Follow me

RSS feed


2019   2018   2017   2016   2015   2014   2013   2012   2011   2010   2009   2008   2007   2006  

Welcome /  Blog

Blog 2015

2015-12-doc1 Counsel to the European Commission on restructuring and insolvency law

Recently I have been appointed as member of a group of experts that will assist the European Commission in the preparation of a potential legislative proposal containing minimum standards for a harmonised restructuring and insolvency law in the EU. Virtually this position is a follow up of the consultancy position I held since mid 2012, advising the European Commission in matters of rescue and insolvency, including the preparation of the legislative texts for the revision of the EU Insolvency Regulation (now European Insolvency Regulation 2015/848, into legal effect as per 26 June 2017) and the drafting of the March 2014 Recommendation on a New Approach to Business Failure and Insolvency. The next three years or so issues to be addressed will include: (i) the legal nature of this proposal and its scope (in view of the objective of facilitating the free movement of capital in the internal market, of establishing a Capital Markets Union, of improving the enforcement of claims in insolvency and of giving natural persons a second chance), including the instrument's alignment with the European Insolvency Regulation 2015/848); (ii) the creation of common definitions, principles and rules in the area of (a) preventive restructuring procedures (in essence the follow-up to the Commission's Recommendation of March 2014), (b) of formal insolvency procedures (e.g. filing of claims, conditions for accessing the procedures, avoidance actions, ranking of claims), and (c) of connected areas, such as the qualifications of insolvency practitioners and the duties, liabilities and disqualifications of directors in the vicinity of insolvency; (iii) the establishment of common principles and rules in the area of insolvency of natural persons with a view to giving honest debtors a second chance, and (iv) the creation of special rules for small and medium sized enterprises (SMEs) as debtors and as creditors with a view to reducing their costs and facilitating their access to restructuring and insolvency procedures. A consultant to the Commission act independently and in confidence. Declarations to that effect will be posted on the Commission's site.

2015-11-doc21 The Yukos saga continues

The legal death of Russian' Yukos is not fatal to a judgment creditor. On 13 November 2015 the Netherlands Supreme Court decided in the case of OOO Promneftstroy (incorpored in Russia) v Yukos Capital Sarl (Luxembourg) and Glendale Group Ltd (BVI). The Court ruled that the disappearance of a legal entity (Yukos), because of its bankruptcy, does not mean that a creditor has no legal redress anymore. If the goods to which the creditor has seized, were transferred in spite of the seizure, to a third party, the creditor may claim direct against the third party. The Supreme Court fills with this decision a loophole in Dutch seizure law ('beslagrecht'). The case is one out of many Dutch cases regarding the consequences of the bankruptcy of Yukos Oil, which resulted from a decision of the Moscow court in 2007. Yukos Capital and Glendale have, as creditors of Yukos Oil, seized assets of Yukos Oil, including its shares in the Dutch company Yukos Finance BV. The receiver in the Russian bankruptcy of Yukos Oil has sold those shares, according to Yukos Capital and Glendale, in spite of the seizure. It was held that with the end of the Russian bankruptcy of Yukos Oil it did not exist anymore. Are Yukos Capital and Glendale now empty handed? The Court of Appeal in this case assumed that Yukos Oil, under Russian law, with the registration of the judgment in the bankruptcy registration had ceased to exist. The Court of Appeal found this a legal consequence of the Russian bankruptcy law and refered to Netherlands Supreme Court 19 December 2008, ECLI:NL:HR2008:BG3573, and Netherlands Supreme Court 13 September 2013,ECLI:NL:HR:2013:BZ5668. This appeal decision however is set aside by the Supreme Court, that rules that pursuant to Art. 10:118 in connection with art. 10:119(f) Dutch Civil Code, the termination of the existence of a corporation - in this case the legal person Yukos Oil - is governed by the law of the State in which that corporation, according to its articles of association, has its legal seat and according to which law the corporation is constituted. The Supreme Court: '... This is a rule of international corporate law, not of international insolvency law. That rule also applies in the case at hand where in this country recourse is being sought on assets of a legal person, that in the state of its incorporation has its registered seat, has been declared bankrupt, and following the completion of the settlement of the bankruptcy under the law of that State has ceased to exist. The judgments of 19 December 2008 and 13 September 2013 do not concern the working, in this country, of the consequences of the foreign legal rights connected to the completion of the settlement of the bankruptcy of a corporation. The judgment of the Court of Appeal that the non-existence of Yukos Oil is to be regarded as a legal consequence of Russian bankruptcy law and therefore cannot be invoked in this case in this country, is therefore incorrect'. The Supreme Court here confirms its decision of 13 September 2013 - being that the principle of territoriality does not preclude the operation in the Netherlands of other consequences of a foreign Insolvency - with the result that the Article 10:118 Dutch Civil Code enshrined system of incorporation has its effects here. However, while true, the case was not subject to cassation, as the Supreme Court ruled - as an innovation - that creditors that are in a situation such as Yukos Capital and Glendale, may direct their claims against the person to whom the goods are transferred. That is, in this case OOO Promneftstroy. In the case at hand it means that it can be continued before the Amsterdam court. The formal approach of the Attorney-General ('there is no legal person; who to litigate against?') was by-passed. The protection of unsatisfied creditors has been given more weight than the principle that under the applicable law of incorporation the cooperation no longer exists. To be continued indeed.

