ICC FRAUDNETICC – FRAUDNETDevelopments in the new Swiss Codes of CivilDevelopments in the new Swiss Codes of Civil

and Criminal Procedure Affecting Fraud Recovery

Palliser Hotel Alberta RoomPalliser Hotel, Alberta Room133 – 9th Ave SW, Calgary, Alberta

Friday, October 1, 2010

Yves Klein, Monfrini Crettol & Associés, Geneva, SwitzerlandMichele Caratsch, Baldi & Caratsch, Zurich, Switzerland

Baldi & Caratsch, Zeltweg 44, CH- 8032 ZurichTel: +41 44 205 25 25 Fax: +41 44 205 25 00e-mail: mcaratsch@bclaw.ch

Monfrini Crettol & Associés, 3, place du Molard CH-1204 GenevaTel: +41 22 310 22 66, Fax: +41 22 310 24 86

e-mail: yklein@mcswisslaw.com

OverviewOverview1 General introduction: The New Federal Code of Civil Procedure and the1. General introduction: The New Federal Code of Civil Procedure and the

New Federal Code of Criminal Procedure

2. Principal aspects of the new Code of Criminal Procedure affecting Fraud2. Principal aspects of the new Code of Criminal Procedure affecting Fraud Recovery

3. New Code of Civil Procedure: changes affecting banking secrecy issues

4. Taking of evidence: "Discovery" in Swiss proceedings?

5 U f ill ll b i d id i S i i il di5. Use of illegally obtained evidence in Swiss civil proceedings

6. Conservatory Measures: the new grounds for attachment; new possibility of freezing state assets on the basis of an enforceable award under the newfreezing state assets on the basis of an enforceable award under the new Lugano Convention

From 27From 27…

In the 1874 Swiss constitution, both judicial organization and procedure were j g pwithin the competence of the 26 cantons, each of which had its own codes of civileach of which had its own codes of civil and of penal procedure. In addition, the Confederation also had its own codes ofConfederation also had its own codes of civil and of penal procedure, leading to t o the existence of 27 distinct sets of rules, more than in the whole European Union.p

to 1… to 1

On 8 October 1999 the FederalOn 8 October 1999, the Federal Constitution was amended, attributing the Confederation exclusive competence overConfederation exclusive competence over criminal and civil procedure (judicial

forganization and administration of justice remain within the competence of cantons).p )

Swiss Code of Civil ProcedurePrincipal characteristics:

a. Encouragement of mediation and conciliation; simplified proceedings for small cases (below CHF 30’000).

b E h t f thi d t i t tib. Enhancement of third party intervention.c. Investigation entirely conducted by the judge.d P t i d ti d t thi d tid. Power to issue production orders to third parties.e. Lifting of bank secrecy as the rule.f N di i l dif. No discovery or pre-trial discovery.g. No class action (judge may consolidate actions).

Swiss Code of Criminal ProcedurePrincipal characteristics:

a Prosecutor model: conducts both the investigation anda. Prosecutor model: conducts both the investigation and the prosecution (no more Investigating Magistrates).

b. Enhanced rights of the defence.gc. Enhanced rights of the victim.d. No jury.d. No jury.e. Possibility of default judgments.f. Plea bargaining through simplified procedure andf. Plea bargaining through simplified procedure and

sentencing orders.g. Since 2000, compulsory federal jurisdiction over money g , p y j y

laundering, corruption and organized crime, when mainly carried out abroad or in several cantons.

2. Aspects of the Swiss Code of pCriminal Procedure relevant for fra d ictimsfraud victims

InvestigationInvestigation

Prosecutor has the power (without court orders) to:)• interrogate witnesses

i d ti d ( b ki• issue production orders (no bankingsecrecy)

• issue freeze orders to guarantee forfeitureiss e MLAT letters of req ests• issue MLAT letters of requests

Freeze ordersFreeze orders

Freeze order issued to guarantee:• forfeiture of crime proceeds or

replacement assetsreplacement assets• not compensation of the victim’s damageFreeze orders may be generic and may takethe form of blanket orders in cases of organized crime & grand corruption

Forfeiture of assetsForfeiture of assetsCompulsory forfeiture of:Compulsory forfeiture of:• crime proceeds or assets intended to reward or bring

about an offenceabout an offence• when crime proceeds are no longer available, forfeiture

of replacement assets of the same owner (beneficialof replacement assets of the same owner (beneficial ownership test; no privilege towards other creditors)

• assets under the control of a criminal organization; gassets beneficially owned by persons who participated in or supported a criminal organization are presumed to be

t ll d b th i ti til f f th tcontrolled by the organization until proof of the contrary (either proof of lack of control or of legitimate origin)

Third parties protectionThird parties protectionThird parties are only protected fromThird parties are only protected from forfeiture if both:

i t f th i i i l i i– ignorant of their criminal origin; and

– provided adequate consideration for the assetsassets

Forfeiture may be waived if it would t i h d hi threpresent an excessive hardship on the

third party.

