FOREIGN LEGAL CONCEPTS AND THE LAWS OF THE NETHERLANDS ANTILLES
Assimilation
Different legal systems result in different legal concepts. For example, English law has no concept of ‘economic beneficiary’ (‘economisch eigenaar’) as such. Instead, English law has concepts such as ‘equitable interest’ or ‘beneficial interest’ in an asset. The most obvious illustration of ‘equitable interest’ or ‘beneficial interest’ under English law is the right of a beneficiary of a trust.
But how should, e.g., the Netherlands Antilles deal with such foreign rights? If possible, they should be assimilated into Netherlands Antilles law. Assimilation is a variant of the ‘modification’ doctrine, namely interpretation of the legal system that has been designated as the applicable system: the foreign substantive rule or regulation must be ‘modified’ in such a way based on the usual interpretation methods, that an efficient and justified result is obtained in the light of its function and purport in relation to the other applicable rules and regulations
How this assimilation should take place in practice can be inferred from the ruling of the Dutch Supreme Court in the Sisal case (decision of 14 December 2001, Dutch case law 2002, 241). This case involved the question of whether under Tanzanian law, a ‘floating charge’ that was later converted into a ‘fixed charge’ could be considered equivalent to the Dutch (non-possessory) pledge on claims in the application of Sections 480 and 481 of the Dutch Code of Civil Procedure. The Court of Appeal had answered this question affirmatively in the challenged ruling. This opinion was unsuccessfully challenged in cassation. The Supreme Court considered the following (legal ground 3.3):
‘To answer the question that has now been raised, it must be assessed whether the title holder of a foreign security interest that has been validly established under the applicable legal system can be considered equivalent to the title holder of a Dutch security interest referred to in Sections 480 and 481 Dutch Code of Civil Procedure from the point of view of justice and efficiency and therefore is authorised to request an order of priority. In this respect it should be noted that whether or not there is general conformance between the foreign and Dutch security interest is not decisive, but whether or not – in view of the application of specific Dutch regulations; in this case Sections 480 and 481 Dutch Code of Civil Procedure – the content and purport of the foreign security interest can be considered equivalent to a related Dutch security interest.‘
Sometimes the difference between the laws of one country (A) and that of another (B) will be so great that the legal concept of country A will have to be ‘translated’ into a different legal concept of country B, which is similar to the original concept in terms of function. An example: a life interest is established on property in England. When the property is moved to the Netherlands Antilles, the life interest is replaced by a right of usufruct to which the English life interest rules are applied as much as possible.
Karel Frielink
Curacao-based Attorney (lawyer) / Partner
