During the last four weeks I received several references and comments on my draft-texts for 5th edition of Wessels International Insolvency Law Part I. For my descriptions of cross-border insolvency law, your views and comments were sought for India, Brazil, Australia and China. Below I am looking in my own, Dutch, mirror. Your input (cases, literature, views) will contribute to the draft text for the new edition. Many thanks for the improvement of the text of my forthcoming book. As noted earlier, providing input is based on the idea of my chosen writing process, a ‘deliberate public participatory drafting process’, see my blog at https://bobwessels.nl/blog/2021-12-doc1-book-on-international-insolvency-law-your-input-needed/. I also look forward to comments on the draft text below, preferably soon, but on 15 January 2022 at the latest via: email@example.com. The second half of January 2022 I hope to finalize the manuscript and send it to Wolters Kluwer’s editorial office. Below is the draft text for the Netherlands. I am afraid the Dutch mirror shows a swampy and ragged face:
 International insolvency law in the Netherlands. Where this Volume appears as number X in de (Dutch) series Wessels Insolventierecht (with its nine preceding volumes in the Dutch language), we start with some remarks related to the Netherlands. In this country, international insolvency law does not exist as a systematically elaborated legal framework. In the Dutch Bankruptcy Act of 1896, for instance, one finds only limited references, of a differing nature, which may provide answers to questions concerning a few international aspects of insolvency, such as the situation in which the assets of an insolvent debtor are located abroad, or the consequences of recourse taken by a Dutch creditor against assets of a debtor abroad. The majority of questions, for example, the effect of a foreign insolvency judgment or the powers of a foreign liquidator in the Netherlands, are not dealt with by the Dutch Bankruptcy Act. These kinds of questions must be answered by applying general private international law. See Vriesendorp 2021/378ff. Since 31 May 2002 the EU Insolvency Regulation applies to such questions in matters that fall under its scope. Presently, the EU Insolvency Regulation 2015 (EIR 2015) forms the current legal framework, see Wessels International Insolvency Law Part II 2017.
 Legal history. The Dutch Bankruptcy Act (Faillissementswet or Fw) covers four insolvency proceedings, these being, ‘faillissement’ (bankruptcy or bankruptcy liquidation), ‘surseance van betaling’ (suspension of payments or legal moratorium), ‘schuldsaneringsregeling natuurlijke personen’ (debt reorganization or rescheduling for natural persons, i.e. individuals, including those running a business or a trade) and since 1 January 2021 the ‘akkoordprocedure buiten faillissement’ (private arrangement of debts). The latter has a ‘public’ and a ‘private’ (confidential) version. Since 9 January 2022, the public version is listed on Annex A of the EIR 2015 (see in addition to the earlier three it lists ‘De openbare akkoordprocedure buiten faillissement’). The present Dutch Bankruptcy Act, legally effective as of 1896, offers very limited answers to such questions. The heading of Chapter 10 in Title I (Bankruptcy liquidation) Fw, entitled ‘Provisions of international law’ creates high expectations. However, the three Articles (Articles 203-205) only apply where the debtor possesses assets abroad. Articles 203-205 Fw are applicable by analogy to the suspension of payments proceedings (Article 251 Fw), but a similar provision with regard to the proceedings of debt reorganization for natural persons has been lacking since the introduction of such proceedings in December 1998. The latter omission has been corrected by the introduction of Article 359a Fw, in force since 15 January 2005. The Act does not provide rules regarding the question of whether a foreign insolvency measure has consequences in the Netherlands.
