Understanding Freezing Orders in Switzerland: Key Requirements and Procedures

In Switzerland, freezing orders serve as a precautionary measure to secure a debtor's assets, ensuring that creditors can safeguard their claims. This article outlines the essential requirements for obtaining a freezing order, the procedure involved, and the enforcement process.

Requirements for Granting a Freezing Order

A court will grant a freezing order if the creditor can credibly demonstrate the following:

• Existing Claim Against the Debtor

The applicant must prove the existence of a monetary claim against the debtor, showing a likelihood of being a creditor. This can stem from an existing judgment or circumstances like an acknowledgment of debt or contractual obligation. The claim must be immediately established and mature, although exceptions apply if the claim is particularly endangered, such as when the debtor lacks a permanent residence or is at risk of absconding. Claims already secured by a lien are ineligible for a freezing order.

• Assets of the Debtor Located in Switzerland

The creditor must provide prima facie evidence of assets owned by the debtor, specifying the assets to be frozen and their location. Only assets belonging to the debtor can be secured, and they must be attachable with monetary value, such as physical objects, intellectual property rights, or bank account balances. Exceptionally, assets formally belonging to another legal entity may be frozen if credible evidence of economic unity exists. Assets must be located in Switzerland, with their location determined by physical presence or land register entry for real estate, or the domicile of the creditor or third-party debtor for non-embodied claims.

• Grounds for Freezing Order

The creditor's claim must be at risk due to the debtor's behavior or external circumstances. Grounds for a freezing order include:

• No Permanent Residence: The debtor lacks a fixed domicile, posing enforcement challenges.
• Intent to Evade Obligations: The debtor stashes assets or absconds to evade obligations.
• In Transit or Attending Markets: Targeting traveling merchants, this applies to claims due on receipt.
• Foreign Domicile with Swiss Connection: The debtor is abroad, but the claim has a sufficient relation to Switzerland or is based on an enforceable judgment.
• Certificate of Shortfall: The creditor holds a certificate of loss from unsuccessful debt collection.
• Enforceable Title: The creditor has an enforceable judgment, arbitral award, or public deed.

Procedure: How to File a Freezing Order

Jurisdiction

The petition for a freezing order is filed with the court at the place where the debt collection proceedings take place (generally the debtor's residence) or where the assets are located. Cantonal law governs the competent court, typically a single judge at first instance. Multiple requests can be bundled at the forum for the debt collection proceedings and assets can be seized throughout Switzerland.

Summary Proceedings

Due to urgency, the procedure is unilateral, with the debtor not notified until after the decision. The court issues the order based on a summary examination of the creditor's submissions, focusing on their plausibility. Only immediately available evidence is admissible.

Advance on Costs

Court fees depend on the amount in dispute, ranging from CHF 70 to CHF 4,000, and are advanced by the applicant. The court may also require advance costs for potential objection proceedings initiated by the debtor.

Enforcement of the Freezing Order

The debt enforcement office executes the freezing order, securing specified assets without prior notification to the debtor. The order has a security function and provisional character, subject to the prohibition of excessive distraint. Certain assets may be exempt or limited in seizure even if they are listed in the freezing order.

Objection, Appeal, and Damages

Affected parties can lodge an objection within ten days of receiving the executed order, allowing for a subsequent hearing. The court decides promptly, and the decision can be appealed. Objections may challenge jurisdiction, competence, grounds, or claim validity. If the freezing order is unjustified, the creditor is liable for resulting damages, with the judge potentially requiring security from the creditor.

Freezing orders are a vital tool for creditors in Switzerland, providing a mechanism to secure assets and protect claims amidst potential risks. Understanding the requirements and procedures ensures effective use of this legal remedy.

Get in Touch

Please get in touch with our Swiss Litigation team in case you have any queries about freezing orders in Switzerland.