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2017-10-doc8 AB of DigiTrage

For around a year now, I am chairman of the Advisory Board of DigiTrage (Digital arbitration in debt collecting cases). The organisation (see will publish an interview with me. See for its questions and my answers below: Can you say something about your background? I have been a lawyer for over 40 years, and a professor of civil law, commercial law and international insolvency law for over 25 years (fulltime, later part time). This was between 1988 – 2008 at the VU University Amsterdam and from 2007 – 2014 (also one day per week) as professor of international insolvency law at the Leiden University. It is not common knowledge, but I was able to really make a living via my principal activity during the past 25 years: (international) commercial-legal advisor, the first 13 years as partner of global services provider Ernst & Young (now: EY). I have also had management positions there between 1995 and 2003, with 5 years at an international board position. Since 2005 I had my own commercial (international) advice, opinion and arbitration practice, mostly focusing on the area of (international) restructuring and insolvency of banks and companies. I retired in March 2014 (in the world of universities they call this: accorded emeritus status) and during 2016 I have ended my commercial advice practice. I have a number of national and international advisory functions and I am still scientifically active. What study have you done and why? Aha, good question to give some background. In a lot of professional areas you can study your whole life. Because of my pre-education (HBS), not all study areas were available to me. In secondary education – we’re talking about the second half of the 60’s! – I was interested in economy and – as we called it then – commercial knowledge. If you go in this direction you quickly end up with a legal study, at the VU in Amsterdam, also practical because it was close to Haarlem, where I lived in those days. So I am master of laws (1974, VU Amsterdam; Dutch law), and next to my commercial-legal advisory function I also completed a notarial study in 1977. And yes, life-long learning: in the beginning of the 80’s I wrote about a then unknown phenomenon, the foundation as legal entity and fiscal rulings and agreements with the tax authorities. For my promotion to doctor in law in 1988 (subject ‘Natural obligations. Civil and fiscal law observations about obligations unenforceable by law’) I dived deep into the foundations of the meaning and justification of legal commitments. Continuously collecting knowledge and developing myself further, those are examples of what I did to prepare for the transfer for what then was called the new Netherlands Civil Code, the international contracts and structures that you are confronted with within Ernst & Young, the ‘Anglicization’ of the advisory practice, the influence of the millennium-bug in 2000 and the euro in 2002 on running contracts, the legal concepts that were created by privatization, the more recent rule machine of financial law, the constantly changing and developing technology, which does not just change the legal subjects, but also has a structural impact on working in a legal practice or for example my knowledge about the international insolvency law. Twenty years ago you could fit this in a matchbox, now I can easily write 2 books about it, in English, with over 1500 pages. Learning, from developments, from others, that’s something you do every day. What functions do you have at the moment, and what is involved in its work/tasks? Recently I have, together with my German colleague Stephan Madaus, presented a large report on ‘Rescue of Business in Insolvency Law’ for European Law Institute (ELI), with over 100 recommendations for EU member states and the European Commission of the EU, to make the process of saving companies in financial trouble significantly more efficient and effective. Since 2016, I have been chairman of CERIL, Conference of European Restructuring and Insolvency Law, an independent European think tank which strives for the improvement of the laws and practices related to restructuring and insolvency in the EU and its member states. I am advisor with ELI for the project ELI-UNIDROIT (The International Institute for the Unification of Private Law, Rome) ‘European Rules of Civil Procedure’, which focuses on the development of a European model for standardized rules of civil procedures. A few functions have been going on for longer: member of the Joint Board of Appeal of the three European supervisors of the financial markets (EBA, ESMA, EIOPA), advisor of the European Commission concerning restructuring and insolvency law and the chairmanship of the