Forfeiture procedureForfeiture procedure

• Together with a conviction.• Non conviction based forfeiture:• Non conviction-based forfeiture:

compulsory when no trial takes place; forfeiture order issued by prosecutor; no other condition than proof of theno other condition than proof of the criminal origin of the assets and Swiss juridiction over the offences.

The plaintiffThe plaintiff

Upon declaration any individual or legalUpon declaration, any individual or legal entity whose rights were directly affected upon the commission of a crimeupon the commission of a crime.Not the shareholder or the assignee (rights limited to civil action in subrogation).

Plaintiff’s right to participate in the investigation:

• Right to consult the file and levy copy, granted at the latest when the suspect has been examined for the first time (may be limited to prevent abuses)time (may be limited to prevent abuses).

• Right to use evidence in domestic & foreign proceedings.Right to request freeze orders• Right to request freeze orders.

• Right to request investigative measures and participate in the examination of witnesses or suspectsin the examination of witnesses or suspects.

• Right to appeal against the prosecutor’s decision and to support the prosecutor’s decision in case of appeal bysupport the prosecutor s decision in case of appeal by the suspect or a third party.

Plaintiff’s right to sue for damages:

• Plaintiff has the right to sue the accused for damages before the criminal court. gCivil law (including level of proof) applies (court fee must only be paid at that stage)(court fee must only be paid at that stage).

• Plaintiff may support the prosecution in the criminal trial and reserve its right to sue before Swiss or foreign civil courts, using g gthe evidence obtained in the criminal proceedings.proceedings.

Plaintiff’s right to the allocation of the forfeited assets

• Article 73 of the Penal Code:If a felony or an offence has caused damage notIf a felony or an offence has caused damage not covered by insurance and if it must be presumed that the offender will not compensate it thethat the offender will not compensate it, the injured person is entitled to receive, upon request up to the amount of the damagesrequest, up to the amount of the damages established by a judgment or by agreement the forfeited assets the replacement assets and theforfeited assets, the replacement assets and the fines paid by the offender.

3. Changes affecting banking secrecyi th S i C d f Ci il P din the Swiss Code of Civil Procedure

Current situationCurrent situation

• Today most Swiss cantonal codes of civilToday, most Swiss cantonal codes of civil procedure do not allow production orders against third parties or the lifting of bankagainst third parties or the lifting of bank secrecy.

• Consequence: criminal proceedings are necessary to obtain evidence.necessary to obtain evidence.

General obligation to cooperateGeneral obligation to cooperate

• Article 160 SCCP introduces a general obligation for parties and third parties to g p pcooperate with the civil trial.

• In principle banking secrecy cannot be• In principle, banking secrecy cannot be opposed (contrary to attorney-client

f )confidentiality).• Consequence both on domestic and civilConsequence both on domestic and civil

mutual assistance proceedings.

Relative right of refusal:Relative right of refusal:

A 163 2 SCCPArt. 163 para. 2 SCCP: “[Parties] privy to other secrets that are protected by law can refuse to cooperate if they show that the interest in maintaining secrecy p y g yoverrides the interest in discovering the truth.”Consequence of unjustified refusal: taken into account when weighing evidence (art 164 SCPP)weighing evidence (art. 164 SCPP).

Art. 166 para. 2 SCCP: “Other persons aware of statutorily protected secrets can refuse p y pcooperation if they show prima facie that the interest in maintaining secrecy overrides the interest in discovering the truth.”Consequence of unjustified refusal: fine threat of imprisonmentConsequence of unjustified refusal: fine, threat of imprisonment, order compliance by force, costs (art. 167 SCPP).

Lifting of banking secrecy is the rule:Lifting of banking secrecy is the rule:

• Bank secrecy is lifted unless the party or• Bank secrecy is lifted unless the party or third party barred by secrecy law from di l i th i f ti d tdisclosing the information or document can show that there is an overriding interest to maintain secrecy.

