European preservation order in Regulation No. 655/2014 – what does the procedure look like?

On 18 January 2017, 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 entered into force. The provisions are intended to make it easier to recover cross-border claims in civil and commercial cases. The said Regulation provides creditors with an alternative to national protective measures. It introduces a procedure that allows the creditor to obtain a European Account Preservation Order (EAPO). This measure is intended to safeguard subsequent enforcement of claims by preventing their disposal, transfer or withdrawal through the preservation of a specified amount of money. Given the current prevalence of transactions with entities holding accounts in various parts of the European Union, the aforementioned preservation order may prove to be a useful and advantageous tool for creditors, making the recovery of claims easier. Let us therefore discuss the situations in which Regulation 655/2014 applies and how to apply for the preservation order.

Scope of Application

Regulation (EU) 655/2014 applies to monetary claims in cross-border civil and commercial matters. A cross-border case, as defined in Article 3, is one where the bank account or accounts to be preserved are located in a Member State other than:

1. the Member State of the court where the application for the preservation order is submitted; or
2. the Member State in which the creditor is domiciled.

The relevant date for determining whether a case is cross-border is the date on which the application for the preservation order is lodged with the court. According to Article 2, the procedure does not apply to revenue, customs or administrative matters, or to state liability for acts and omissions in the exercise of state authority. Furthermore, the Regulation does not apply to matters listed in paragraph 2 of that article. Therefore, before filing an application for a preservation order, it is worth checking whether any of these exclusions apply to your case. Additionally, it should be remembered that under the Regulation, a creditor may not file parallel applications, i.e., against the same debtor for the same claim.

How to Obtain a European Account Preservation Order?

Let us now discuss how to obtain a European Account Preservation Order against a debtor. According to Article 5 of Regulation 655/2014, a creditor may apply for a preservation order before initiating proceedings in a Member State, as well as at any stage during the proceedings until judgment is given or a court settlement is approved or concluded. Moreover, it may also be obtained after the conclusion of proceedings where the creditor has obtained in a Member State a judgment, court settlement or authentic instrument requiring the debtor to pay the creditor’s claim. In accordance with Article 8 of Regulation 655/2014, the application for a preservation order must be submitted using the official form. This should include, inter alia, the designation and address of the court, details of the creditor and the debtor, and information about the bank where the debtor holds at least one bank account. Other requirements are specified in detail in Article 8(2).
The provisions state that a complete application should be submitted together with all relevant documents proving the existence of a judgment, settlement or authentic instrument, along with a copy of the judgment, court settlement or authentic instrument that meets the necessary conditions for establishing authenticity. The application and annexes may be submitted using any means of communication, including electronic means, provided these are accepted under the procedural rules of the Member State in which the application is lodged. As regards jurisdiction, all documents should be submitted in accordance with the rule laid down in

Article 6, which provides that:

“1. Where the creditor has not yet obtained a judgment, court settlement or authentic instrument, jurisdiction to issue the preservation order lies with the courts of the Member State which has jurisdiction to rule on the substance of the matter in accordance with the applicable rules on jurisdiction.

2. By way of derogation from paragraph 1, where the debtor is a consumer who has concluded a contract with the creditor for a purpose which can be regarded as being outside the debtor’s trade or profession, jurisdiction to issue a preservation order to secure a claim relating to that contract shall lie exclusively with the courts of the Member State in which the debtor is domiciled.
3. Where the creditor has already obtained a judgment or court settlement, jurisdiction to issue a preservation order in respect of the claim determined in the judgment or court settlement shall lie with the courts of the Member State in which the judgment was given or the court settlement was approved or concluded.
4. Where the creditor has obtained an authentic instrument, jurisdiction to issue a preservation order in respect of the claim determined in that instrument shall lie with the courts designated for that purpose in the Member State in which the authentic instrument was drawn up.”

In order for the court to issue a European Account Preservation Order, the creditor must demonstrate that there is an urgent need for such a protective measure, as the enforcement of the claim would otherwise be impeded or impossible. Where no judgment, authentic instrument or court settlement has yet been issued, the order may still be granted provided the creditor submits appropriate documents indicating that they are likely to succeed in the main proceedings. If you are unsure whether your situation meets the necessary requirements or do not know what documents to present, it is advisable to seek legal advice from a law firm.
The court makes its decision in written proceedings based on the evidence and documents submitted by the creditor. In accordance with Article 18 of Regulation 655/2014, the proceedings should be concluded without delay, and no later than within the deadline laid down in the Regulation.

Where the application is made before the main proceedings are initiated, the creditor is subject to additional obligations. They must initiate the proceedings within 30 days from the date of submitting the application or 14 days from the issuance of the preservation order. Furthermore, they must provide an appropriate security deposit to safeguard against misuse of the procedure. A similar obligation may also be imposed on the creditor by the court even after obtaining the relevant judgment or document, if certain circumstances so warrant.

If the court grants the application, a preservation order will be issued using the relevant form, which in accordance with Article 20 shall remain in force:

1. a) until the order is revoked;
2. b) until the enforcement of the order is concluded; or
3. c) until a measure to enforce the judgment, court settlement or authentic instrument obtained by the creditor in connection with the claim secured by the order becomes effective with regard to the funds preserved by the order.

Under Article 21 of Regulation 655/2014, an order issued in one Member State will be recognised in other Member States without the need for further proceedings and will also be enforceable in other Member States without the need for a declaration of enforceability.
In the case of a negative decision, an appeal may be lodged within 30 days from the date the decision is served on the creditor. If your application is rejected, it is worth seeking the assistance of a legal adviser to prepare an effective appeal.

Request for Bank Account Information

In addition to the procedure for obtaining a preservation order, Regulation 655/2014 also provides for a supplementary application. Under Article 14, if the creditor has obtained an enforceable judgment, court settlement or authentic instrument and does not know the debtor’s bank account details, but has reasonable grounds to believe that the debtor holds at least one account in a Member State, they may request the court to which the application for the preservation order is submitted to request that the information authority of the Member State obtain the necessary information to identify the bank or banks and the account or accounts of the debtor. The application may also be submitted if the judgment, settlement or document is not yet enforceable. The application should be lodged together with the application for the preservation order. The creditor is required to justify their assumptions before the court, indicate the relevant circumstances and meet all formal requirements.