Definition and Fundamentals of the Arrest Lien
The arrest lien is an important security instrument in German civil procedure law. It is a statutory security lien ordered in the course of the arrest proceedings pursuant to §§ 916 et seq. of the German Code of Civil Procedure (ZPO) over movable property, claims, or other property rights of the debtor. The purpose of the arrest lien is to secure the enforcement of the arrest and to enable third parties to protect their legal position in relation to assets seized by arrest.
Statutory Basis
Code of Civil Procedure (ZPO)
The statutory provisions on arrest, including the arrest lien, are set forth in §§ 916 to 934 ZPO. Central to the arrest lien is the provision of § 930 ZPO, which regulates the details of the enforcement of the arrest by levy of execution and structures the creation of the arrest lien.
Relationship to Other Security Rights
The arrest lien must be distinguished from other security rights, in particular the pledge lien resulting from compulsory enforcement. While the pledge lien arises in the context of compulsory execution (§§ 803 et seq. ZPO), the arrest lien is a special protective measure prior to actual compulsory enforcement and serves to secure the claim before a legally binding enforcement title has been obtained.
Creation of the Arrest Lien
Order for Arrest
The prerequisite for the creation of an arrest lien is the court order of the arrest (§ 916 ZPO). The court issues an arrest order when a ground for arrest and a claim for arrest are demonstrated.
Enforcement of Arrest
The mere ordering of the arrest does not yet create an arrest lien. It only arises upon enforcement of the arrest. Enforcement generally takes place pursuant to §§ 930, 932 ZPO by attachment of the movable property or by attachment of claims and other rights.
Attachment of Movable Property
Attachment of tangible objects is carried out by their removal and safekeeping (§§ 930, 808 ZPO).
Attachment of Claims and Other Rights
Claims and intangible rights are attached through service of the attachment order on the third-party debtor and the arrest debtor (§ 930 para. 2, § 829 ZPO).
Content and Effect of the Arrest Lien
The arrest lien establishes a security interest in the attached property in favor of the arrest creditor. Its essential purpose is to secure access to the debtor’s assets and to prevent later enforcement of the claim by compulsory execution from being thwarted.
Legal Position of the Arrest Creditor
Upon creation of the arrest lien, the creditor obtains a security in rem. In terms of priority, the arrest lien ranks below any prior rights, such as retention of title or already established liens.
Security Effect
The arrest lien prevents the debtor from freely disposing over the attached property, i.e., any such disposal is ineffective against the arrest creditor to the extent it impairs their rights (§ 136 BGB applied analogously).
Priority and Multiple Enforcement
If there are several arrest liens or competing liens (e.g., from arrest and compulsory enforcement), their priority depends on the time of their respective enforcement. The party who enforced their lien-protected right first has priority. Double attachments result in the distribution of proceeds according to the order of priority of the individual liens.
Termination of the Arrest Lien
The arrest lien is generally terminated by
- Revocation of the arrest by the court,
- Extinguishment by satisfaction of the secured claim,
- Cessation of the pledged property (e.g. destruction of the item),
- Conversion into a final enforcement lien in the event of a final and binding title (§ 930 para. 4 ZPO).
With final security or payment of the proceeds after the realization of the pledged object, or when the need for security ceases to exist, the arrest lien loses its effect.
Legal Protection and Remedies
Against the order and enforcement of the arrest, and thus indirectly against the arrest lien, the debtor has various legal remedies available, in particular
- Objection (Erinnerung) to compulsory enforcement (§ 766 ZPO),
- Protection against enforcement under § 765a ZPO,
- Objection to the order for arrest.
Third parties whose rights are affected by the attachment may also file a third-party objection claim (§ 771 ZPO).
Arrest Lien in an International Context
In cross-border legal relations, it should be noted that the German arrest lien may become significant for recognized and enforceable arrest orders under the Brussels Ia Regulation and other international treaties. The national law of the place where the security measure is carried out determines the validity and scope of the arrest lien.
Arrest Lien and Insolvency
If, after an arrest lien has been established, insolvency proceedings are opened over the debtor’s assets, the arrest lien becomes a right of separation, ranking after the insolvency estate creditors but generally remains secured once validly established.