SER/Coordination Consultation Selfregulation, Consultation Group Banks and Notaries. Results of these consultations are, among other things, General service conditions Notaries 2014 and the General bank terms and conditions of 2017. But I think the legal world in Holland mostly knows me as the author of 'Insolventierecht' (Insolvency law), a 10 volumes series that has been published since 1999. This month the last part will be released in its 4th edition. In the near future I will start to prepare to write the fifth edition of this series within five or six years, because there is a lot of interest for it in the legal practice and I like doing it. What was the reason that you joined the Advisory Board of DigiTrage? You are asked to contribute to a new form of dispute resolution. This suited my experience and interests. Between 1988 and 2016 I was deputy justice in the Court of Appeal in The Hague and since 1987 I was an arbitrator, and since 2000 chairman, of the Standing Disputes Committee of Achmea related to life and pension insurances. Aside from that I have handled various arbitrations, as an independent arbitrator not connected to an institution. This knowledge can come in handy when helping to develop a relatively young organization like DigiTrage. The Advisory Board supports DigiTrage in realizing what we see as the core values of dispute resolution. And also how these can be guaranteed in this world of growing importance of electronic information and communication. Of course this influences the usual dispute resolution. Doesn’t it? Of course, stable dispute resolution, the way we know it from the past, is under pressure. In various sectors there are already preventive efforts to avoid disputes (via mediation and on-line dispute resolution), in other sectors, threshold-lowering mechanisms are used (a broad pallet of dispute committees). For international financial disputes, the position of London (because of Brexit) comes under pressure. Singapore and Frankfurt are warming up by the sidelines. I would also think of Amsterdam, but when I look at the slow process of establishing a Netherlands Commercial Court (NCC), this seems too ambitious. For international trade disputes, this NCC will go to work in Amsterdam, I believe from 1 January 2018. Aside from a few judicial obstacles, in some international cases the court registration fees in the first instance (€ 15,000; in interim injunction € 7,500) and in appeals (€ 20,000; in interim injunction € 10,000) can have a prohibitive effect. It can also take a while before this Court functions, because parties will have to adopt a forum choice for the NCC in their agreement. Furthermore, this new arrangement does not apply to cases which fall under the authority of the district judge. So he will remain the have jurisdiction for international agency contracts or the rent of expensive machines or ships. In the Netherlands, a slow but sure switch is being made to ‘mandatory digital procedures’. From 1 September 2017, a lawyer litigates for a big number of cases digitally to the courts of Gelderland and Midden-Nederland in redress cases with mandatory legal representation (with an interest of more than € 25,000). This manner of procedure requires, with clients, lawyers and judges, some getting used to, but it has to lead to procedures becoming simpler, quicker, clearer and more accessible. In a digital file it can always be checked what the current status is. All-in-all, it is a significant challenge for judicial professionals. How do you see the future for digital arbitration in general, and DigiTrage especially? DigiTrage belongs, I think, in the category of innovators and early adopters of digital dispute resolution, via a model supported by arbitration, for the big market of relatively smaller, national disputes. This market seems fairly homogenous: a party desires payment of his claim, as a regular creditor. The past few years, the costs of the legal system have risen significantly. Consequently – however difficult - a corporate decision was taken: no litigation, but write off that claim! Of course strategic behavior of opportunistically acting debtors is looming. A debtor assesses the chance that he (she) will not be the target of its creditors. It is crystal clear that waiving of recovery can lead to liquidation problems. A digital arbitration court, which is faster, cheaper and because of her digital nature has a lower threshold than a national court, can then be a solution. For a lot of transactions, the ordering of goods, booking of concerts or bank transfers, online is the standard, so why not resolve a dispute digitally? Parties, or their digitally versed lawyers, then have to make sure however that contracts or general terms and conditions include a DigiTrage-clause.