• However banks have declared that they• However, banks have declared that they will systematically exert their right of

f l t k th t th h trefusal to make sure that they have a court decision protecting them from liability.

Consequence on domestic proceedings

• In the less complex cases criminalIn the less complex cases, criminal proceedings may no longer be necessary.

• Criminal proceedings still necessary for C a p oceed gs st ecessa y otransnational, complex cases.

Consequences on civil international judicial assistance

Requests for taking evidence sent to SwitzerlandRequests for taking evidence sent to Switzerland are governed by:

The Hague Convention of 18 March 1970 on the• The Hague Convention of 18 March 1970 on the Taking of Evidence Abroad in Civil or Commercial Matters (Swiss declaration underCommercial Matters (Swiss declaration under article 23: limitations on pretrial discovery)Th H C i l i i il• The Hague Convention relating to civil procedure of 1 March 1954 (applies also when th ti St t h t t iththe requesting State has no treaty with Switzerland)

Law applicable to the execution of the request:

• Today, requests are executed in accordance with the code of procedure of pthe canton of execution (art. 11 PILA).

• From 2011 on the Swiss Code of Civil• From 2011 on, the Swiss Code of Civil Procedure shall apply.

• By providing sufficient elements in the request, bank documents may be obtainedrequest, bank documents may be obtained in Switzerland (see 4A_399/2007).

Elements to provide in the request:Elements to provide in the request:

• Facts of the case sufficiently detailed to allow the Swiss court to effect a balance of interest between secrecy and truth.

• Specify which documents are requested• Specify which documents are requested (no discovery-like exploratory requests).

• Parties may participate in the examination of witnesses but not in the production ofof witnesses but not in the production of documents.

4 Taking of evidence:4. Taking of evidence: "Discovery" in Swiss proceedings?

Taking of evidence: "Discovery" in Swiss proceedings?

Ad i ibl t f id d A t 168 SCCP• Admissible types of evidence under Art. 168 SCCP:

(1) Witness evidence(1) Witness evidence(2) Documentary evidenceDocumentary evidence(3) Inspection by court(3) Inspection by court (4) Expert evidence(5) Written request by the court(5) Written request by the court(6) Parties’ interrogation by the court and testimony

under oath

Differences to common law systemDifferences to common law systemTh t f pre trial discovery th i f id i t th• The concept of pre-trial discovery or gathering of evidence prior to the trial by way of taking depositions of witnesses or mandatorily exchanging or producing documents is completely unknown and will continue to remain unknown under the new code of civil procedure.p

• Affidavits or witness statements filed by a party have no evidentiary value unless backed up by “live” evidence given in front of the court.

• Evidence is taken by the court after the parties have submitted in full, usually by exchange of written briefs, their allegations of facts. The court will take evidence on all of those facts which are either alleged or disputeddisputed.

• The administration of the evidence, including the questioning of the relevant witnesses, is reserved to the court. Parties' counsels may ask additional questions to any witnesses which are being questioned by the court, but this

l f h h d i i i d h i i 'only after the court has made its own enquiries and authorizes parties' counsels to proceed. NO concept of cross-examination.

Codified duty of the parties to produce documents

• Art. 160 sec. 1 (b) SCCP contains a general obligation for the parties and third parties to cooperate with the courts, including the duty to produce duty to produce documentsdocuments at the request of the court.q

• General guideline: IBA Rules on the Taking of Evidence in International Commercial Arbitration of 1999:

• Documents to be released must be in possession, custody or control of the party from which they are requestedparty from which they are requested

• The documents must be sufficiently identified by the requesting party – no fishing expedition

• Request must be formulated during the proceedings – no pre-trial discoveryq g p g p y• Order of production is issued by the Court – release of documents only to

the Court, not directly to the requesting party. • Side note: A defendant cannot be compelled by either the court or the

d t di l it t Di l f t fi ladversary to disclose its assets. Disclosure of assets presupposes a final judgment or enforcement document against the defendant, and is only possible within the framework of compulsory enforcement under the DCB.

Legal Privilege?Legal Privilege?• Art 160 sec 1(b) newly introduces the concept of legal privilege:• Art. 160 sec. 1(b) newly introduces the concept of legal privilege:

• NOT ONLY ATTORNEYS CAN REFUSE TO PRODUCE THEIR OWN PRIVILEGED DOCUMENTS BUT ALSO CLIENTS CANOWN PRIVILEGED DOCUMENTS, BUT ALSO CLIENTS CAN REFUSE TO PRODUCE COMMUNICATION WITH THEIR ATTORNEY WHICH IS PRIVILEGED.

