Conservatory Arrest

In International Trade it is well known that the jurisdiction of the Netherlands has a broad range of possibilities for creditors to get security for an alleged claim, even before judgement. This has lead to a practice where creditors wait for a proper moment to get security for a claim, generally when a vessel is reported to call on Rotterdam or when the creditor is informed that its debtor has acquired a large stock of goods stored somewhere in the port area. This introduction to Dutch arrest proceedings is meant to provide you with some information as to the way these proceedings take place in the Netherlands.

Although translation of legal terms can create some misunderstanding such a seizure of assets is commonly referred to as arrest or conservatory attachment. Basically the procedure is the same for the different forms of conservatory attachment, like:

  • attachment of assets in the possession of a debtor;
  • garnishment of assets under a third party, also referred to as third party attachment;
  • attachment of shares in a company (the shareholder must be the debtor);
  • arrest of vessels;
  • arrest of airplanes;
  • attachment of real estate;
  • attachment of property alleged to belong to the debtor.

Prima Facie Evidence

Any party with a prima facie claim may file a petition for a Court order (the applicability of international treaties and conventions makes the arrest of vessels and airplanes slightly different). The petition must be made by a lawyer admitted to the Dutch bar. It is important to provide your lawyer with as much information as possible, but at this stage it is not necessary to supply full proof and original documents. A well documented fax message and copies of documents relevant to the claim will do in most cases. Based on the contents thereof a petition will be drafted and can be submitted within hours after your first contact.

Generally petitions for the attachment of goods are granted by the president of the District Court, solely based on the allegations in the petition, without hearing the debtor (who, for example,may reside in Hong Kong and may not hear of the attachment until days thereafter). After the president’s consent has been obtained, the attorney can instruct a bailiff to make the attachment. In very urgent cases, like shipping cases where a vessel may leave soon, the time between instruction of the attorney and the actual arrest can take no longer than a few hours and the president will even hear the attorney during weekends, if necessary. Needless to say that the president won’t be pleased to find out that he missed his son’s football match for a petition that was not that urgent after all. For less urgent cases procedures take generally two to three days.

The Claim and Jurisdiction

Generally claims are settled shortly after the arrest. In other cases the debtor will provide a (bank) guarantee, in order to get attachment lifted. If not, proceedings should be commenced within a period as determined by the president of the District Court, in order to maintain the validity of the conservatory attachment. In some cases the attachment actually establishes jurisdiction within the Netherlands, even if none of the parties is domiciled in the Netherlands. This may be of great value to the creditor, who couldn’t find a suitable forum beforehand.

Challenge in Summary Proceedings

Any debtor is entitled to start summary proceedings to secure an immediate release of the goods. Given the fact that the attachment has been made without hearing of the debtor the court generally grants such hearing at very short notice, and again even during weekends in extremely urgent cases. Unfortunately, the tight schedules and workload of the Dutch courts make it sometimes means thatup to a few weeks can pass between the original attachment and a hearing. In such proceedings the position of the debtor is difficult as the arrest remains in place until the hearing.

The court will lift the attachment if the debtor can prove that the attachment is without merit or for example, if he succeeds in showing that the claim is time-barred. In other cases, where the debtor can show that he has a good defence and the judge decides that it is more or less obvious that he has a better chance to win the case than the claimant, the attachment can be lifted. However, it remains very difficult to have an attachment lifted, as the basic rule remains that any creditor is entitled to security, whatever his claim. Nevertheless, it can be very useful to ask the president of the District Court for counter security for false arrest in such cases, which can result in the lifting of the arrest if the claimant refuses to live up to an award for counter security.

Please be reminded that although attaching goods is almost always possible, this does not mean that the attaching party can not be held liable for the damages sustained by the alleged debtor.

Arrests of Vessels, Garnishment of Commodities

The majority of conservatory attachments handled by our firm are arrests of vessels in Rotterdam, Flushing ("Vlissingen", the entrance to the port of Antwerp, Belgium), and garnishment of goods stored at various warehouses in the Rotterdam and Flushing port areas. It goes without saying that our knowledge of the rules and regulations and case law can be of great value to any party looking for security for a claim or confronted with a sudden attachment in the Netherlands. As a matter of routine we negotiate the terms on which arrests can be lifted, both for the arresting party and for the alleged debtor.

Further information

For further information, please feel free to contact our Transport and International Trade contact person.

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