NETHERLANDS Law and Practice Contributed by: Eduard Scheenstra, Etiënne Courbois and Jenny Noordermeer, CMS
be delivered, transferred, held, registered, or other- wise designated so that it is under the possession or control of the party taking the security. 6.2 Foreign Law and Jurisdiction Choice of a Foreign Law as the Governing Law of the Contract Dutch courts recognise the choice of foreign law to govern transaction agreements on the basis of Regu- lation (EC) No 593/2008 of the European Parliament and the Council of 7 June 2001 on the law applicable to contractual obligations (Rome I). Rome I enables parties to agree that a contract may be governed by the law chosen by the parties to that contract, irre- spective of whether the chosen law is the law of an EU member state. The freedom to elect the governing law does not apply to collateral agreements creating security over, inter alia, shares in Dutch companies or partnership interests in Dutch partnerships or real estate situated in the Netherlands, as these must be governed by Dutch law. Collateral arrangements over Dutch law receivables are mostly governed by Dutch law, although, in a cross-border context, possibilities exist for other laws to govern these collateral arrange- ments. Submission to a Foreign Jurisdiction Provided certain conditions are met, Dutch courts will typically recognise and enforce a valid contractual agreement to submit disputes to the jurisdiction of a foreign court. Waiver of Immunity Under Dutch law, a Dutch legal entity cannot claim immunity from legal proceedings, enforcement, attachment, or similar legal measures – either for itself or its assets. However, assets designated for public use ( goederen bestemd voor de openbare dienst ) are, Dutch courts recognise and enforce civil and com- mercial judgments from other EU member states in accordance with Regulation (EU) No 1215/2012 (Brus- sels I) and, in the case of uncontested claims, the European Enforcement Order Regulation. For certain non-EU countries – such as Switzerland, Norway, Iceland, Mexico, Singapore, and Montenegro – judg- by law, not subject to attachment. 6.3 Foreign Court Judgments
ments may be recognised if the relevant treaty condi- tions are fulfilled. For judgments from countries without an applica- ble treaty, enforcement in the Netherlands generally requires re-litigation. However, Dutch courts may, under specific circumstances, issue a judgment that mirrors the foreign ruling. The extent to which this applies to default judgments remains unclear. Arbitral awards are enforceable in the Netherlands if the award originates from a country that is a party to the 1958 New York Convention. Enforcement is sub- ject to the Convention’s provisions and the relevant rules in the Dutch Code of Civil Procedure. 6.4 A Foreign Lender’s Ability to Enforce Its Rights Foreign lenders are entitled to the same rights and remedies as domestic lenders when enforcing loan or security agreements. When a Dutch insolvency process is commenced – such as bankruptcy ( faillissement ), suspension of pay- ments ( surseance van betaling ), or a Dutch scheme ( Wet Homologatie Onderhands Akkoord , WHOA) – the rights of lenders to enforce loans, security, or guaran- tees governed by Dutch law are significantly affected. Bankruptcy (Faillissement) • Automatic Stay: Upon the declaration of bankrupt- cy, an automatic stay (moratorium) is imposed. This means that individual creditors, including secured lenders, are generally prohibited from enforcing their claims or security rights outside the bank- ruptcy process. • Secured Creditors: Secured creditors (those with rights of pledge or mortgage) retain a degree of protection. They are, in principle, entitled to enforce their security rights as if bankruptcy had not occurred. However, the bankruptcy trustee (curator) may impose a reasonable waiting period ( afkoelingsperiode ) of up to two months (extend- 7. Bankruptcy and Insolvency 7.1 Impact of Insolvency Processes
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