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Dutch State to reduce Dutch greenhouse gas emissions by 25% by the end of 2020

2019 December 31
by Hein Kernkamp

State of the Netherlands v. Urgenda

Court: Netherlands Supreme Court

Date: December 20, 2019


A major cause of rapid global warming is the emission of carbon dioxide and other greenhouse gases into the atmosphere. This is a source of great danger to life on earth. Both the Urgenda Foundation and the Dutch State are of the opinion that greenhouse gas emissions should be reduced quickly, and ultimately be discontinued almost completely, but they disagree on the speed at which this is supposed to happen. The Dutch State has a EU target for 2020 of a 20% reduction compared to 1990 levels. Urgenda, on the other hand, believes that, given the serious risks of climate change, the Dutch State’s target is not sufficient. Urgenda demands a reduction in Dutch emissions by at least 25% in 2020 compared to 1990 levels.

The The Hague District Court agreed with Urgenda. It ordered the Dutch State in 2015 to reduce Dutch greenhouse gas emissions by 25% by the end of 2020. This order was confirmed by the The Hague Court of Appeal in 2018. Today, the Supreme Court rejected the Dutch State’s cassation appeal against this decision.

The Supreme Court based its judgment on the UN Climate Convention and on the Dutch State’s legal duties to protect the life and well-being of citizens in the Netherlands, which obligations are laid down in the European Convention for the Protection of Human Rights and Fundamental Freedoms (the ECHR).

There is a large degree of consensus in the scientific and international community on the urgent need for developed countries to reduce greenhouse gas emissions by at least 25% by the end of 2020. The Dutch State has not explained why a lower reduction would be justified and could still lead, on time, to the final target accepted by the Dutch State.

The Dutch State has argued that it is up to politicians to decide on the reduction of greenhouse gas emissions. According to the Supreme Court, however, the Dutch Constitution requires the Dutch courts to apply the provisions of the ECHR. This role of the courts to offer legal protection is an essential element of a democracy under the rule of law.. The courts are responsible for guarding the limits of the law. That is what the Court of Appeal has done in this case, according to the Supreme Court.

Therefore, the Supreme Court ruled that the Court of Appeal was allowed and could decide that the Dutch State is obliged to achieve the 25% reduction by the end of 2020, on account of the risk of dangerous climate change that could also have a serious impact on the rights to life and well-being ofresidents of the Netherlands.


Arrest of a sister ship for maritime claims

2012 January 17
by Hein Kernkamp

Furtrans Denizcilik Ticaret Ve Sanayi AS v. Augusta Due Srl.

Court: Netherlands Supreme Court

Date: December 9, 2011

LJN Number: BT2708

Case:  Ship arrest for a maritime claim on a sister ship owned by the same debtor

Augusta Due Srl has ordered Furtrans to build the ship "Stromboli M", for a price of € 29,950,000. According to the agreement, Furtrans remains the owner of the ship during its construction. Augusta has made a downpayment of approximately 3 million euros; the remainder of the purchase price is to be paid upon delivery of the ship. Delivery was planned to take place on the 4th of February, 2010; however, Augusta failed to take delivery.

Furtrans petitioned the Amsterdam court to obtain leave for arrest on the "Costanza M", a ship which is also owned by Augusta. Leave was granted, and the "Costanza M" was arrested on the 24th of February 2010, in the harbor of Amsterdam, for an alleged claim by Furtrans of € 29,366,615. Augusta started to proceedings to have the arrest lifted, claiming that arrest in this matter was not possible, due to article 3 of the International Convention Relating to the Arrest of Sea-Going Ships (Brussels, 1952). The court of first instance denied the claim; however, the court of appeals lifted the arrest on this ground.

Held: The ships which may be arrested, are pointed out in article 3 of the Brussels Convention. Firstly, this is the ship on which the claim sees, and secondly, every other ship owned by the same owner (at the moment the claim came into existence) may be arrested as well. In case of a bare boat charter, only the charterer may be held liable, and arrest on sister ships owned by the same owner (not being the charterer) is not possible. Furthermore, article 3 paragraph 4 stipulates: "The provisions of this paragraph shall apply to any case in which a person other than the registered owner of a ship is liable in respect of a maritime claim relating to that ship".

