In Luxembourg, it is possible for a creditor to freeze a debtor’s bank accounts held with a Luxembourg bank. The measure is, in the first instance, protective. The bank is served with a writ of attachment which has the effect of freezing the account of the debtor. The creditor will then have to validate the freezing measure in order to be allocated the amounts available on the seized account up to the amount of its claim.

The attachment may be made on the basis of an authentic or private document (Article 693 of the New Code of Civil Procedure). If the creditor does not have a title, he can ask to be authorized to carry out the freezing measure by the judge of the defendant’s domicile or by the judge of the domicile of the bank holding the account (Article 694 of the New Code of Civil Procedure).

In the second case, when the creditor seeks authorization to proceed with the attachment by the judge, the procedure is initiated, initially, by a unilateral application lodged with the judge who is called upon to issue an order. This order will enable the creditor to have the writ of attachment served on the bank. In order for the judge to issue such an order, the creditor must nevertheless be able to assert a claim against the debtor, a claim that must be certain in principle (see in particular Court of Cassation 16 June 2022 n° CAS-2021-00099).

As the protective phase is unilateral and without adversarial debate (i.e. only the applicant is heard), the question arose as to whether the creditor had an obligation to present the case with a certain degree of transparency by presenting it in all its facets, even if such a full presentation might compromise the creditor’s claim.

More specifically, the case law had identified an obligation of loyalty on the part of the seizing creditor, which should be applied in any procedure where the judge is led to rule unilaterally without an adversarial debate (Court of Appeal, 20 December 2017, no. 44896, in the context of a seizure of a description (saisie-description), Tribunal d’Arrondissement de Luxembourg 3rd chamber 3 July 2020 n°TAL-2020-02240 in the context of a unilateral request for a conditional payment order, Tribunal d’Arrondissement de Luxembourg, Référé 13 January 2015 in the context of a bank account freezing measure).

Under this duty of loyalty, the case law considered that it was not up to the claimant to judge the usefulness or necessity from a factual or legal point of view of submitting to the judge such and such a document in order to assert the respect of the obligations imposed on him. The claimant was obliged to submit all information that showed the existence of a dispute or debate.

It was therefore decided that the mere fact of neglecting to inform the judge of the entire legal and factual situation of the case could vitiate the procedure and, therefore, the possibility for the judge to annul and retract the order that served as a basis for the garnishment (and, thus, lift the freezing of the bank account).

However, it seems that the case law has changed its position.

In a decision of the Court of Appeal of 9 February 2022 (CAL-2021-01095), the Court of Appeal recalled that under Article 1253 of the New Code of Civil Procedure, no document or procedural act may be declared null and void, if the nullity is not formally provided for by law. However, as no provision of the law would provide that the request of a creditor who, without attaching the relevant documents, submits to the judge a petition relating to a claim that had already been contested before the petition was filed, would entail the nullity of the petition or of the conditional payment order made on the basis of this petition, nor the inadmissibility or rejection of the proceedings for having been initiated in an unjustified manner.

An decision of the first instance summary Court (Tribunal d’Arrondissement de Luxembourg, Référé of 22 July 2022 (n°TAL-2022-04548)) reaffirms this position by indicating that procedural unfairness could, at most, give rise to damages for abusive and vexatious proceedings, if the unfair attitude causes prejudice to the party seized.

Note: the author of this article represented one of the parties in the case of the decision of the summary Court (Tribunal d’Arrondissement de Luxembourg, Référé of 22 July 2022 (n°TAL-2022-04548)