BREACH OF CONTRACT IN THE DUTCH ANTILLES (I)
Failure to properly perform
Under the Netherlands Antilles Civil Code (CC) breach of contract is defined as a failure to properly perform, perform on time, or to perform at all, which failure is attributable to one of the parties If a debtor breaches his obligations there are various courses of action available to the creditor. Firstly he may claim specific performance, secondly he may claim damages, whether or not in addition to specific performance, and thirdly, he may demand dissolution of the contract, with or without damages.
The CC distinguishes between excused and non–excused non–performance. According to Article 6:74 CC …
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RESTARTING SECURITIZATION MARKETS IS CRITICAL
IMF: securitization can positively contribute to financial stability and sustainable economic growth
Although recent public opinion has focused on what went wrong with securitization, according to the International Monetary Fund (IMF), it is important to recognize the many benefits associated with sound securitization. Mobilizing illiquid assets and transferring credit risk away from the banking system to a more diversified set of holders continues to be an important objective of securitization, and the structuring technology in which different tranches are sold to various investors is meant to help to more finely tailor the distribution of risks and returns to potential …
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THE MANAGEMENT OF A DUTCH ANTILLES FOUNDATION
Management must act in the best interests of the foundation
The members of the management board of a Netherlands Antilles foundation have collective powers and responsibilities. The management board shall be in charge of the management of the foundation.
Although not explicitly provided for in Book 2 of the Netherlands Antilles Civil Code, it is considered a general rule of corporate law that the management board must act in the best interests of the foundation in the performance of its duties, even when acting upon instructions from others (e.g. a supervisory or advisory body).
The minimum standard of care is …
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CROSS-BORDER CONVERSIONS AND MERGERS IN THE DUTCH ANTILLES
No outbound mergers allowed
According to the laws of the Netherlands Antilles, a limited liability company (NV or BV) may convert to a foreign legal entity provided that under the laws governing such a foreign legal entity the consequence of such conversion shall be the continued existence of the company as a legal entity – in its new legal form. The Netherlands Antilles Corporate Code also allows a foreign legal entity to convert to a Netherlands Antilles legal entity.
The Netherlands Antilles corporate Code does not permit a merger of a Netherlands Antilles company, as the disappearing company, into a …
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BEARER SHARES IN A NETHERLANDS CARIBBEAN COMPANY
Registered shares must be issued first
On 1 March 2004, the new Netherlands Antilles act on corporate law (Book 2 Civil Code) became effective. Since that date it is no longer possible to (directly) issue bearer shares.
A company with only bearer shares has no shareholders’ register. Only a public limited liability company (NV) may issue bearer shares, provided that registered shares be issued first and that they have been fully paid up. These may subsequently be converted into bearer shares. The issuance (of registered shares) requires a ‘deed of issuance’, which must be signed by both the company and …
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LEGAL REBELS ARE REMAKING THE LEGAL PROFESSION
Dozens of lawyers are remaking their corners of the profession
According to the American Bar Association (ABA), “the legal profession is not just struggling through a recession but undergoing a structural break with the past. There is a growing consensus that the profession that emerges from this downturn will be different in fundamental ways from the one that entered it.”
Over the next three months, the ABA will be profiling 50 legal innovators a.k.a. Legal Rebels. These Legal Rebels are finding new ways to practice law, represent their clients, adjudicate cases and train the …
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THE REPAYMENT OF SHARE PREMIUM IN THE NETHERLANDS CARIBBEAN
Net equity may not be or become negative
From the legal point of view in Netherlands Antilles, share premium (’agio’) forms part of the company’s free reserves, and does not qualify as share capital. If share premium is to be repaid, the company’s financial condition should at the time allow for it, i.e. the net equity of the company may not be or become negative as a result of such repayment. If the company has shares with a nominal value, the repayment may not result in the nominal capital exceeding the net equity of the company.
In addition to this …
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LIFTING OF AN ATTACHMENT UNDER THE LAWS OF THE DUTCH CARIBBEAN (II)
Defendant has to show that the claim is invalid
Article 705, Paragraph 2 of the Netherlands Antilles Code of Civil Procedure states that the lifting of an attachment may be ordered if it appears summarily that the claim is invalid.
According to existing case law of the Dutch Supreme Court (see for instance Supreme Court dd June 14, 1996, NJ (Dutch Law Reports) 1997, 481), this means that the plaintiff (i.e. the party requesting the attachment be lifted in summary proceedings), with due regard for the limitations of summary proceedings, should establish a prima facie case (aannemelijk maken) that the …
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LIFTING OF AN ATTACHMENT UNDER THE LAWS OF THE DUTCH CARIBBEAN (I)
Freezing assets is rather easy
Under Netherlands Antilles law any party with a prima facie claim may file a petition for a court order granting an attachment, which petitions are generally granted, solely based on the allegations in the petition. It is not required, under Netherlands Antilles law, that the litigant needs to demonstrate that, in absence of an attachment, there is a risk that the defendant would have insufficient assets to pay a judgment, as a threat of evading a judgment (by moving assets etc.) does exist.
Only with respect to some types of assets, such as registered shares …
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SUMMARY PROCEEDINGS IN THE DUTCH CARIBBEAN (IV)
Only condemnatory judgments are allowed
As far as the form and the content of a decision in summary proceedings is concerned, the judge has great latitude in reaching a decision. A guiding principle for the judge will always be a policy of not going beyond what might be necessary or well-balanced as far as the decision in the procedure on the merits is concerned. In principle, however, the judge may order any measure provided that the measure serves to safeguard a right or a legally recognized interest.
Legal literature is of the opinion that in summary proceedings only condemnatory judgments …
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SUMMARY PROCEEDINGS IN THE DUTCH CARIBBEAN (III)
Judge will balance interests
In general the court will take into account the detriment which the plaintiff in summary proceedings will suffer if he has to wait too long for a judgment in a procedure on the merits.
In summary proceedings the judge needs to balance the interests of the plaintiff and the defendant. In practice, this balancing of interests plays an important role in the procedure. The judge may dismiss a claim in summary proceedings if the consequences for the defendant would be too drastic. An important factor will be the probability of a positive or negative decision on …
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SUMMARY PROCEEDINGS IN THE DUTCH CARIBBEAN (II)
Urgency is a requirement
Provisional measures may always be given in summary proceedings in civil cases if the claim meets the following three conditions: (i) there is an urgent interest at stake; (ii) the interests of both parties needs to be balanced; and (iii) the balancing of interests justifies a decision in summary proceedings.
The fact that the judge in summary proceedings (hereafter: “the judge”) is formally competent to render a decision, does not imply that he will accept the claim or will decide in favor of it. The nature of summary proceedings implies that the case not only needs …
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