Summary
The arrest lien is a significant security instrument in German civil procedure law. It protects the creditor through early safeguarding against transfers of assets by the debtor and facilitates preferential satisfaction in the event of later enforcement. The arrest lien arises upon court order and actual enforcement of the arrest, creates a security in rem, and ends with revocation, extinguishment, or conversion into a final lien. The statutory provisions, in particular §§ 916 et seq. ZPO, comprehensively govern the requirements, creation, effects, and termination of the arrest lien. In practical legal transactions, the arrest lien plays a central role in securing endangered claims.
Frequently Asked Questions
When and how does an arrest lien arise?
An arrest lien arises when, by means of a court order for arrest combined with enforcement, a security interest is established over specific assets of the debtor. The arrest lien is a security instrument applied in civil proceedings to safeguard enforcement against the debtor’s assets before a final judgment is issued. The statutory basis is §§ 916 et seq. ZPO, especially § 930 ZPO for movable property and § 932 ZPO for claims and other rights. The actual lien does not arise upon issuance of the arrest order, but only with its proper enforcement, e.g., by removal (in the case of movables) or by service of the arrest order and the attachment order (in the case of claims and rights) upon the respective third-party debtors in strict compliance with procedural requirements. The arrest lien is always a provisional security right and remains in force until the end of the security procedure or until a final decision in the main proceedings.
What kinds of assets can be subject to an arrest lien?
The arrest lien can be established over both movable and immovable assets, as well as claims and other property rights. With movable assets, security is usually provided by removal or safekeeping, while for immovable assets a seizure in the land register is also possible. Claims and rights—such as bank account balances or company shares—are subjected to arrest by service or attachment. The decisive factor is that these are assets belonging to the debtor and generally subject to enforcement. Certain unattachable items (pursuant to § 811 ZPO) are, however, exempt from arrest.
What rights and obligations does the creditor have in connection with the arrest lien?
The creditor has the right, upon proper establishment of the arrest lien, to claim preferential satisfaction from the attached object, provided an enforceable title is later obtained against the debtor. However, the creditor must promptly proceed with the enforcement of the arrest and, if so ordered by the court, provide security deposits (e.g., to avert claims for damages by the debtor should the arrest later be lifted). In addition, the creditor is obliged to handle the attached object with care and may not dispose of it on their own authority; realization is only permitted after successful completion of the main proceedings and with an enforceable title.
What legal remedies are available to the debtor against the creation of an arrest lien?
The debtor has various legal remedies against the order of arrest and the enforcement of the arrest lien. They may lodge an appeal against the arrest order itself (§ 793 ZPO). Moreover, they may contest the manner of enforcement, especially if enforcement does not comply with statutory requirements. The so-called counterclaim or an application for termination of the arrest under § 924 ZPO (application for termination or modification of the arrest) is also possible, e.g., if the debtor deposits security in the amount of the claim or demonstrates that the requirements for the arrest are no longer met. Furthermore, they may claim damages if the arrest subsequently turns out to be unlawful (§ 945 ZPO).
What is the effect of the arrest lien in the event of the debtor’s insolvency?
In the event of insolvency, the arrest lien generally remains effective as a security right if it was validly established before insolvency proceedings commenced. The arrest creditor thus assumes the position of a preferential creditor in the insolvency proceedings (§ 50 InsO). They are thus entitled to preferential satisfaction from the assets secured by the arrest lien. However, the insolvency administrator may initially prohibit realization if it would interfere with the proper conduct of the insolvency proceedings. So-called insolvency challenges (especially under §§ 130 et seq. InsO) may also be possible if the arrest lien was ordered during a critical period prior to the insolvency filing.
Can the arrest lien be replaced or superseded by enforceable titles?
The arrest lien is generally a provisional security right and serves to secure subsequent compulsory enforcement. If the creditor acquires an enforceable title (e.g., a final judgment or enforcement order), the arrest lien can be converted into a final enforcement lien. This means the creditor can seamlessly continue compulsory enforcement against the secured assets. Conversely, the arrest lien lapses if the creditor loses the principal case or the arrest is lifted.
What is the priority effect of the arrest lien in relation to other liens?
The arrest lien generally ranks equally with other security rights, subject to the principle of priority: the right established first has precedence. If another lien is established over the same object after the arrest lien, the older right has priority. In insolvency, the order of satisfaction is governed by the general insolvency law provisions, in particular §§ 49, 50 InsO, according to which proprietary rights and arrest liens are given priority. The arrest lien thus operates as a barrier against subsequent creditors but may be limited in enforceability by a pre-existing lien (e.g., a land charge of a bank).