2017-10-doc7 Supreme Court of Gibraltar on COMI

Gregory Hugh Colin King is a fraudster. That’s verbatim the way the Supreme Court of Gibralter on 31 July 2017 introduces one of the first cases to which the EU Insolvency Regulation 2015 (EIR 2015) applies. King was a lawyer and a Glasgow car dealer, before becoming a hedge fund manager in Gibraltar. He is, via several of his companies or companies he controls, alleged to have defrauded investors of over US$600 million in a sham concerned with a hedge fund (Heather Capital Ltd), the liquidator of which (Mr. Duffy), was a supporting creditor. This case only concerns a slice of the fraud, £6 million of one of the victims, Advalorem Value Asset Fund Ltd (Advalorem). The court explains that in an earlier judgment, dated 12 January 2017, it gave the liquidator of Advalorem permission to serve a statutory demand on King in Spain as well as giving permission to serve an application for a bankruptcy order out of the jurisdiction on Mr King’s residence or at least the place where he was residing, near Marbella. The questions the Court has to solve: 1 Did the court have international jurisdiction in the meaning of Article 3 EIR 2015 in a case where the filing for bankruptcy dated from 5 June 2017, so from three weeks prior to the date the EIR 2015 came into force, i.e. on 26 June 2017. This also touches upon the question whether the earlier judgment of 12 January 2017 is a judgement ‘opening’ insolvency proceedings in the meaning of Article 2(7), including the question of the ‘time of the opening of the proceedings’, in the meaning of Article 2(8) EIR 2015; 2 If the EIR 2015 applies, which rules establish and determine the debtor’s centre of main interest (COMI). The first question is a question of transitional law. Article 84 EIR (‘Applicability in time’) provides in paragraph 1 that the provisions of the EIR 2015 shall apply only to insolvency proceedings opened after 26 June 2017, and in paragraph 2 that the (old) Insolvency Regulation, although repealed (Article 91 EIR 2015), shall continue to apply to insolvency proceedings which fall within the scope of that Regulation and which have been opened before 26 June 2017. In order to determine whether proceedings were ‘opened’ before or after the entry into force the precise meaning of the wording ‘time of opening of proceedings’ must be determined. A ‘judgment opening insolvency proceedings’ (see Article 2(7) EIR 2015), includes (i) the decision of any court to open insolvency proceedings or to confirm the opening of such proceedings; and (ii) the decision of a court to appoint an insolvency practitioner. The court is satisfied the definition of ‘judgment opening insolvency proceedings’ and the ‘time of the opening of the proceedings’ (see Article 2(8) EIR 2015), i.e. the time at which the judgment opening insolvency proceedings becomes effective, regardless of whether the judgment is final or not, resulted in the point of view that the court had to apply the EIR 2015. It is appreciated that indeed the criterion is not the date of an application for insolvency, but the date op the decision of opening the insolvency proceedings itself is determinative. Then the second question. Typically, when there is a scotsman living in Spain and doing business in Gibralter, the COMI question – detemining the court’s international jurisdiction – pops up. The question is whether King, as a natural person, falls under the scope of Article 3 (‘International jurisdiction’), the third and fourth subparagraph: in the case of an individual exercising an independent business or professional activity, the COMI shall be presumed to be that individual’s principal place of business in the absence of proof to the contrary. That presumption shall only apply if the individual's principal place of business has not been moved to another Member State within the 3-month period prior to the request for the opening of insolvency proceedings. In the case of any other individual, the COMI shall be presumed to be the place of the individual's habitual residence in the absence of proof to the contrary. This presumption shall only apply if the habitual residence has not been moved to another Member State within the 6-month period prior to the request for the opening of insolvency proceedings. The Gibraltar Supreme Court was satisfied on the basis of the evidence that the debtor did carry on his business through companies in Gibraltar and that these companies appeared to be mere extensions used for fraudulent