Provisional Measures (Including Attachment).
a. Types of Provisional Measures.
The CPC (Art. 140) and APC (Art. 91) introduce a list of so-called “provisional” or “interim relief” measures designed to prevent concealment of assets by the defendant after initiation of legal proceedings directed against it and to secure enforcement of future judgment. These provisional measures under CPC are:
• attachment of the property or of the monetary assets, belonging to the defendant, whether in possession of the defendant or of third parties;
• prohibition for the defendant to perform certain actions (restraining order);
• prohibition for other persons to perform certain actions, related to the object of the dispute and also the prohibition of other persons to transfer property to the defendant or to fulfill other obligations to his benefit (restraining order);
• suspension of collection under the enforceable document challenged by the debtor in judicial proceedings; and
• suspension of sale of property if an action for its release from attachment is instituted.
The APC describes provisional measures in somewhat different language but with the same general meaning. Both lists are not exhaustive.
Attachment (seizure) of the property or monetary assets, in particular bank accounts, is by far the most common measure of providing for the claim. Property under attachment may not be pledged, sold, granted, leased, destroyed etc. However, it may be utilized as long as such utilization does not lead to destruction of deterioration of value of the property.
b. Property Not Subject to Attachment.
The legislation does not specially provide for the list of property exempt from attachment. However, attachment may not apply to property exempt from execution, because these claims may not be satisfied at the cost of such property. The list of property of individuals exempt from execution is provided for in Art. 446 of the CPC (see chapter 18 (f) above for more details).
c. Types of Claims that are Basis for Attachment.
There are no special rules regarding categories of claims that may be secured by attachment or temporary restraining order. It is oblivious that two other categories of provisional measures may only be granted in the context of specific proceedings: suspension of collection under the enforceable document may only be order where the debtor challenges the enforceable document or judicial act under which it was issued; suspension of judicial sale of property is only possible in an action for release of this property from attachment.
When deciding whether the attachment shall be granted, a judge considers the balance of interests and hardships of a debtor and creditor. In particular, the judge decides whether the claim was persuasively motivated by the plaintiff and whether there is likelihood that the failure to grant provisional measures will hinder enforcement of a judgment. If the claim is denied, the plaintiff is required to compensate damages caused by provisional measures to the defendant. For this reason where a motion for provisional measures is granted, the court may order the plaintiff to post a security to indemnify the defendant against such damages.
d. Procedure for Provisional Measures.
Provisional measures are granted (or denied) by the interim order of the court made after the motion of a party. The Arbitrazh Procedure Code specifies that a judge must rule on the motion for provisional measures at the latest the next day after the motion is filed. Such interim orders are granted by the judge without formal hearing.
The new APC provides for the pre-suit provisional measures (Art. 99). It means that the claimant can seize the assets or stop the infringement without need of filing and serving the claim upon the defendant. In a ruling granting a motion for such measures the judge must indicate the deadline for filing the claim on the substance (not more than 15 days). Counter-security is mandatory for pre-suit measures.
Interim orders for provisional measures become effective immediately and may be enforced in the same way as court judgments. Petitions challenging the provisional measures do not automatically render them void or ineffective. The attachment may be lifted or modified by the court only in the hearing. The parties shall be notified about the time and place of the hearing, but their failure to attend does not prevent to examination of the issue.
The procedure of attachment is governed by the APC, the CPC and the law On Execution Procedure. A bailiff executing an interim order of an attachment makes inventory of the property subject to attachment and declares that conveyance of this property is prohibited. Where necessary the bailiff may also take measures to limitation of the right to utilize the property, seize it from possession of the current holder and transfer to a custodian for storage. A special procedure of attachment of commercial papers and securities was promulgated by the decree of the RF Government of 12 August 1998 No. 934.
Attachment to facilitate execution of the judgment which entered the legal force is performed in a similar manner. Bailiffs may seize and confiscate property of the debtor, including property of the debtor held by other persons, attach salaries, pensions or other income, as well as monetary claims of the debtor. This procedure is discussed in more detail in the chapter “Writs of Execution”, infra.