[10005a] Proposal 2007. In 2003, the ‘Commissie Insolventierecht’ (Insolvency Law Committee) was appointed by the Ministry of Justice. Four years later, in November 2007, the Committee published a pre-draft for a new Insolvency Act, with around 350 legal provisions and an explanatory memorandum of over 200 pages. One of the reasons for changing the existing Act (Fw) was its lack of sufficient international insolvency rules. In its pre-draft the Committee has presented Title 10, which contains provisions concerning ‘International Insolvency Law’. The present book’s first author has been one of its drafters. Title 10 contains 35 articles, divided over five chapters: (i) Chapter 10.1 (General Provisions); (ii) Chapter 10.2 (Insolvency Proceedings in the Netherlands); Chapter 10.3 (Foreign Insolvency Proceedings); Chapter 10.4 (Law Applicable); and Chapter 10.5 (International Cooperation). For an overview, see the contributions in Bob Wessels and Paul Omar (eds.), Crossing (Dutch) Borders in Insolvency. Papers from the INSOL Europe Academic Forum and Meijers Institute of the Leiden Law School Joint Insolvency Conference, Leiden, The Netherlands, 5-6 June 2008, Nottingham, Paris: INSOL Europe 2009. This publication includes an English version of the text of Title 10 of the pre-draft. The Committee wishes to draft a legal system for international insolvency law that can pass the test of quality established by the laws of Netherlands’ neighbouring countries, which are Germany, Belgium and England (& Wales). The Committee beliefs that with the draft of draft of Title 10, the Netherlands would be: (i) in alignment with comparable recent changes in legislation in countries such as Germany, Spain, Poland, Belgium and England (as well as the other parts of the United Kingdom); (ii) pushing considerably back, as one of the last countries in the world to do so, the broad application of the principle of territoriality – also known as the ‘grab rule’; (iii) pushing back the old fashioned and uncertain present status of international insolvency; (iv) creating a system of efficient and effective administration of insolvency proceedings in relation to non EU-Member States; (v) providing certainty with regard to the law applicable to such proceedings; and (vi) providing an improved system of mutual cross-border exchange of information and cooperation between administrators and courts. Going through the provisions, one will note the general appreciation the Committee has for the EC Insolvency Regulation of 2002, while recognizing that it contains several uncertainties and gaps. See e.g. Chapter 10.2 (Insolvency Proceedings in the Netherlands) and Chapter 10.4 (Law Applicable). For the chosen system of recognition one notes the inspiration the Committee took from the UNCITRAL Model Law on Cross-Border Insolvency. See Chapter 10.3 (Foreign Insolvency Proceedings). Here the Committee joined, at that time, a growing group of countries which have introduced or amended their system of recognition, such as Japan, Mexico, South-Africa, the United States, the United Kingdom, Spain, Poland and Romania. Chapter 10.5 (International Cooperation) also has been strongly influenced by the Model Law. To conclude, the Committee: ‘… is convinced that the pre-draft regarding international insolvency law contains a system that will work well and can bear very well the test of the present time of recently renewed systems in countries which are important trade partners of the Netherlands (UK, USA, Germany and Japan).’ Early 2011, however, the Minister of Security and Justice, has announced that the Committee’s pre-draft, will not be tabled for the Netherlands’ parliamentary treatment (for reasons unrelated to matters of international insolvency law). In several instances in (Dutch) literature it has been suggested to present to the Dutch parliament Title 10 (without all preceding titles) as a separate legislative initiative. In the Dutch government no support has been found for that idea. A new legislative initiative was taken in 2019. See below.
 Case law: universality wrapped up as territoriality. In the Netherlands, with inadequate legislation in place in cross-border matters which are not covered by the EIR 2015, case law is leading. A landmark case dates from 2013. In September 2013, the Netherlands Supreme Court had to decide in the matter of the insolvency of the Russion oil-giant Yukos Oil, and it clarified that the appointed Russian trustee (Mr Rebgun) may in principle exercise the power to sell the debtor’s assets located in the Netherlands, which power has conferred on him under the foreign (Russian) lex concursus, see Netherlands Supreme Court 13 September 2013, ECLI:NL:HR:2013:BZ5668. In summary, the Supreme Court considered that in its previous case law developed since the 1950s, it has held that, insofar as has not been decided otherwise in pursuance of an international regulation that is binding to the Netherlands, a bankruptcy declared in a different country has territorial effect, not only in the sense that (a) the bankruptcy attachment levied on the assets does not also include the assets situated in the Netherlands, but also in the sense that (b) the legal consequences of the bankruptcy law of that other country be attached to bankruptcy can not be invoked in the Netherlands in so far as these consequences might result in unsatisfied creditors no longer being able to take recourse – either during bankruptcy or after the bankruptcy – against the assets of the (former) bankrupt, that are situated in the Netherlands, whilst (c) the principle of territoriality does not obstruct the operation in the Netherlands of other consequences of a bankruptcy proceeding opened abroad. The rather long sentences are verbatim translations of the Surpreme Court’s reasoning. The Supreme Court then continued to explain that his case law means with respect to a bankruptcy opened abroad (assuming that judgment was not established in a manner which is contrary to Dutch public policy) that the trustee in that foreign bankruptcy in principle also with respect to the assets situated in the Netherlands and belonging to the bankruptcy estate – but which are not encumbered by the bankruptcy attachment – can perform acts of administration and disposal, provided that the trustee is empowered to do so under the laws of that other country (lex concursus) (line (c)).