According to page 341 of the "travaux préparatoires" (preparatory works) of the Brussels Convention, arrest is always possible if a person (or company) other than the owner is responsible for a claim, and this arrest may then also be made on other ships owned by this other person or company.

Augusta has not denied that Furtrans has a maritime claim on Augusta. Therefore, the decision made by the court of appeals is quashed by the Supreme Court, and the csae is sent back to be decided upon by another court of appeals. This court will have to examine whether or not Furtrans' claim is indeed a maritime claim as meant in the Brussels convention.


Agio, British American Tobacco et alia v. The State of The Netherlands

2011 December 1
by Hein Kernkamp

Court: Netherlands Supreme Court
Date: November 25, 2011
LJN Number: BS8874

Case: Petrol stations in The Netherlands sell cigars produced by Agio Sigarenfabrieken, British American Tobacco and other tobacco companies. Owners of petrol stations receive financial incentives by the cigar companies to display their products on the counter, in a specific dispenser (provided by the tobacco companies) to hold the cigar boxes. The State deems this practice to be in violation of tobacco laws, especially those laws regarding advertisements for tobacco products. Advertising of tobacco products is strictly prohibited in The Netherlands, and displaying tobacco products (including cigars) by resellers is only allowed as far as it concerns the "regular presentation" of these products. In the past, the State of The Netherlands has fined tobacco companies for these practices in petrol stations.

The tobacco companies have therefore asked the court to establish that this regular presentation includes the displaying of cigars on the counter of petrol stations in a specific dispenser, and also to establish that the State's interpretation of "regular presentation" is too narrow. The court of first instance has ruled in favor of the tobacco companies; however, the appeals court has denied the claims of the tobacco companies.

Held: The Supreme Court agrees with the decisions made by the Court of Appeals. "Regular presentation" excludes all commercial marketing, promotion, sponsorship and advertisements of tobacco products. In this case, cigar boxes were displayed in a dispenser provided by the tobacco company. Petrol stations are paid to display these dispensers on their counters, in favor of other brands. Therefore, it is deemed a form of promotion or advertising for the particular brand of cigar on display. Dutch tobacco laws only allow for the display of cigar boxes as long as the sole purpose is to show what particular products are sold by a particular reseller, and at what price. Any other means of displaying tobacco products, including the displaying in dispensers as was the matter here, is therefore illegal. The court of appeals has therefore correctly rejected the claim by the tobacco companies.


Residex Capital IV v. Rotterdam

2011 March 24
by Hein Kernkamp

Court: Netherlands Supreme Court
Date: May 28, 2010
LJN Number: BL4082

Case: In August 2004, it appeared that the former director of the Port of Rotterdam – which Port is owned by the municipality of Rotterdam – had allegedly agreed to authorize a number of bank loan guarantees to a total amount of approximately EUR 100 million. The director of the Port of Rotterdam had agreed to issue these guarantees for the benefit of four subsidiaries of the Rotterdam Dry Dock Company (RDM) in order to ensure that the Port of Rotterdam gained several production contracts, but he apparently failed to inform the Port’s board of directors and the commissioners of the municipality of Rotterdam. This became known to the Port's board of directors and the commissioners of the municipality of Rotterdam when the RDM subsidiaries went bankrupt and their remaining activities appeared to be insufficient to cover the loans. The banks demanded repayment of the loans from the Port of Rotterdam and the municipality of Rotterdam, however neither were willing to honour the guarantees.

Residex started proceedings against the municipality to receive a payment of 10 million euros under one of these guarantees. Without this guarantee, Residex would not have issued a loan to a third party; because of default of the third party, Residex now claims under the guarantee from the municipality.

The guarantees qualify – according to the District Court – as State aid that should have been notified with the European Commission. Since such notification had not taken place, the guarantees were to be considered as unlawful aid. Unlawful State aid is null and void. It may reasonably be expected from the banks to verify whether the State aid rules have been complied with when guarantees are issued by public authorities, especially when these are issued for such large amounts as in the present case.

