Interim relief in commercial law

When might an attachment order be considered?

Under Section 916 of the Code of Civil Procedure (ZPO), attachment serves to secure a monetary claim or a claim that may be converted into a monetary claim. However, it does not constitute final satisfaction. Rather, it gives the creditor the opportunity to provisionally secure assets so that a subsequent judgement does not become worthless.

In addition to the right to an attachment order, there must be grounds for the attachment. Under Section 917 of the German Code of Civil Procedure (ZPO), there must be a risk that enforcement would be thwarted or significantly impeded without an attachment order. A mere presumption that the debtor will not pay is generally not sufficient. On the other hand, concrete circumstances such as unusual transfers of assets, the closure of accounts or the relocation of business operations, as well as verifiable indications that assets are to be removed from reach, carry significant weight.

In a business context, attachment may, for example, be relevant in the case of claims for purchase price, loans, damages or repayment. However, the measure must remain proportionate. Extensive access to accounts can significantly impair the debtor’s operational activities and, in the event of an unjustified order, give rise to a liability for damages.

What can be achieved with an interim injunction?

A protective order under Section 935 of the German Code of Civil Procedure (ZPO) serves to safeguard the enforcement of a right where a change in the existing situation could frustrate or significantly impede this. A regulatory injunction under Section 940 of the German Code of Civil Procedure (ZPO) establishes a provisional order where this is necessary, particularly in the case of a continuing legal relationship, to avert significant disadvantages.

In commercial disputes, applications frequently concern injunctions, breaches of competition law, the use of trade secrets, the surrender or blocking of certain access rights, participation in shareholders' meetings, or the provisional handling of disputed voting rights. Orders that maintain the status quo until a decision has been made on the main issue are also possible.

In principle, an interim injunction must not definitively prejudge the main proceedings. In particularly urgent cases, however, an injunction ordering specific performance may nevertheless be permissible if effective legal protection cannot be achieved by other means and the applicant faces serious disadvantages. The requirements are stringent, as the interim decision may then, in practice, have definitive effects.

How is the urgency demonstrated?

Interim relief requires that the applicant cannot be directed to the main proceedings because these would take too long. To this end, it must be specifically demonstrated and substantiated that, as time passes, there is a risk of significant, unreasonable or irreversible detriment. It is not sufficient for the matter to be of economic importance. The fact that the defendant is in financial difficulties is therefore not sufficient. Rather, concrete evidence is required to show that subsequent enforcement would be thwarted or made significantly more difficult, or that a subsequent decision would no longer be able to compensate for the impending disadvantage.

In this regard, the courts also take the applicant’s conduct into account. Anyone who remains inactive for a prolonged period after having reliable knowledge of a breach weakens their own case regarding the urgency of the matter. Fixed time limits do not generally apply outside specific areas of law, and the practice of individual courts or federal states may vary. Therefore, the facts of the case should be examined immediately, steps taken to preserve evidence, and a swift decision on the application reached.

Establishing a prima facie case does not mean that full proof must already be provided. In particular, documentary evidence and affidavits are admissible. The latter should reflect the applicant’s own specific observations and not merely confirm legal assessments. Contradictions or statements that are recognisably exaggerated undermine the credibility of the entire application.

Can the court make a decision without hearing the other party?

In summary proceedings under Section 937(2) of the Code of Civil Procedure (ZPO), a decision may be made without an oral hearing in urgent cases. The court may also rule without an oral hearing if the application is to be dismissed. The provision primarily governs the waiver of a hearing. Whether it is also possible to dispense with a prior written hearing of the opposing party must be assessed separately, whilst ensuring the right to be heard is upheld.

The key factors to be weighed up are, above all, time pressure, the risk of the application being thwarted if advance warning is given, the intensity and reversibility of the requested intervention, and the question of whether a short period for submitting a statement is still feasible. If the opposing party has already responded to a formal warning or other objection, this response may be attached to the application. Similarly, any protective submission on file must be included.

Although an order issued without a prior hearing allows for speed, it places greater demands on the presentation of a complete and fair case. The applicant must not withhold exculpatory or contradictory circumstances. A deliberately one-sided presentation of the facts may lead to significant disadvantages in opposition proceedings and increase the risks of costs and damages.

Anyone who fears that an application for an attachment order or an interim injunction may be brought against them can take preventative action. In accordance with Section 945a of the German Code of Civil Procedure (ZPO), a protective submission may be filed with the central register of protective submissions – this is then deemed to have been submitted to all courts. This ensures that the court is aware of the opposing party’s perspective on the dispute even before a decision is made and would take this into account should the need arise. Anyone preparing such an application should therefore expect that potential objections are known and must be addressed objectively in their own submission.

What role does the provision of security play?

The court may make the granting of an attachment order or an interim injunction conditional upon the provision of security. Under Section 921 of the Code of Civil Procedure (ZPO), it may even order an attachment even if the claim or the grounds for the attachment have not been substantiated, provided that security is provided to mitigate the potential disadvantages facing the opposing party. This provision applies mutatis mutandis to interim injunctions via Section 936 of the German Code of Civil Procedure (ZPO). However, the provision of security does not replace either an admissible application or a sound legal basis for the claim. Whether security is required is at the court’s discretion.

The court may, however, require security even where the claim and the grounds for the protective measure have been substantiated. This is intended to compensate for any losses should the measure subsequently prove to be unjustified. The amount required may be substantial, particularly in the case of measures affecting businesses. The applicant must therefore clarify at an early stage whether a bank guarantee or cash deposit can be made available at short notice. A successful order in substance is of little use if the security ordered cannot be provided in time.

