EGYPT Law and Practice Contributed by: Amr A Abbas, Ahmed Abdel Hakeem, Khaled Abou El Wafa and Adham Ahmed Saied, Matouk Bassiouny & Hennawy
Precautionary Attachment The Civil and Commercial Procedures Law No 13 of 1968 regulates the procedures to preserve assets on an interlocutory basis. The law grants the successful party the right to impose a precautionary attachment over movables owned by, and in the possession of, the debtor or a third party (eg, the debtor’s bank). Precautionary attachment puts the assets under the control of the courts. Thus, a defendant may not dis - pose of any of the assets subject to precautionary attachment. A precautionary attachment does not require a court decision; rather, it can be carried out by a court bailiff upon fulfilling certain legal require - ments. Broadly, it is an interim measure to determine the assets of the defendant and restrict it from taking any action in relation to the assets that would be to the detriment of the enforcing party. The general requirements for precautionary attach - ment are that:
domestic judgments. As a rule, final judgments are subject to compulsory enforcement, which is also the case for judgments rendered by the court of appeal. However, some judgments rendered by the court of first instance may also be enforceable if provided for by law (eg, summary judgments), unless the judgment provides for the depositing of a security. In addition, the law grants the successful party the right to impose a precautionary attachment over movables that are owned by – and in the possession of – the debtor or a third party (eg, the defendant’s bank account). Finally, this law also regulates the requirements and proce - dures for the compulsory enforcement of domestic judgments. Enforcement Process The first step in the enforcement process is the service of the relevant judgment on the defendant, demanding that it responds to the judgment voluntarily (eg, pay the amount awarded or deliver the land sold). The notice is served by the court bailiff on the defend - ant at their actual residence, including a copy of the document based on which the enforcement is sought and a request that the defendant undertake the neces - sary action. This could include paying the debt, per - forming specific work, or delivering a particular item. The defendant can avoid the compulsory enforcement procedures if it acts on the judgment voluntarily fol - lowing the notification. Secondly, the respective party must submit an enforcement request to the head of the competent enforcement administration. Thirdly, the enforcing party may then proceed to enforce the judgment against the defendant’s assets through an attachment followed by a public auction. The proceeds from the auction will then be distributed to the creditors of the defendant. Furthermore, the defendant’s assets might be subject to precautionary attachment and executive attach - ment. It is also possible for creditors to file a lawsuit before the competent court to declare a debtor bank - rupt or insolvent.
• the right is certain; • the right is due; and • the right is quantified.
If the creditor does not have an enforcement instru - ment or an enforceable judgment, or its debt is not quantified, the precautionary attachment will only be levied by an order from the enforcing judge as long as the debt is certain and due. In this case, the debt will be quantified temporarily. Finally, only movables can be subject to precautionary attachments. Executive Attachment Subject to the satisfaction of certain legal require - ments and procedures, the executive attachment is the step preceding the compulsory sale of the defend - ant’s assets by public auction under the supervision of the competent enforcement judge. Executive attach - ment procedures differ depending on the nature of the asset subject to the attachment (ie, a movable or an immovable asset). Furthermore, for insolvency proceedings, Egyp - tian law differentiates between insolvency (which is
147 CHAMBERS.COM
Powered by FlippingBook