The Court of Appeals dismissed this submission on the grounds that, according to settled case law, all guarantees issued by public authorities (or undertakings controlled by public authorities), may constitute State aid where the conditions set out in Article 87 EC are fulfilled. The Port of Rotterdam qualifies as such an undertaking, as it is wholly owned by the municipality of Rotterdam. Neither the level of control that the municipality may exercise nor the actual involvement of the municipality in the day-to-day business of the Port of Rotterdam is relevant in this matter. Under Community law, national courts are obliged to apply the State aid provisions ex officio. Residex's second submission – that the application of these provisions is disproportionate to the objectives laid down in these provisions, as it would cause serious damage to Residex and the other creditors – was also dismissed by the Court of Appeals. The Court of Appeals pointed out that it follows from settled case law that the recovery of State aid unlawfully granted for the purpose of reestablishing the previously existing situation cannot in principle be regarded as disproportionate to the objectives of the Treaty in regard to State aid.

Held: The Supreme Court agrees with the decisions made by the Court of Appeals. Unlawful State aid needs to be paid back by the party or parties who took benefit from it. However, declaring that the guarantees were null and void in these proceedings do not lead to undoing the issuance of the loan by Residex, so the effect of the unlawful State aid is not undone by only voiding the guarantees.

The Supreme Court therefore asks the European Court of Justice to give an opinion on this matter, and to answer the question whether or not it is possible to declare the guarantee issued by the municipality to Residex null and void, even when this does not lead to undoing the loan issued by Residex to the third party, and therefore does not lead to undoing all effects of the unlawful State aid. The Supreme Court has suspended its judgment up until the European Court of Justice decides on this question.


The Kingdom of Morocco v. Anonymous

2010 June 15
by Babise de Laive

Court: Netherlands Supreme Court

Date: February 5, 2010

LJN Number: BK6673

Case: A Moroccan national started working for the Moroccan embassy in The Hague as a secretary in March of 2001. In October 2001, she received the Dutch nationality. Since July of 2003, she is also married to a Dutchman. In June 2003, she became ill due to neck pain. In January 2004, the ambassador summoned her to resume her duties immediately, or otherwise be fired due to abandoning her position. The secretary did not resume her duties as she was still suffering from neck pains, after which she was fired. She then instigated proceedings in The Netherlands against the Kingdom of Morocco. The court of first instance ordered the Kingdom of Morocco to resume payments under the employment agreement until the agreement had been terminated in accordance with Dutch law; this decision was upheld by the appeals court.

Held: As was the case in Anonymous v. The Kingdom of Morocco, the Kingdom of Morocco invoked its immunity of jurisdiction in these proceedings. However, the Netherlands Supreme Court confirmed its previous decision of Anonymous v. The Kingdom of Morocco, again by making reference to the European Convention on State Immunity and to the UN Convention on Jurisdictional Immunities of States and Their Property. Although the latter has not been signed or ratified by The Netherlands, this convention applies in The Netherlands on grounds of international customary law. As the secretary lives in The Netherlands, has in the meantime received the Dutch nationality, and is married to a Dutchman, the Supreme Court decides that entering into the employment agreement is not an act which may be protected by state immunity. The scope of duties performed under the employment agreement is not protected by state immunity either, as the secretary did not perform duties with a "diplomatic character". Therefore, the decision of the appeals court is upheld.


Alfa Romeo Nederland v. Multicar

2010 January 11
by Hein Kernkamp

Court: Netherlands Supreme Court

Date: January 8, 2010

LJN Number: BJ9352

Case: Under Commission Regulation (EC) No 1400/2002 of 31 July 2002 car dealers within a selective distribution system must be able to sell actively to any end user resident in an area within the European Union where selective distribution is used. Suppliers are however allowed to impose an obligation on the dealer not to sell new vehicles to independent resellers in areas where selective distribution is used.

Alfa Romeo Nederland decided to ask the District Court of Dordrecht for an injunction, when it noted that Anonymous, an independent reseller, sold new Alfa Romeo’s to the public. Alfa Romeo Nederland alleged that Anonymous committed a tort (an unlawful act under Dutch law), by consciously making use of a breach of obligation by car dealers, who under the selective distribution system are under an obligation not to sell new vehicles to independent resellers, like Anonymous. By acting in this manner, Anonymous brought itself in a better position than genuine Alfa Romeo car dealers, who are bound to act fully in accordance with the distribution agreement and who are expected to invest in marketing and sales of the Alfa Romeo brand.

