NETHERLANDS Law and Practice Contributed by: Gianluca Kreuze, Ruben den Hollander, Anne van Geen and Sanne van Esterik, Loyens & Loeff
time as the amounts owed to the secured lend- ers become due and payable and is discharged when the debt of the secured lenders is repaid. The secured liabilities under the Dutch security documents refer to the parallel debt. Trust A trust created under the laws of another juris- diction is recognised under Dutch law, provided that the governing law provides for trusts and the trust has been created voluntarily and is evi- denced in writing. The courts in the Netherlands will, however, not be bound to recognise a trust of which the significant elements are more close- ly connected with states which do not provide for the institution of the trust. 5.7 General Principles of Enforcement Process for Enforcement of Security A Dutch law security right can be enforced only following a default by the debtor in relation to the (monetary) secured liabilities. In other words, there must be a payment default (usually trig- gered by way of acceleration after an event of default). Whether a payment default has occurred, should be determined based on the laws that govern the underlying documentation which contains the relevant monetary payment obligations. The enforcement of Dutch security rights is a relatively easy and quick process and can take place by: • a public sale (without court involvement) or private sale (with court approval); • in case of a pledge only, a private sale agreed between the secured party and the security provider (without court involvement); or • in case of a pledge of receivables only, col- lecting receivables and application of the proceeds towards the secured obligations.
Appropriation is not allowed but a secured party may bid in a public sale, or it may buy the asset with the approval of the court. As follows from the above, judicial enforcement may be required if out-of-court enforcement is not possible or unsuccessful. This involves filing a request to obtain a court order for the enforce- ment of security. Generally, within two to four weeks after the request has been filed a court hearing will be scheduled in which the secured party will be heard. Although there is no formal requirement to also hear the security provider or any other interested party, practice has shown that the court will either give notice itself or order the secured party to give notice of the intended sale to the security provider and any interested party. The court ruling (either in the event of approval or rejection) is not open to appeal on the merits of the case. Enforcement of Foreign Judgments Recognition of foreign judgments are subject to the existence of treaties. Judgments by any EU Member State court can generally be enforced in the Netherlands without any need for a re- examination of the merits of a case and without any declaration of enforceability being required. However, in the absence of a treaty (for exam- ple in case of the United States), a judgment by a non-Dutch court cannot be enforced in the Netherlands without re-litigation of the merits. A Dutch court will typically grant the same judg- ment without substantive re-examination of the merits if: • the judgment results from proceedings compatible with the Dutch concepts of due process; • the judgment does not contravene public policy of the Netherlands;
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