Meaning
A judicial enforcement measure used by Chinese courts to freeze, seize, or seal a debtor’s assets during or before a lawsuit. Plaintiffs apply for property attachment to prevent the transfer or dissipation of assets that could be used to satisfy a future judgment. This process covers bank accounts, real estate, machinery, and equity in domestic companies.
It ensures that the litigation outcome can be executed.
Execution Method
Enforcement officers carry out the order by delivering notices to banks, registers, and the defendant’s premises. In the execution of property attachment, bank accounts are frozen digitally, while physical assets like factory machinery are sealed with paper strips. These strips warn of criminal penalties for anyone who tampers with the attached goods.
This immediate action prevents the unauthorized use of the equipment.
Asset Valuation
Courts must align the value of the secured assets with the amount of the claim. To prevent excessive property attachment, judges evaluate the registered value of the real estate or the balances of the frozen accounts. If the value of the attached property exceeds the claims by a significant margin, the debtor can petition the court to release the excess portion.
This balance protects the operating survival of the defendant’s business, especially when bank accounts are frozen during peak manufacturing periods.
Release Condition
Removal of the judicial freeze requires specific legal actions. The defendant can secure the release of property attachment by providing an equivalent counter-guarantee. Settlement of the underlying dispute also triggers the dissolution of the order.
