disposal, transfer or withdrawal of funds held by or on behalf of a debtor in a bank account in a member state, up to the amount specified in the order.
The European account preservation order is an alternative to protective measures provided for in national law.
Scope of application
The regulation generally applies to monetary claims in cross-border civil and commercial cases, regardless of the type of court or tribunal.
A cross-border case is defined in the regulation as one in which the bank account or accounts to be covered by the preservation order are maintained in a member state other than the one considering the application for the preservation order or the member state where the creditor is domiciled.
Procedure for obtaining preservation order
The creditor may obtain a preservation order before the creditor initiates proceedings in a member state against the debtor on the substance of the matter, or at any stage during such proceedings up until issuance of a judgment or approval or conclusion of a court settlement. A preservation order may also be issued after the creditor has obtained in a member state a judgment, court settlement or authentic instrument which requires the debtor to pay the creditor’s claim.
Application for preservation order
An application for a preservation order is filed on the relevant form using any means of communications, including electronic communications, accepted in the procedural regulations of the member state where the application is filed.
The court where the application for a preservation order is filed will examine whether the conditions and requirements set forth in the regulation have been met. The court must then decide the application promptly, within the deadlines specified in the regulation.
The debtor is not notified that an application for a preservation order has been filed and has no opportunity to be heard before issuance of the order.
Conditions for issuance of preservation order
The court shall issue the preservation order when the creditor has submitted sufficient evidence to satisfy the court that there is an urgent need for a protective measure in the form of a preservation order because there is a real risk that, without such a measure, the subsequent enforcement of the creditor’s claim against the debtor will be impeded or made substantially more difficult.
Where the creditor has not yet obtained in a member state a judgment, court settlement or authentic instrument requiring the debtor to pay the creditor’s claim, the creditor shall also submit sufficient evidence to satisfy the court that it is likely to succeed on the substance of its claim against the debtor.
The creditor will be notified of the decision on the application in accordance with the procedure provided for by the law of the member state of issuance for equivalent national orders.
Recognition and enforcement
A preservation order issued in one member state shall be recognised in other member states without any special procedure being required and shall be enforceable in other member states without the need for a declaration of enforceability.
Generally, a preservation order will be enforced in accordance with the procedures applicable to the enforcement of equivalent national orders in the member state of enforcement.
Easier pursuit of cross-border claims
The institution of the European account preservation order should make it much easier to pursue and enforce cross-border claims. Blocking the funds in the debtor’s bank account should significantly increase the odds of satisfying claims in cross-border disputes in civil and commercial cases. Automatic recognition and enforcement of such orders in other EU member states should also reduce the time required for enforcement of claims.
Marcin Płoński, Dispute Resolution & Arbitration practice, Wardyński & Partners