activities. The evidence (provided by the petitioning creditor) included (i) that King owned assets in Gibraltar, (ii) that within the period of three years prior to the date of his affidavit he had carried on business in Gibraltar, either personally or by means of an agent had cash assets in Gibraltar, (iii) that he was the ultimate beneficial owner of various Gibraltar companies, (iv) that has and has had significant interest in connection with many companies in Gibraltar, (v) that he was listed as a director of Gibraltar Assets Management Ltd, a company incorporated in Gibraltar which was a member of the London stock exchange, (vi) that he was party to a loan agreement where the governing law was Gibraltarian law, (vii) that for a limited period between May and July 2007, he may have lived at an address in Gibraltar. The court also assesses various information from third party sources (including press articles in the Wall Street Journal, the Sunday Herald, the Scottisch Financial News and the Sun, mentioning that Pope Benedict XVI had given King an honour in a ceremony in Gibraltar, be it in 2008). This all is easily ascertainable by a third party. The court concludes: ‘So it can be seen if the applicant for the bankruptcy order shows that the respondent exercises an independent business or professional activity in Gibraltar, Gibraltar will be the centre of main interest. If it is not, then the fourth sub paragraph applies and the centre of main interest will be Spain.’ The latter view is, formally, incorrect, as it is not for a Gibraltar court to decide whether COMI can be established in another member state, in this case Spain. Professor Bork (EWiR 18/2017) indicated that as far as he can oversee this is the first court case under the EIR 2015. In the game of ‘who is the first’, I put my cards on District Court Amsterdam 12 July 2017, ECLI:NL:RBAMS:2017:5383, leaving aside that on 14 October 2015 a Dutch court already aplied the EIR 2015 by way of anticipation, see this blog under 2015-10-doc16. Advalorem Value Asset Fund Ltd v Gregory King, Supreme Court of Gibraltar, 2016/COMP/039 More on the judgment opening insolvency proceedings (para. 10521b), on international jurisdiction regarding natural persons (para. 10588 et seq) and concerning Article 84 (para. 10934c) in my book International Insolvency Law Part II. European Insolvency Law (Wessels Insolvency Law Volume X), Deventer: Kluwer, 4th ed., 2017, ISBN 9 789013 145021. For information, see  

2017-10-doc6 Polak-Pannevis, Insolventierecht, 14e druk, 2017

De laatste 20 jaar verscheen van het boek Polak/Pannevis, Insolventierecht, om de 3 jaar een nieuwe druk. In september 2017 verscheen de 14e druk van het boek dat tot 2011 de titel ‘Faillissementsrecht’ had. Voorwaar een prestatie van formaat. De titel van het boek is wel, maar de opzet is niet gewijzigd. Dus wordt de gehele stof aan de hand van de Faillissementswet beschreven, en waar nodig wordt aanverwante wet- of regelgeving besproken, met veel aandacht voor rechtspraak van de Hoge Raad, maar ook lagere rechtspraak komt aan bod. Dit alles is verwerkt tot 1 mei 2017; een enkele actualiteit van daarna is nog verwerkt. Het accent ligt in het boek op het materiële insolventierecht. Aandacht is er zodoende voor alle belangrijke onderwerpen, van afkoelingsperiode, boedel, bestuurdersaansprakelijkheid, curator tot verrekening, verificatie, vereffening en wederkerige overeenkomsten. Ook wordt in enkele bladzijden de herschikte EU Insolventieverordening besproken. De bewerker geeft aan dat stapje voor stapje het insolventierecht wordt herschreven. Hij bespreekt onder meer de onlangs aangepaste onderdelen van de wet, zoals het civielrechtelijk bestuursverbod en de informatie- en meldings- dan wel aangifteplicht omtrent onregelmatigheden rond het faillissement. Het boek kenmerkt zich door een systematisch samenvatting van wet en rechtspraak, die als toelichting daarop dient. Het heeft een gidsfunctie voor hen die zich binnen de studie of voor een beroep het insolventierecht eigen moeten maken. Het bevat uitvoerige registers op wetsartikelen, rechtspraak en trefwoorden, een voorbeeld van een uitdelingslijst en een lijst van afkortingen (waarin verrassenderwijs als afkorting voor mijn naam wordt gebruikt: BWS). Het boek vormt een deugdelijke introductie tot het insolventierecht, maar een ‘inleiding’ is het, met ruim 500 bladzijden, niet. Dat maakt het weinig geschikt voor educatieve doeleinden. Het is een gedetailleerd naslagwerk, dat vaak wordt aangehaald, in