Security also plays a role for the opposing party. In the case of an attachment, pursuant to Section 923 of the German Code of Civil Procedure (ZPO), a sum of money must, in principle, be specified in the attachment order; the deposit of this sum suspends enforcement and enables the lifting of an attachment that has already been enforced. Furthermore, under Section 927 of the German Code of Civil Procedure (ZPO), a subsequent offer to provide security may also constitute grounds for an application to set aside the order on the basis of a change in circumstances. In the case of injunctions or provisions under company law, however, the protected status cannot simply be replaced by money.

Why is enforcement just as important as the order itself?

The proceedings are not concluded with the court order. The attachment and the interim injunction must still be duly enforced. The one-month enforcement period set out in Section 929(2) of the Code of Civil Procedure (ZPO) is a strict deadline: once it has expired, enforcement of the attachment order is no longer permitted. Pursuant to Section 936 ZPO, this also applies to interim injunctions.

Where a foreign security order can be enforced in Germany without a prior declaration of enforceability, the time limit under section 929(2), second sentence, of the German Code of Civil Procedure (ZPO) is two months. This special rule must not be confused with the general time limits for the recognition and enforcement of foreign judgments on the merits.

The action required to meet the time limit depends on the content and form of the decision. In the case of an injunction, service by the parties is generally required. An attachment order may be enforced by way of attachment or the registration of a security mortgage. Errors in service, the provision of security or the enforcement order may result in a title that is correct in substance losing its effect.

For this reason, enforcement should be planned before the application is submitted. Where possible, bank account details, assets, delivery addresses and any necessary translations must be known in advance. In cross-border cases, it must also be checked whether and how the German protective measure can take effect abroad.

What risks does the applicant face?

An interim measure often has a profound impact on business operations. If it is subsequently lifted or proves to be unjustified from the outset, the applicant may be liable to pay compensation for the damage caused by its enforcement in accordance with Section 945 of the Code of Civil Procedure (ZPO). This risk relates not only to the direct costs but also, depending on the case, to lost business or business interruptions.

Before filing an application, therefore, one should not only assess the legal prospects of success. Equally important are the economic consequences of the proposed injunction, the extent of any potential counter-damages, and the question of whether the same objective can be achieved through a more limited measure. A precisely worded application is generally more effective and carries less risk than a comprehensive injunction, the scope of which is difficult to control at a later stage.

The communication implications are also significant. For example, a freeze on business accounts or a court-imposed sales ban can alarm banks, customers and business partners. The procedural strategy should therefore encompass internal communication, external statements and alternative operational measures.

How does the objection under Section 924 of the German Code of Civil Procedure (ZPO) work?

Pursuant to Section 924 of the German Code of Civil Procedure (ZPO), the respondent may lodge an objection to an attachment ordered by a court order. In accordance with Section 936 ZPO, this also applies in principle to an interim injunction issued by a court order. The objection must set out the grounds on which the measure should be set aside or restricted. The court will then, of its own motion, set a date for an oral hearing.

An objection does not automatically result in the measure being suspended pending the decision. The obligations set out in the order must therefore be complied with for the time being, unless a judicial suspension, restriction or revocation is obtained. If the interim injunction was granted by judgment, the appeal is governed not by Section 924 of the German Code of Civil Procedure (ZPO), but by the rules on appeals applicable to judgments.

How can the filing of the main action be enforced under Section 926 of the German Code of Civil Procedure (ZPO)?

If the main action is not yet pending, the respondent may, pursuant to Section 926(1) of the German Code of Civil Procedure (ZPO), apply for the claimant to be given a time limit within which to bring the main action. Pursuant to Section 936 of the German Code of Civil Procedure (ZPO), this provision also applies in interim relief proceedings. This mechanism prevents a provisional measure from remaining in force indefinitely without the underlying claim being examined in ordinary proceedings.

If the claimant does not bring the main action within the time limit set by the court, the measure must, pursuant to Section 926(2) of the German Code of Civil Procedure (ZPO), be set aside by a final judgment upon application. In practice, it is therefore important to monitor the time limits reliably and to identify the main action correctly. Proceedings that are inadequate or brought before the wrong court cannot reliably prevent the measure from being set aside.

How does the other party respond to an interim measure?

Once a court order has been served, the first step is to clarify which actions must be taken or refrained from immediately. Breaches of an injunction may result in the imposition of coercive measures. At the same time, the available defences should be examined.

How is an application for interim relief prepared?

The first step is to provide a concise chronology: what has happened, when did it come to light, and what specific harm is likely to ensue next? On this basis, the claim, the grounds for the urgent application and the legal remedy sought are set out. The application must be worded clearly enough to ensure that the court, the bailiff and the respondent can unambiguously identify what conduct is required or prohibited.

The supporting documents should directly substantiate the statement of facts. Important emails, contracts, extracts from registers and screenshots must be included in the annexes in a structured manner. Technical or accounting matters must be explained in a way that is easy to understand. In corporate disputes, the articles of association, the shareholders’ agreement, the invitation, the agenda and the documents relating to the resolution are generally of central importance.

Finally, plans must be made for the period following the granting of the injunction. The provision of security, service of the order, enforcement and possible reactions from the opposing party often take place within a matter of hours or days. A well-drafted application for an interim injunction is therefore part of a comprehensive action plan and not an isolated measure.