• NOT PRIVILEGED IS:• Activity of a lawyer as member of the board of directors of a

company;company;• Activity of a lawyer when performing fiduciary services e.g. for

offshore entities• Activity of a lawyer as asset managerActivity of a lawyer as asset manager• In-house counsel of a corporation cannot invoke legal privilege!

Rights of Refusal of Parties and Witnesses

Ab l t d R l ti Ri ht f R f l f P ti dAbsolute and Relative Right of Refusal of Parties and Witnesses (Art. 163, 165, 166 SCCP)

• Witnesses or third parties holding documentary evidenceWitnesses or third parties holding documentary evidence may refuse to cooperate with the court to the extent that the disclosure of a business or other secret would be

i h bl t t ti l 321 f th P l C dpunishable pursuant to article 321 of the Penal Code. • The third party submitted to an obligation to report or

released from the obligation to keep the secret has areleased from the obligation to keep the secret has a duty to cooperate, unless it renders likely that the interest of the protection of secret is stronger than the i t t t th if t ti f t th ( t 166 1 binterest to the manifestation of truth (art. 166 para. 1 b SCCP).

Discovery without teethwithout teeth against parties (Art. 164 SCCP)

U j tifi d f l BY PARTY t d• Unjustified refusal BY PARTY to produce documents upon order of the Court

• Consequence: NO CRIMINAL PENALTY; NO• Consequence: NO CRIMINAL PENALTY; NO ENFORCEMENT OF THE COURT ORDER

• Art. 164 SCCP: The Court shall take (theArt. 164 SCCP: The Court shall take (the refusal) into account when weighing the evidence

• Example: Court, if satisfied that document is in possession of the party, shall assume that the document has those contents as described bydocument has those contents as described by the counterparty; also applies to documents which have been unjustifiedly destroyed.

Discovery with teethwith teeth against third parties (Art. 167 SCCP)

• Unjustified refusal by third party to produce documents upon order of the Court

Consequences: • Administrative fine of CHF 1‘000.—;Administrative fine of CHF 1 000. ;• Order of the court to comply with criminal

sanctions if failure to do so;sanctions if failure to do so;• Forceful enforcement of court;• Bearing of court cost resulting from the failure to

comply.

5. Use of illegally obtained evidence in S i i il diSwiss civil proceedings

Use of illegally obtained evidence in Swiss civil proceedings (Art. 152 sec. 2 SCCP)

• Art. 152 sec. 1 SCCP gives both parties the right to have all „suitable“ evidence g „timely submitted admitted and accepted by the courtthe court.

• Art. 152 sec. 2 introduces a right to have evidence illegally obtained considered by the court, to the extent that the interest in „finding the truth“ is predominant.

Balance of interest between „illegal act“ and „finding the truth“

J d h t b l th i t t• Judge has to balance the interests• Irrelevant, whether the breach committed to obtain the

evidence is being investigated or notevidence is being investigated or not• If illegal act led to a breach of the physical or

psychological integrity, then judge is unlikely to consider p y g g y j g yit

• If illegal act was a breach of an absolute or relative right to refuse giving evidence judge will weigh theseto refuse giving evidence – judge will weigh these interest very high.

• Open question: Private investigator obtains informationOpen question: Private investigator obtains information from Swiss banker in breach of banking secrecy laws: Can this information be used?

6. Conservatory measures;6. Conservatory measures;The new grounds for attachment; New possibility of freezing state assets on the basis of an enforceable assets o t e bas s o a e o ceab eaward under the new Lugano ConventionConvention

Conservatory MeasuresNew Safeguarding Measures under Art 261 SCCPNew Safeguarding Measures under Art. 261 SCCP

Safeguarding Measures under Art 261 et seq SCCPSafeguarding Measures under Art. 261 et seq. SCCP

The court can issue the necessary precautionary measures if the applicant can make plausible:make plausible:(1) that a claim or right has been breached or a breach is to be expected; and(2) the breach will cause a damage which is not easily remediable.