Accordingly, the foreign trustee can, if he derives the power to do so from the lex concursus, alienate the assets located in the Netherlands and have the proceeds benefit the bankruptcy estate, on the understanding that by rule (a) attachments levied up to the moment of transfer must be respected, as those assets do not fall under the bankruptcy attachment. Rule (b) does not stand in the way to the above. In order to do justice to that rule it is sufficient, the Supreme Court continues, that, as long as during or after the bankruptcy assets belonging to the (former) bankrupt are situated in the Netherlands, unsatisfied creditors can take recourse against them. Rule (b) does not extend so far that those assets would have to be kept fully out of the normal settlement of the foreign bankruptcy. The territoriality principle does not preclude that the power to dispose of the debtor transfers to the foreign liquidator, so he can also liquidate the assets located in the Netherlands – respecting the attachments levied thereupon in the meantime – for the benefit of the joint creditors.
A short comment is appropriate. One of the weaknesses of the Dutch international insolvency framework is that it does not contain a system of international insolvency law for cases beyond the scope of the EU Insolvency Regulation. The Dutch system, as explained above, still adheres to the territoriality principle, expressed in the line: ‘Pursuant to the principle of territoriality a foreign insolvency proceeding has no effect in the Netherlands’. In the preceeding version of this book Wessels already doubted whether indeed cases of the Dutch Supreme Court judgments could be interpreted leading to the cited result, see Wessels International Insolvency Law, 4th ed. 2015/10176 et seq. In the decision of the Dutch Supreme Court of 13 September 2013, the Court limits the territoriality principle to its mirror image: sheer universality. In the Yukos case the Dutch Supreme Court considered the position of the Russian trustee appointed in a Russian insolvency proceeding regarding Yukos. Was the trustee authorised to sell and transfer shares Yukos held in a Dutch BV? These shares were a part of the Russian estate. The Supreme Court decided that the Russian trustee was indeed authorised to sell and transfer these shares if the lex concursus (Russian insolvency law) would allow this, unless the foreign insolvency proceeding violates Dutch public policy. See Kortmann, in: MüKoInsO (2021), 1620. Also critically Veder (2014); Berkenbosch and Pepels, TvI 2018/51. In the Yukos-case the Dutch Supreme Court 18 January 2019, ECLI:NL:HR:2019:54, indeed held that the Russian proceeding was a violation of Dutch public policy. See Wessels/Kokorin, ICR 2019, 229ff. Nevertheless, the Court’s ‘territorial’ position is leading case law.
[10006a] Initiative 2019. Apart from the inadequate regulation in Dutch legislation, the line of the Supreme Court is also due for review. What in words presents itself as the territoriality principle is hollowed by what in fact is automatic recognition mixed with the historic stance that creditors can continue to recover from the estate, as far as assets are located in the Netherlands. See for more critique Chapter II of the pevious edition of this work and my call (in Dutch) to the (then new) legislator (https://bobwessels.nl/blog/2017-11-doc3-wetgever-regel-internationaal-insolventierecht/), it took till August 2019 that the Dutch government announced it would explore the introduction of an international insolvency law system, with the UNCITRAL Model Law (discussed in depth in Chapter III of this book) as a basis. The beginning of the process was halted by legislators’ focus on COVID-19 pandemis (emergency) legislation, however since September 2021, there is some progress made. Once approved in Dutch Parliament, the topic will be covered in a separate part in this series. With a renewed government in place since today, expectations can be warmed-up (again).