de vakliteratuur en in conclusies genomen door het parket bij de Hoge Raad, hoewel het boek een kritische bespreking van de rechtspraak van de Hoge Raad, discussie met verschenen literatuur en beschouwend commentaar op wetgeving mist. Een voorbeeld. Naast de vanouds bestaande taak van beheer en vereffening van de boedel (art. 68 lid 1 Fw) van de curator heeft de ‘wet versterking positie curator’ per 1 juli 2017 geleid tot een op haar/hem rustende informatie- en meldings- dan wel aangifteplicht van (kortweg) faillissementsfraude (art. 68 lid 2 Fw). Een evaluatie van deze verplichting binnen de algemene taak van de curator, van de doelen die met deze nieuwe verplichting worden gediend (‘poortwachtersfunctie’) en de inherente spanning met het algemene crediteurenbelang dat met een faillissement centraal staat ontbreekt. Dat is jammer omdat daarom het boek daarom als leerboek voor universiteiten weinig geschikt is. Voor de rechtspraktijk dient het als beredeneerd compendium van wetgeving en rechtspraak. Voor het assisteren bij het oplossen van uitdagende, complexe vraagstukken is het boek door het gemis van verwerking van literatuur en commentaar niet goed bruikbaar. Het is spijtig dat de auteur, die vele jaren ervaring in het vakgebied heeft, niet de gelegenheid te baat heeft genomen om niet alleen de titel van het boek, maar ook de opzet van het boek te wijzigen en zijn eigen stempel te zetten. N.J. Polak, Insolventierecht, bewerkt door M. Pannevis, 14e druk, Deventer: Wolters Kluwer 2017. Nadere informatie via  

2017-10-doc5 Regeerakkoord 2017-2021 over aanpak schulden

In het regeerakkoord 2017-2021 staat onder de kop 'Zekerheid en kansen in een nieuwe economie' op p. 27 een hoofdstuk, getiteld 'Terugdringen van schulden en armoede'. De passages luiden als volgt (nummering heb ik erbij gezet): "Eén op de tien huishoudens heeft problematische schulden. Daarnaast loopt een grote groep het risico om problematische schulden te krijgen. Het kabinet wil het aantal mensen met problematische schulden terug dringen en mensen met schulden effectiever te helpen. 1 Schuldhulpverlening is en blijft een gemeentelijke verantwoordelijkheid. Via programmatische afspraken wenst het kabinet met gemeenten tot een vernieuwende schuldenaanpak en een verbeterd schuldhulpverleningstraject te komen. Hierbij kunnen de volgende thema’s aan bod komen: 1.1 Verbeteren van de (toegang tot) schuldhulpverlening, met kortere wachttijden. 1.2 Beter samenwerken met andere partijen om onnodig oplopen van schulden te voorkomen. 1.3 Voorkomen van uithuisplaatsingen, zeker als daar kinderen bij betrokken zijn. 1.4 Ruimte geven aan gemeenten om op lokaal niveau met vernieuwende aanpakken en maatwerk te experimenteren. 2 De overheid heeft als schuldeiser een bijzondere verantwoordelijkheid om onnodige vergroting van schulden te voorkomen. De overheid dient de beslagvrije voet te respecteren. Om escalatie van schulden te voorkomen, wordt meer ingezet op direct contact met schuldenaren. De stapeling van boetes vanwege te laat betalen en bestuursrechtelijke premies wordt gemaximeerd. Mogelijkheden voor betalingsregelingen worden uitgebreid. 3 Bij incasso worden misstanden effectiever bestreden. De maximale incassokosten die in rekening mogen worden gebracht, worden gehandhaafd en er wordt bezien of het minimumbedrag omlaag kan. Er komt een incassoregister waarin incassobureaus worden opgenomen, die voldoen aan eisen met betrekking tot oprichting, bedrijfsvoering en opleiding. Indien een incassobureau te vaak de fout ingaat, wordt het beboet en verliest het de registratie. 4 Excessen in kredietverlening zullen worden tegengegaan, net als verdienmodellen waarbij hoge rentes mensen in de problemen brengen en de kosten van wanbetaling op de samenleving worden afgewenteld. 5 De juridische afhandeling van schulden wordt verbeterd. Schuldeisers dienen eerst de mogelijkheden van een betalingsregeling te onderzoeken voor een zaak voor de rechter wordt gebracht. Er komt een experiment met een schuldenrechter, die alle zaken van een schuldenaar geconcentreerd behandelt. Gemeenten krijgen een adviesrecht in de gerechtelijke procedure rondom schuldenbewind. 6 Met gemeenten en erkende vrijwilligersorganisaties wordt gewerkt aan een landelijk dekkend netwerk van vrijwilligersprojecten gericht op schuldhulp en financiële begeleiding. 