Negative injunction preventing the defendant from changing the status quo and protecting an alleged right of the claimant in order to secure an effective enforcement in the future, once the disputed matter is determined on its merits (such as preservation orders restraining the defendant from disposing of real(such as preservation orders restraining the defendant from disposing of real property)

•(i) the likelihood that the claim in the main trial is justified ( ) j•(ii) the existence of an impending and not easily remediable damage, if the injunction is not granted•(iii) urgency in granting the provisional remedy

Conservatory measuresConservatory measuresType of measures pursuant to Art. 262 SCPP (coupled with threat of criminal sanction under Art. 292 PC if not complied with – NO CONTEMPT OF COURT)p )

(a) Prohibition (b) An order to set aside an illegal situation( ) g(c) An order directed at a registry or at a third party to refrain from allowing or effecting any disposal

- Order to bank to freeze a certain account respectively to maintain status quostatus quo

- Prohibition to bank to release certain securities to one of the parties (d) The intermediate payment of a certain sum in the cases provided by law

- Support payment under family law for children…butpp p y y…might apply e.g. to Dutch orders to effect certain contractual payments pending the final determination of the case

(Articles 289 to 297 of the Netherlands Code of Civil Procedure deal with a form of procedure known as `kort geding' which allows the President of the Arrondissementsrechtbank to grant enforceableas kort geding', which allows the President of the Arrondissementsrechtbank to grant enforceable measures `in all cases which, having regard to the interests of the parties, require an immediate measure on grounds of urgency' (Article 289(1)).

Monetary Claims: The Attachment Proceedings

If a claim for money is involved, the classic interlocutory order designed to secure its enforcement is the attachment orderenforcement is the attachment order.

The attachment order (Séquestre, Arrest, Sequestro) is the classic interlocutory order designed to secure the enforcement of a claim for money.

•It causes a temporary freezing of assets located in Switzerland in order to secure a basis for subsequent enforcement, pending a final determination of the litigation on the merits in respect of a monetary claim only.

•A claimant will usually apply for an attachment as a pre-trial interlocutory order before a claim is filed, but attachments may also be obtained at any time after the filing of the main action in Switzerland or abroad as an ancillary remedy. The monetary claim for which an attachment order is sought must be prima facie due and payable

•The statutory basis for attachments is laid down in the Federal Act on Debt Collection and Bankruptcy of 11 April 1889 ("DCB"), specifically articles 271 to 281 DCB. p y p ( ), p y

•To obtain an attachment order over assets of a defendant, an applicant must mandatorily show any of five conditions or reasons (Cas de séquestre, Arrestgründe, Cause di sequestro) allowing an attachment pursuant to article 271 DCB, namely: q ) g p , y

Presently: 5 reasons for attachmentPresently: 5 reasons for attachment(1) the defendant has no fixed place of residence or abode anywhere(1) the defendant has no fixed place of residence or abode anywhere,

in Switzerland or abroad;(2) the defendant has dissipated assets, flees or prepares to flee in

order to defeat enforcement of undischarged debts;order to defeat enforcement of undischarged debts;(3) the defendant is in transit or is a person visiting markets or fairs,

provided the relevant claim is of a nature that requires immediate payment;p y ;

(4) the defendant has no residence in Switzerland, no other reasons for an attachment are fulfilled, but the claim has a sufficient nexus with Switzerland or is based on an enforceable judgmenton an enforceable judgment or a

itt k l d t f d btwritten acknowledgment of debt; (5) the creditor holds certificates of unsuccessful former enforcement in

respect of undischarged debts of the debtor.

Attachments in fraud litigations: Difficulties

• In an international context the principal ground usually relied upon• In an international context, the principal ground usually relied upon is the absence of Swiss residence.

• The additional requirement of a sufficient nexus with Switzerlandhas not been defined by the legislator Court practice has developedhas not been defined by the legislator. Court practice has developed a number of factual circumstances which are deemed sufficient to establish such a nexus. If the claim is based on contract, then a nexus would be established if the contract was negotiated,

l d d f d h ll i t i S it l d S iconcluded or performed, wholly or in part, in Switzerland, or Swiss law or an arbitration clause with seat in Switzerland was determined to be applicable to the contract or to any disputes arising out of it.

• In tort cases the claimant would have to show that the activities• In tort cases, the claimant would have to show that the activitiesleading to the tort claim were carried out, at least in part, in Switzerland.

• A fraud victim might not be able to obtain an attachment if the onlyA fraud victim might not be able to obtain an attachment if the only nexus to Switzerland is constituted by the existence of a Swiss bank account, without any apparent evidence that any fraudulent activities were carried out in the country.