2015-11-doc20 UK introduces Financial List as special court

UK introduces 'Financial List' as special court and a 'market test procedure' when - without a dispute - seeking guidance on a point of English law. As from 1 October 2015 in the UK the Financial List is in operation. It is a joint initiative of the Chancery Division and the Queen’s Bench Division and builds on the expertise of the judges of the Commercial Court and the Chancery Division. Judges from both jurisdictions have been nominated to sit as 'Financial List judges'. The financial markets play an important role nationally and internationally, and are continually developing. Many parties in the financial markets choose for English law to govern their relationships. In recognising that the UK serves as a global hub for financial law, a new court has been set up in London to deal with disputes between them. The Financial List primarily intends to meet the needs of the international financial community and to make sure that cases are dealt with by judges with particular relevant expertise and to provide users of the Financil List fast, efficient and high-quality dispute resolution of their claims or disputes. Disputes that are eligible for inclusion are those that principally relate to financial disputes of over £50m or equivalent, or which require particular market expertise, or '... raise issues of general market importance', the press release says. It also includes insolvency matters, such as schemes of arrangement. The procedure is intended to fit seamlessly with existing procedure. Parties issue proceedings in either the Commercial Court or the Chancery Division. Before judge allocation, the parties will have the opportunity to indicate any particular feature of expertise that may be advantageous. Mid October the first case was allocated to Blair J (in a case concerning derivaties between non-UK parties). What is really interesting and innovative is the 'market test case' procedure. This is a procedure to facilitate the resolution of '... market issues to which immediately relevant authoritative English Law guidance is needed', without the need for a present cause of action between the parties to the proceedings. The parties with interest should be '... actively in business in the relevant market', whilst in appropriate cases, a relevant trade body or association may be joined to ensure that the arguments of all interested parties are properly put before the court. The 'market test case' procedure wishes to ensure that markets are most efficient when their actors have mechanisms to resolve uncertainties quickly and definitively. It is a pilot for two years and it provides a mechanism for the court to grant declaratory relief on the grounds that it is in the public interest to do so. Futher info via

2015-11-doc19 In case of insolvency: seafarers pensions protected by Dutch court

​The District Court Rotterdam on 30 September 2015 (ECLI:NL:RBROT:2015:6868) has decided in a case concerning eleven seafarers’ claims for damages against their bankrupt Dutch employer. The claims were based on the employers failure to maintain adequate pension arrangements for them (damages regarding a ‘pensioengat’). According to their contracts they would participate in the pension arrangements of the Merchant Shipping Fond (Bedrijfspensioenfonds voor de Koopvaardij). The court clearly decides in favour of the seafarers. Their claims may be recovered from the proceeds of the four vessels (registered in Curacao) they served on, the court decides, and the full amount of the claim is recoverable from all ships. Moreover, the seafarers’ claims for damages take precedence over the claims of the Rabobank that had first security rights on these ships, based on Article 8:211 (opening line and b) Dutch Civil Code. The terms in said provision ‘… claims arising out of service contracts’ with the master or other seafarers are not limited to wages or other regular benefits and include claims for damages for breach of the service contract, thus the court. Furthermore, the Rotterdam Court found that, where the employer had been in breach for over a long period of time, the claims for damages should have priority over the security rights of the banks in the case at hand and that the fact that the period during which the seafarer had served on each of the ships lacked relevance. The proceedings will be continued on the issue of the quantum of the damages. In all, a clear example of the protection the Dutch legal system provides for those workers who cannot benefit from the general protective system of Dutch labour law.

2015-11-doc18 English language in Dutch Courts?

Specific Procedural Rules will apply when parties are opting for conducting international sales and maritime cases in the English language for the District Court in Rotteram.  As an inovation, as of 1 January 2016 the District Court Rotterdam starts a pilot with using English in international trade, transport or sales matters. The pilot will run for a year and a half. English should be chosen by all parties to the proceedings, be it represented by members of the Dutch Bar. See for these Procedural Rules Procedure-Rules-for-proceedings-in-English. Is a person required to take an oath or make an affirmation, this will be done in English too. However, when all persons present at a hearing are Dutch, then the Dutch language can be used. Anyway, decisions rendered will be in Dutch. It is interesting to note that - evidently - decisions rendered under these Procedure Rules may be appealed in the usual manner provided in the Dutch Code of Civil Procedure and that (without prejudice to their ultimate legal judgment on the usage of English as the working language in Dutch legal proceedings) the Court of Appeal in The Hague and the Netherlands Supreme Court in principle '... have declared to be willing to adjudicate with due observance of the English-language procedural documents from the first instance which came about in conformity with these Procedure Rules.' This all is a small break through, as generally in civil proceeding in Dutch courts the Dutch language is used, see e.g. District Court Utrecht 14 December 2005, LJN AY5238; District Court Haarlem 3 Juli 2008, LJN BD 6218 as well as 4 September 2008, LJN BE9510 (all in Dutch by the way). Also under the Procedural Rules, the Court of Appeal and the Supreme Court may request that one or more of the English-language procedural documents from the first instance is translated into Dutch.