7 Het kabinet zal extra middelen beschikbaar stellen voor het voorkomen van schulden en de bestrijding van armoede - in het bijzonder onder kinderen." Zie De punten 1 en 2 kunnen in theorie alleen maar worden onderschreven, hoewel uiteraard veel van de uiteindelijke vormgeving van deze 'programmatisch afspraken' afhangt. Punt 1.3 kan aanleiding zijn art. 287 lid 4 Fw (voorlopige voorziening hangende het schuldsaneringsverzoek) aan te passen. Punt 2 noopt ertoe goed te onderscheiden tussen de overheid als organisatie die het algemeen belang dient, en de overheid als crediteur. Ik begrijp dat het inherente conflict of interest beter onder ogen wordt gezien. Punt 3 kondigt een professionaliseringsslag bij incassobureaus aan, met een 'incassoregister'. Dat is een gekke benaming, beter lijkt Wet op de Incassobureaus, want ik neem toch aan dat bij wet geregeld gaat worden wie de registratie uitvoert, welke criteria daarvoor worden aangelegd, wie de 'erkenning' regelt, met een regeling van boete's en deregistratie die waarborgen voor een zorgvuldige procedure bevat, voordat een kantoor diens registratie wordt ontnomen. Punt 4 is vaag. Punt 5 kan leiden tot een - in de literatuur wel besproken - in de wet op te nemen verbijzondering van een redelijkheid en billijkheidsplicht (tussen contractanten) om niet rauwelijks te dagvaarden, maar eerst buiten rechte een vordering trachten te innen. Mogelijk sluit punt 5 hierop aan: de plicht van een schuldeiser om eerst een betalingsregeling te onderzoeken. Een experiment met een 'schuldenrechter' wordt aangekondigd. Ook onduidelijk. Is dat een 'echte' rechter of een bijzondere rechter (uit de rechtbank?), die ook bemiddelt en als mediator optreedt? Wat zijn 'alle zaken' van de schuldenaar? Diens consumptieschulden en ook zijn schulden wegens alimentatie of zijn hypothecaire schulden? Of ook niet-financiële zaken, bijvoorbeeld probleem met een vergunning? Wat is de verhouding met het met ingang van 1 april 2017 in werking getreden Besluit breed moratorium ex art. 5 van de Wet gemeentelijke schuldhulpverlening? En hoe werkt dit alles uit in het Burgerlijke Wetboek, in het Wetboek van Burgerlijke Rechtsvordering en in de Faillissementswet? Genoeg, dacht ik zo, om met aandacht te volgen.

2017-10-doc4 III Prize competition 2018 now open

The HomeInternational Insolvency Institute has opened its competition ofr the Prize in International Insolvency Studies. The Prize in International Insolvency Studies comprises a Gold Medal Prize for the winning submission as well as a Silver Medal Prize, a Bronze Medal Prize, and several Finalist Prizes. The Prizes are accompanied by an honorarium for the Medal winners. it's for the 13th time that III awards its yearly prizes for original legal research. Topics can be matters of international insolvency and restructuring significance and on comparative international analysis of domestic insolvency and restructuring issues and developments. The winner’s contribution will be published in Norton Journal of Bankruptcy Law and Practice, s/he will receive a trip to the III’s conference in New York City in September 2018. The winner(s) will meet insolvency experts from around the world and be invited to present their paper. The III Prize is awarded for original legal research, commentary or analysis on topics of international insolvency and restructuring significance and on comparative international analysis of domestic insolvency and restructuring issues and developments. The Prize Competition is open to full and part-time undergraduate and graduate students and to practitioners in practice for nine years or less. Entries must not have been published and must be available to be posted on the International Insolvency Institute website at Medal-winning entries will be considered for publication in the Norton Journal of Bankruptcy Law and Practice (West) and for inclusion in the Westlaw electronic database. Entries may be of any length but a limit of 20,000 - 30,000 words is preferred. Entries must be received by March 31, 2018. Entries will be judged by a distinguished panel of leading international insolvency academics and practitioners from some 10 countries. All Medal Winners and Finalists will be invited to attend the Conference and will be provided with complementary Conference registration. Medal Winners will also be nominated to Class VII of the III NextGen Leadership Program which will convene in New York in September, 2018 during the III's 2018 Conference. For further details and the terms of the III Prize in International Insolvency Studies go to or contact Franca Tibando, Executive Director of the International Insolvency Institute NextGen Leadership Program, at ++ 1-416-918-7301 or