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VGC Storage & Transport v. GE SEACO Services

2009 March 26
by Hein Kernkamp

Court: Netherlands Supreme Court

Date: March 5th, 2004

LJN numer: AO1213

Case: GE SEACO leased containers to Norasia, which company at a certain stage failed to pay. As a consequence thereof, GE SEACO started to repossess the leased containers. Thirteen of these containers were at the time stored at the container depot of VGC, a company that stored and repaired containers for Norasia, amongst which containers owned by Norasia itself and containers leased from other leasing companies. VGC claimed to have a lien (in Dutch a right to retain the goods and enforce claims against the goods) for the grand total of its claim for unpaid invoices. Moreover, it intended to auction the containers. GE SEACO wanted a release of the thirteen containers against partial payment of the debt of Norasia, limited to the costs relating to the thirteen containers, which was only a sum of US$ 3250. VGC refused and GE SEACO initiated summary proceedings, in which it asked for a Court order. The Court followed VGC in its argument that it could retain the containers for the full total of the claim. The Court of Appeal quashed the decision of the Court. Under Dutch law it is possible to exercise the lien against third parties with an older title to the goods, like the owners. However, there should be sufficient interconnectedness between the claim and the retained goods, and therefore the Court of Appeal followed GE SEACO in its argument that the containers should be released against payment of the sum of US$ 3250 only. VGC appealed this decision.

Held: The Supreme Court follows the line of argumentation of the Court of Appeal. There should indeed be sufficient interconnectedness between the claim and the retained goods. The owners of goods do not have to anticipate that those owned goods will be used as securtiy for claims relating to the storage and repair of goods owned by others. From those who store and repair equipment, it can be expected that they take into account that the various goods may belong to others then the contractual counterpart, and that they he keeps up a sound administration, that gives sufficient insight in the cost attributable to each object.

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