CROSS-BORDER BANKRUPTCY AND THE LAWS OF THE NETHERLANDS ANTILLES
The principle of territoriality has been adopted
There is no Netherlands Antilles legislation prescribing the effects in the Netherlands Antilles of a foreign bankruptcy. The Supreme Court (‘Hoge Raad’) in the Hague, the Netherlands, being the Supreme Court for not only the Netherlands, but also Aruba and the Netherlands Antilles, has adopted the territoriality principle on more than one occasion, since at least 1967.
There are Dutch legal writers that have argued that in the Gustafsen/Mosk case (NJ 1999, 316), the Supreme Court has abandoned the territoriality principle. Such standpoint has met opposition and it is questionable whether such standpoint represents the governing view in Dutch legal literature.
If a Netherlands Antilles person (or entity) is declared bankrupt or insolvent in a foreign jurisdiction, then the foreign bankruptcy attachment on such person’s assets does not include his assets located in the Netherlands Antilles (the ‘territoriality principle’), unless (a) it concerns assets which have been moved from the jurisdiction of the foreign bankruptcy to the Netherlands Antilles after the date the foreign bankruptcy came into effect and/or (b) otherwise provided by treaty.
If a receiver appointed in a foreign bankruptcy is seeking to nullify a transaction to which the person mentioned has been a party and with this intent brings a claim before a Netherlands Antilles court on the ground of voidable preference (‘faillissementspauliana’), then the court would:
(i) look at the laws governing the foreign bankruptcy (lex concursus) for determining the existence and content of the foreign receiver’s authority to bring such a claim;
(ii) determine whether under the then current status of development of Netherlands Antilles law, the claim should be rejected on the basis of a possible location of relevant assets in the Netherlands Antilles; and
(iii) grant the foreign receiver’s claim only if the claim meets the requirements under both the lex concursus and, if different from the lex concursus, the lex causae (being the law governing the relevant transaction).
Karel Frielink
Attorney (Lawyer) / Partner