Both the Court and the Court of Appeal ruled against Alfa Romeo Nederland. It was held that the sole breach of obligation did not necessarily lead to the conclusion that Anonymous committed a tort towards the Dutch dealers of the Alfa Romeo Network. Alfa Romeo Nederland decided to bring the case before the Netherlands Supreme Court.

Held: The Netherlands Supreme Court rules that, if an independent reseller:
(a) resells products that have been obtained by consciously using the fact that a reseller bound by a selective distribution system breached its contractual obligation towards the distributor, and;
(b) by selling the thus acquired products directly competes with other merchants who are tied a similar contractual obligation, and;
(c) this reseller benefits from the fact that these bound resellers are in a less favorable position because of the contractual obligation;
this can constitute a tort or unlawful act under Dutch law towards these other merchants.

Furthermore, the circumstances described under (a) to (c) can constitute a tort towards the distributor, if the unfair competition as described undermines the distribution system, for example where this invites bound resellers to similar strategies or where this would lead to a situation where third parties might not want to join the selective distribution system. The decision of the Court of Appeal is quashed and the case is referred back to another Court of Appeal.


Article 32 CMR and negative declaratory relief

2009 December 30

Fortis Corporate Insurance v. Uni-Data Logistics et alia

Court: Netherlands Supreme Court

Date: December 18, 2009

LJN Number: BI6315

Case: Theft of computers during CMR road carriage.

Fortis, as subrogated insurer of the party interested in the cargo, initiated proceedings before the Landgericht Stuttgard, ending in an award against the carrier in the amount of € 19.596,93, the equivalent of the limited liability under Article 23 section 3 CMR. Fortis announced further German proceedings in order to get a full compensation for the total damage sustained, upon which Uni-Data decided to initiate negative declaratory proceedings to determine the carriers non-liability in the more favourable Dutch jurisdiction (referred to by the Germans as the "Holländische Trick").

These proceedings were initiated more than one year after the incident, which gave rise to a dispute whether negative declartory proceedings are subject to prescription, and if so which period of limitation applies to such proceedings for relief. Basically there are four options. Under the various views negative declaratory proceedings are:

  • not subject to prescription, as one should always be allowed to ask the Court for a declaration;
  • subject to the one year prescription period of Article 32 CMR;
  • subject to the three year prescription period of Article 32 CMR in case of (the equivalent of) wilful misconduct;
  • subject to the one year prescription period of Article 8:1711 of the Dutch Civil Code.

The Court of first instance chose option three and ruled against Fortis. The Court of Appeal chose option one and ruled against Fortis, after which Fortis brought the case before the Netherlands Supreme Court.

Held: This case requires interpretation of Article 32 CMR, hence interpretation of uniform private law, which should be done in accordance with the rules laid down in Article 31 and Article 32 of the 1969 Vienna Convention on the Law of Treaties. Under the rule laid down in Article 31(1) of the Vienna Convention, Article 32 CMR should be interpreted in accordance with the ordinary meaning to be given to the terms of the CMR in their context and in the light of its object and purpose. Under Article 31(3), subsequent agreement and practice – to be considered together with the context of agreements and instruments made in connection with the treaty’s adoption – have a crucial role in interpretation. The Netherlands Supreme Court will not use the preparatory work of the CMR-treaty and the circumstances of its conclusion, as these are not published or readily available to the public.

From the authentic English and French text of Article 32 CMR – "an action arising out of carriage under this Convention" respectively "les actions auxquelles peuvent donner lieu les transports soumis à la présente Convention", the Netherlands Supreme Court concludes that negative declaratory proceedings fall within the scope of Article 32 CMR. This approach is in line with German Case Law (BGH 20 november 2003, I ZR 102/02, European Transport Law 2004, p. 255, BGH 20 november 2003, I ZR 294/02, European Transport Law 2004, p. 264 and BGH 20 november 2008, I ZR 70/06, European Transport Law 2009, p. 303). The difference between the wordings of Article 32 CMR (that speaks of actions) and Article 31 CMR (that speaks of legal proceedings) does not point at a different scope of application of the two Articles and should be disregarded (compare: Netherlands Supreme Court 11 februari 2000, nr. C98/207, NJ 2000, 420, OGH Österreich 18 september 1985, Transportrecht 1987, p. 219; BGH 20 november 2008, I ZR 70/06, European Transport Law 2009, p. 303).