Application for attachmentApplication for attachmentThe application for an attachment order is filed ex parte in• The application for an attachment order is filed ex parte in summary proceedings

• Written submission that any one of the five conditions of article 271 DCB is met271 DCB is met

• prima facie case supporting a reasonable probability of a valid claim Establish b a of doc mentar e idence the n mber and• Establish by way of documentary evidence the number and denomination of the Swiss account/asset to be frozen

• The jurisdiction ratione loci is the court at the registered seat of the bankof the bank

• If an application is unsuccessful, the defendant is not notified, giving the applicant the possibility to improve his application by filing a second more documented version of it or by filing anfiling a second, more documented version of it or by filing an appeal against the adverse decision of the lower court. As long as the applicant is not successful, the defendant is not notified of any applications filedof any applications filed

New Ground for Attachment under Art. 271 sec. 6 DCB

C i i t f f 1 t J 2011Coming into force as from 1st January 2011:New section 6: An attachment may be granted if the claimant disposes of aAn attachment may be granted if the claimant disposes of a title for final enforcement under the DCB

(i) enforceable court awards (on payment of a sum(i) enforceable court awards (on payment of a sum of money);(ii) enforceable arbitration awards;(iii) Resolutions and decisions of cantonal and federal authorities (including uncontested tax decisions);decisions);(iv) enforceable public deeds.

Novelties provided under sec. 6 of Art. 271 DCB

Lugano“ court judgments are equivalent to Swiss• „Lugano“ court judgments are equivalent to Swiss judgments.(The Lugano Convention on Jurisdiction and the ( gEnforcement of Judgments in Civil and Commercial Matters of 1988/2007, the latter applicable to EU including eleven new EU member states (Czech g (Republic, Cyprus, Slovakia, Slovenia, Hungary, Malta, Estonia, Latvia, Lithuania, Bulgaria and Rumania) plus Switzerland, Norway and Iceland (yet to be ratified)S e a d, o ay a d ce a d (ye o be a ed)Judge granting the attachment effects an exequatur of the Lugano-judgment in ex parte proceedings.

Novelties provided under sec. 6 of Art. 271 DCB

NEW ISNEW IS:- No absence of Swiss residence (Assets of Swiss residents might now become subject to attachment)residents might now become subject to attachment)- No nexus to Switzerland needs to be shown (but assets in Switzerland need still to be identified);)- Urgency or threat of creditors‘ interest through a possible dissipation of assets by debtor no longer needs to be shown;to be shown;- Order has Swiss-wide effect: Application might be brought in Zurich, but also address assets located inbrought in Zurich, but also address assets located in Geneva (but all assets still need to be identified

Freezing of State assets?Freezing of State assets?Th d f tt h t i th ibilit•The new ground for attachment gives the possibility, on

the basis of an enforceable judgment rendered in a Lugano state against a foreign state, to freeze the assets of a g g ,foreign State in Switzerland.•Conditions:

– acta iure gestionis– assets to be attached are not used for any public purpose– thus far nexus to Switzerland was requiredthus far, nexus to Switzerland was required.

This is no longer the case. Swiss Department of Justice is presently drafting new guidelines on the procedure to be

2 1 6 C 2011adopted, in line with Art. 271 sec. 6 DCB – during 2011

OutlookOutlook N L j d t d fi t t th h (i t• Non Lugano-judgments need first to go through (inter-partes) exequatur proceedings in order to be coupled with attachment proceedingsp g

• Increase of attachment proceedings expected in Switzerland, in particular:

• - against Swiss citizens and residents;• - attachment by tax authorities for unpaid taxes now

possible;possible;• -against assets of foreign states• - Creditor might freely decide which assets should be• - Creditor might freely decide which assets should be

frozen (improvement of negotiating position of creditors to obtain quicker discharge of debts)

No security for attachments under Sec. 6 of Art. 271 DCB

S itSecurity• The applicant who obtains an attachment order is liable

to both the defendant and to any third party affected forto both the defendant and to any third party affected for damages suffered as a result of an unjustified attachment.

• It lays within the discretion of the judge to order the claimant to post a bond as a security against such potential damage (usually 10% of the claim for whichpotential damage (usually 10% of the claim for which attachment is sought, to be put up usually by way of a cash deposit or a bank guarantee.

• Under the cases of sec. 6, unlikely that judges will ask for security from the applicant.