Seizure of Property: Procedure and Mechanisms for Appealing Decisions of the Enforcement Service

Seizure of property is one of the enforcement measures used by public and private enforcement officers in the course of enforcing court decisions. This restriction deprives the debtor of the ability to freely dispose of his property.

Therefore, this article examines the procedure for seizing a debtor’s property in enforcement proceedings, the mechanisms for its removal, and the ways to appeal against decisions of enforcement officers.

The procedure for seizure

The procedure for seizing the debtor’s property is set out in Article 56 of the Law of Ukraine “On Enforcement Proceedings” and consists of issuing a resolution to seize the debtor’s property (funds) or a resolution to inventory and seize the debtor’s property (funds).

Since the mere fact of issuing a seizure order does not automatically restrict the right to dispose of such property, the bailiff sends copies of the seizure orders to banks or other financial institutions and property registration authorities on the day they are issued. Also, on the day of the seizure order, the state enforcement officer enters the relevant data into the State Register of Encumbrances on Movable Property, the Register of Real Property Rights and Encumbrances.

Grounds for lifting the arrest:

The exhaustive list of grounds for lifting the seizure of the debtor’s property is set forth in Article 59 of the Law of Ukraine On Enforcement Proceedings, which includes, inter alia, the following:

• Termination of enforcement proceedings in accordance with the provisions of Article 39 of the Law of Ukraine “On Enforcement Proceedings”. This may include, for example, the court’s recognition of the claimant’s refusal to enforce the court decision, the court’s approval of the settlement agreement, the cancellation or invalidation of the decision, the actual full execution of the decision in accordance with the enforcement document, or in other cases specified in the said provision of the Law.
• Identification of violations of the seizure procedure.
• Obtaining documentary confirmation by the enforcement officer that the debtor’s account has a special regime of use.
• Entry into force of a court decision to lift the seizure of the debtor’s property.

In case of receipt of documents confirming one of the grounds for lifting the seizure of property, the bailiff is obliged to issue a resolution to lift the seizure no later than the next business day. In addition, the executor must send this resolution on the same day to the body (institution) that received the resolution on seizure of the debtor’s property for execution.

At the same time, the executors shall be liable for violation of the deadlines for making decisions and performing enforcement actions in accordance with the procedure established by law.

Ways to appeal against arrest in enforcement proceedings:

1. Out-of-court appeal

The debtor may appeal to the head of the relevant department of the State Enforcement Service or the Ministry of Justice of Ukraine if the seizure was imposed by a private enforcement officer. Based on the results of consideration of the complaint, the decision to arrest may be canceled.

2. Judicial appeal

Pursuant to Article 447 of the Code of Civil Procedure of Ukraine, the parties to enforcement proceedings have the right to file a complaint with the court if they believe that a decision, action or inaction of a state enforcement officer or other official of the state enforcement service or a private enforcement officer in the course of enforcement of a court decision made in accordance with this Code violates their rights or freedoms.

A complaint against the actions of the bailiff is filed with the court that issued the enforcement document in pursuance of which the property was seized. This can be a general court (in which case the provisions of the Civil Procedure Code should be taken into account), a commercial court (we use the Commercial Procedure Code) or an administrative court (which is less common, and in which case the Code of Administrative Procedure will be useful). In most cases, we deal with either general courts or commercial courts.

In addition, a person who believes that the seized property belongs to him or her and not to the debtor may also file a lawsuit to recognize the ownership of this property and to lift the seizure.

Conclusions

Seizure of property is an important legal tool used in enforcement proceedings to ensure the enforcement of court decisions. It imposes restrictions on the debtor’s ability to dispose of its property, but at the same time has a clearly defined procedure for imposing it, grounds for lifting it, and appeal mechanisms.

At the same time, the procedure for seizing a debtor’s property in enforcement proceedings requires strict compliance with the law by both the enforcement officers and the debtors and stakeholders. Proper application of appeal mechanisms allows to protect the rights of property owners and avoid unlawful restrictions.

Vladyslav Pavlenko, lawyer at Strategic Advocacy Law Firm, comments:

“The seizure of property is a complex legal issue that requires a qualified approach and a detailed understanding of the enforcement process. The lawyers and attorneys of our company have extensive experience in resolving cases related to the seizure of property and are ready to provide comprehensive legal assistance at all stages – from analyzing the legality of the seizure to appealing it and fully protecting your property rights. We will provide effective solutions and accompany you throughout the process to minimize risks and ensure proper protection of your interests.”