Where the claimant in the negative declaratory proceedings claims that the damage was not the result of (the equivalent of) wilful misconduct, the applicable prescription period is the one year period of Article 32 CMR. Hence the Netherlands Supreme Court quashed the decisions and declared the case non-admissable.


ASB Greenworld v. NAI and arbitrators

2009 December 7

Court: Netherlands Supreme Court

Date: December 4, 2009

LJN Number: BJ7834

Case: Sagro Aannemingsmaatschappij Zeeland initiated institutional arbitration proceedings under the rules of the Netherlands Arbitration Institute against a German company and against ASB Greenworld. Greenworld appeared in the arbitral proceedings and raised the plea that the arbitral tribunal lacked jurisdiction on the ground that there was no valid arbitration agreement. Arbitrators dismissed the plea and awarded the claim as filed by Sagro. Subsequently Greenworld filed an application to the Court in order to set the arbitral award aside for absence of a valid arbitration agreement. The Court denied the application but the Court of Appeal later indeed did quash the arbitral award for absence of a valid arbitration agreement. Later appeals to the Netherlands Supreme Court were dismissed. This did not end proceedings. Greenworld subsequently held the arbitrators and the Netherlands Arbitration Institute personally liable, for committing an unlawful act (or tort) under Dutch law. The claim was dismissed in two instances and Greenworld appealed to the Netherlands Supreme Court, which led to a landmark decision on arbitrator liability in The Netherlands.

Held: The mere fact that a decision is set aside does not make the decision wrong. Arbitrators render judicial or quasi-judicial functions that render them comparable to judges. Like judges, arbitrators should be at liberty to judge cases. When arbitral awards are set aside, this does not necessarily mean the decisions were wrong and decisions can only be held to be unlawful in exceptional cases.

As a general rule formulated by the Netherlands Supreme Court, arbitrators can only incur personal liability in the event of intent, wilful misconduct or if arbitrators manifestly failed to exercise due care and skill.

The appeal failed.


Manifestly unreasonable dismissal

2009 November 30

Court: Netherlands Supreme Court

Date: November 27, 2009

LJN Number: BJ6596

Case: If an employment contract is terminated by the employer on notice subsequent with
permission of the Dutch Employment Authority (CWI), the dismissal may nevertheless be manifestly unreasonable under Article 7:681 of the Dutch Civil Code.
A dismissal may be manifestly unreasonable if the consequences of the termination
are unreasonably harsh for the employee when compared to the interests of the
employer. This may be the case if no or minimal redundancy payment is made by the
employer. If the Court indeed finds that the dismissal was manifestly unreasonable, it will award the employee reasonable compensation. The court is free to determine the size of that compensation. To avoid uncertainty about the amount of severance pay, some courts applied the Cantonal Court Formula, a formula designed to calculate a compensation in case of a termination of the emploment contract by the Court (which is one of the ways one can end employment contracts in The Netherlands).

The Court of Appeal in The Hague decided on 2 December 2008 that a certain dismissal, given with permission of the Dutch Employment Authority (CWI), was manifestly unreasonable. The Appeal Court awarded a compensation to the employee. To determine the extend of the compensation, the Appeal Court used the Cantonal Court Formula and applied a general deduction of 30%.
Four other Appeal Courts of The Netherlands use a different formula to calculate the compensation in cases like the one at hand. The case in The Hague, was to first to be referred to the Netherlands Supreme Court.

Held: The Netherlands Supreme Court puts first that a compensation based on article 7:681 DCC will only be awarded if it is decided first that – based on all the circumstances of the case – the dismissal is manifestly unreasonable. The sole fact that the employer has not awarded a compensation to the employee is not in itself reason enough to deem the dismissal manifestly unreasonable. According to the Supreme Court the Cantonal Court Formula can not be applied in cases of manifestly unreasonable dismissal. The compensation based on manifestly unreasonable dismissal has a different character than the compensation that the Cantonal Court can award in cases of judicial rescission of the employment contract for changes in the circumstances.

