Legal Definitions - arrestment

Arrestment refers to the legal process of seizing or securing property, particularly in Scots law, where it involves property belonging to one person but held by a third party. Its primary purposes are either to ensure a debt can be paid (security) or to establish a court's authority to hear a case (jurisdiction).

While in general English, "arrestment" can mean the act of stopping or checking something, or the arrest of a person, its specific legal application often relates to the attachment of assets. This process is similar to what is known as "garnishment" in other legal systems, where a third party (like a bank or employer) is ordered to withhold funds or assets from a debtor.

There are several contexts in which arrestment of property can occur:

• Arrestment in Security (Pre-Judgment)

  This occurs before a court has made a final decision on a debt. If a creditor believes a debtor might try to hide assets or leave the country to avoid paying a potential judgment, they can ask the court to "arrest" or freeze certain assets held by a third party. This ensures that if the creditor wins their case, there will be assets available to satisfy the debt.

  • Example: A small business owner, Mr. Henderson, is suing a former client, Ms. Davies, for a significant unpaid invoice. Mr. Henderson learns that Ms. Davies is planning to sell her house and move abroad before the lawsuit is resolved. Fearing she might transfer all her funds out of the country, Mr. Henderson's lawyer applies for an arrestment in security on Ms. Davies' bank account, which is held by her local bank. If granted, the bank would be legally required to freeze a specified amount in her account, preventing her from moving it until the court case concludes.

    Explanation: This example illustrates arrestment being used before a judgment to secure potential payment. The bank is the "third party" holding Ms. Davies' funds, and the arrestment ensures those funds remain available as security for the debt Mr. Henderson claims is owed.

• Arrestment in Execution (Post-Judgment)

  This type of arrestment happens after a court has already issued a judgment, ordering a debtor to pay a specific amount. If the debtor fails to pay, the creditor can use arrestment to seize assets belonging to the debtor but held by a third party (such as wages, bank accounts, or payments due from another party) to satisfy the judgment.

  • Example: A court has ordered a construction company, "BuildFast Ltd.," to pay £50,000 to a subcontractor, "Precision Plumbing," for breach of contract. BuildFast Ltd. refuses to pay. Precision Plumbing's lawyers discover that BuildFast Ltd. is due a large payment from a major client, "City Developments PLC," for a completed project. Precision Plumbing can seek an arrestment in execution against the funds held by City Developments PLC that are owed to BuildFast Ltd. The court would then order City Developments PLC to pay the £50,000 directly to Precision Plumbing instead of to BuildFast Ltd.

    Explanation: Here, the arrestment occurs after a judgment has been made. City Developments PLC is the "third party" holding funds belonging to the debtor (BuildFast Ltd.). The arrestment allows Precision Plumbing, the creditor, to collect the judgment directly from those funds.

• Arrestment to Found Jurisdiction

  This is a specific use of arrestment to establish a court's legal authority (jurisdiction) over a case, particularly when the debtor is a foreign entity or individual who does not have a strong connection to the local legal system. By arresting property belonging to the foreign debtor but located within the court's jurisdiction (and held by a third party), the court gains the power to hear the dispute.

  • Example: A Scottish software development firm, "Caledonian Code," enters into a contract with a company based in another country, "Global Tech Solutions," which has no offices or assets in Scotland. Global Tech Solutions breaches the contract, causing Caledonian Code significant losses. Caledonian Code discovers that Global Tech Solutions is owed a payment from a Scottish client, "Highland Innovations Ltd." To bring a lawsuit against Global Tech Solutions in a Scottish court, Caledonian Code can apply for an arrestment to found jurisdiction on the payment held by Highland Innovations Ltd. This act of seizing the asset within Scotland allows the Scottish court to assert its authority to hear the case against the foreign company.

    Explanation: This example demonstrates arrestment being used not primarily for security, but to give the Scottish court the power to hear a case against a foreign debtor. Highland Innovations Ltd. is the "third party" holding the asset (the payment) within the Scottish court's jurisdiction, thereby creating a link that allows the court to proceed.