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Mandatory instructions of the Supreme Court of Cassation in case of account preservation order

By a decision enacted on com. c. № 3129/2015 to the inventory of the Supreme Court of Cassation (SCC), Commercial Division, Second Section, the supreme judges responded to some issues of relevance to the practice regarding the effect of the account preservation order on claims on payment accounts. The proceedings are under art. 290 of CPC, i.e. the court decision is binding for first instance and appellate courts/ and the Sofia appellate court is admitted to appeal on the grounds that the questions that are raised are of importance for the correct application of the law as well for its development.

The first question that SCC has examined is “what is the time action of the account preservation order, from which moment and how long?”. The supreme judges explicitly declare that the account preservation order on a payment account is deemed to have been enforced and has effect from the day on which the notice of the account preservation order has been delivered by the enforcement agent to the bank until the date of the payment of the debtor’s obligations, realization of the enforcement method and satisfaction of the creditor, respectively – until the cancellation of the security measure, replacement of the security measure with another, lifting of the account preservation order or termination of the enforcement proceedings.

Another controversial issue, which has been explicitly answered by the decision, is related to the scope of the account preservation order – whether it extends to the amounts available on the imposition or on subsequent receipts.  According to the three-member panel of the SCC, TC, Second Section, the account preservation order has effect on the debtor’s bank account to the amount specified in the preservation order, both on the amounts available at the time of imposition in the debtor’s bank account and on the subsequent receipts. It is also important to clarify that the account preservation order does not apply to amounts exceeding the amount specified in the order.

In the event that the debtor’s payment account is insufficiently available, the account preservation order shall be deemed to have been imposed on the date of delivery of the order notice to the bank, but the realization of the enforcement method will only be possible after subsequent receipts on the account. For that reason, the decision explicitly states that until the final satisfaction of the creditor, the bank as a third party is obliged to make payments from the payment account held by the bank under an order or with the prior consent of its holder.

 

author: Kristina Vezenkova

Posted in Uncategorized