The compensation in rescission cases is a compensation in fairness, but the compensation in unreasonable dismissal is a compensation for damages of the employee as a result of the dismissal. The damages relate to the nature and the gravity of the breach of obligation by the employer. Whether there is manifestly unreasonable dismissal must be decided by the court in proceedings where the normal rules of evidence apply and the damages must be assessed in accordance with the applicable rules. The court must therefore, in cases of unreasonable dismissal, base its decision on the circumstances of the specific situation and must also properly explain his decision. A general formula, such as the Cantonal Court Formula, is not suitable for the legal requirements of these proceedings. The same goes for a general deduction.

The predictability of judicial decisions about the compensation with manifestly unreasonable dismissal is mainly dependent of the manner in which the courts provide an insight to the factors that play a role in their decision. It is conceivable that a certain harmonization of judicial decisions is possible by clearly stating the factors that are of importance in cases like these and make it understandable what financial consequences are attached to each factor.

The decision of the Appeal Court of The Hague is therefore reversed and the Appeal Court of Amsterdam must decide the case anew with observance of this decision of the Netherlands Supreme Court.


VEB et alia v. World Online, ABN AMRO and Goldman Sachs

2009 November 27

Court: Netherlands Supreme Court

Date: November 27, 2009

LJN Number: BH2162

Case: World Online (WOL) was a European Internet Service Provider (ISP) which came to prominence in the late 1990s dotcom boom. CEO Nina Brink stepped out of the company shortly after World Online's IPO in 2000 and cashed in heavily, after which the share price collapsed. The IPO proved a disaster and left the reputations of the banks, the Amsterdam stock exchange and the company itself tarnished.

Investor group VEB, which represents nearly 11,000 small investors, initiated legal proceedings against World Online and its IPO managers ABN AMRO and Goldman Sachs, alleging that misleading information had been supplied in the course of the IPO. The Amsterdam Court of Appeal ruled partially in favour of the VEB. According to the Court of Appeal World Online and ABN AMRO and Goldman Sachs acted improperly towards investors buying shares in the IPO or shortly thereafter. On four counts the prospectus was incorrect and incomplete, resulting in World Online, ABN Amro and Goldman Sachs misleading investors. Both parties appealed to the Netherlands Supreme Court.

Held: The Netherlands Supreme Court rejected the complaints of World Online, ABN AMRO and Goldman Sachs. The points on which the Court of Appeal had established that the defendants committed an unlawful act thereby remain in position.
The appeal of VEB is succesful in two additional points. First, the prospectus was misleading where it failed to disclose the price for which Nina Brink, the chairman of World Online, had sold the shares that she indirectly owned through her company Kalexer, about three months before the IPO. Second, the opening price as communicated by ABN AMRO in the first trading day was misleading.

The consequence of this ruling

It has now been established that World Online, ABN AMRO and Goldman Sachs committed a tort (unlawful act) on the following counts:

  • The issue prospectus contains misleading information on the career of CEO Nina Brink and the acquisition of a subsidiary Telitel;
  • The issue prospectus was not correct where it stated that the sale (almost three months before the IPO) by the chairman of World Online shares it owned through her company Kalexer, had occurred for a purchase price of $ 6.04 per share ;
  • The statements of CEO Nina Brink to the press just before the IPO gave the public a false impression about the size of the stake held by founder Nina Brink in World Online. Furthermore, World Online, ABN AMRO and Goldman Sachs should have taken corrective action when confusion arose;
  • In the period just before and after the IPO World Online issued press releases about a dozen alliances with major companies, but in fact there was hardly any, and none had real substance. ABN AMRO and Goldman Sachs failed in their duty as lead managers to guide and instruct World Online so that no overly optimistic picture of its business would be created.
  • Finally, ABN AMRO has acted unlawfully at March 17, 2000 where it effectuated a deceptive opening price of € 50.20, lying well above the fixed issue price.

This decision ends part of the dispute. Still open is the actual discussion about whether damages have been sustained as a result of the unlawful acts that now have been established, and if so, what damages can be awarded.