This article discusses the options for requesting attachment of goods as a security for the enforcement of the court award to be issued in the litigation procedure and as a material evidence in the litigation procedure, as well as the possibilities for appealing the court rulings issued in relation to the requested attachments.

I. Attachment of goods as a security for the enforcement of the court award

This procedure is aimed at procuring sufficient security for the enforcement of the court award to be issued in the litigation procedure. Attachment of goods may be requested either before filing the statement of claim or at any subsequent stage of the litigation proceedings. In order to allow an attachment the court should be convinced that without such an attachment the enforcement of the court award would be impossible (or at least impeded), provided that the applicant presents written evidence in support of his claim and/or a guarantee1 in the amount determined by the court. The procedure involves the following steps:

(1)

the applicant submits an application to the court indicating the requested attachment and the amount (to be) claimed;

(2)

the court should resolve on the application at a closed session held within the day, in which it has been submitted; unlike the procedure described in Section II below, in this procedure the defendant shall not be uninformed about the requested attachment, so that it could not prevent its actual imposition;

(3a)

if the court issues a ruling allowing the attachment2, the applicant has to file an application with the judge on executions, who shall reduce to writing the description and the evaluation of the attached assets, and shall issue an order banning any acts of disposal with the attached assets; the attached assets may be left with the defendant, but if the judge on execution so decides, they could be entrusted to another person, who is put under the obligation to keep the assets with due care;

(3b)

if the court issues a ruling for non-satisfaction of the attachment claim, the applicant is allowed to appeal the ruling under the procedure described in Section III below; the applicant is also entitled to request the attachment repeatedly at any subsequent stage of the proceedings;

(4)

the court shall determine a deadline by which the applicant should file its statement of claim against the defendant; such term shall be determined in the court ruling allowing the attachment, in the event the applicant fails to file its statement of claim by the deadline, the attachment is revoked.

The costs involved are (a) a court fee to be paid prior to submitting the application and a fee for the actions to be undertaken by the judge on executions amounting greater of 1% of the claimed amount (or the value of the claimed assets).

II. Attachment of goods as a material evidence in the litigation procedure

This procedure is aimed at procuring evidences at an earlier stage of the litigation procedure or even before its initiation, with a view to the possibility that at a later stage of the proceedings the presentation of the evidences might create greater difficulties or even turn out to be impossible. It is sufficient for the applicant to declare before the court the possibility of such difficulties arising at a later stage of the proceedings, and it is not necessary that the applicant proves the likelihood of such difficulties arising. The procedure involves the following steps:

(1)

the applicant submits an application to the court;

(2)

the court provides a copy of the application to the defendant;

(3)

the court issues a ruling allowing (or not allowing) the attachment of the products as an evidence;

(4a)

if the court allows the attachment, it appoints one or more experts (in our case preferably a pharmacist and an accountant), whose task is to inspect the pharmaceutical products and to reduce to writing all their characteristics relevant to the case (type, quantity, price, expiry term, etc.);

(4b)

if the court does not allow the attachment the applicant is entitled to appeal the court ruling under the procedure described in Section III below; the court ruling can be appealed only if the attachment is not allowed, i.e. if the court allows the attachment the defendant is not entitled to appeal the court ruling;.

(5)

after the court appointed experts have performed their assignment their report is presented to court;

(6)

the court holds a hearing, to which the experts, the applicant and the defendant should be summoned,; both the applicant and the defendant are entitled to argue their respective positions with regard to the report of the experts; if the findings in the report are disputable the litigants are entitled to request another inspection performed by three court appointed experts;

(7)

the court shall issue a ruling to which the report of the court appointed experts should be enclosed to the other documents on the case and treated as an evidence for the facts ascertained in this report.

The costs involved are (a) a court fee to be paid prior to submitting the application, and a fee covering the compensation to be paid to the court appointed experts, the amount of which is determined by the court and can vary depending on the scope and difficulty of the task assigned to the experts.

III. Appeal of Court Rulings Issued on Requests for Attachment

The court rulings issued under either of the procedures discussed in Sections I and II above are subject to appeal under one and the same procedure, which involves the following steps:

(1)

the appellant should submit its statement of appeal within seven (7) days as of the day, on which it has been informed of the ruling; in the statement of appeal the appellant should indicate his objections to the ruling and point out (and enclose) evidence supporting his objections; the statement of appeal is initially submitted to the court, which has issued the appealed ruling and is later sent to the court of higher instance;

(2)

the court provides a copy of the statement of appeal and of all the documents enclosed thereto to the other litigant3 and gives the latter a three days term to declare its objections to the statement of appeal;

(3)

the court sends the documents on the case to the court of higher instance;

(4)

the court provides a copy of the statement of appeal and of all the documents enclosed thereto to the other litigant3 and gives the latter a three days term to declare its objections to the statement of appeal;

Nadejda Krastanova is an associate of the Company Commercial Law Dept. of Studio Legale Sutti in Milan.

Footnotes

1 This guarantee is aimed at protecting the interests of the defendant, i.e. if the applicant fails to prove his case and does not receive a court award in his favor, and if the defendant has incurred damage in result of the attachment, the guarantee presented by the applicant will be used to compensate the defendant’s damage. The court has the discretion to require a guarantee even if the applicant presents written evidence in support of his claim. The type of the guarantee can be (i) a deposit of money or state securities; or (ii) a mortgage. 2 Such a ruling can be appealed by the defendant, but even if appealed, it is enforced, i.e. the execution procedure shall not be suspended because of the appeal.

3 Despite of the lack of explicit provision setting forth exceptions of this rule, it is our opinion that it would not be applied in the event of appealing a court ruling under Section II, paragraph (iiib), since otherwise the request for attachment would be pointless.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.