There is a high trading volume between the Netherlands and Turkey. Turkey has enormous potential for foreign investors, in particular Dutch investors. Furthermore, the Netherlands is a major export partner of Turkey. Due to the trade between both countries, debt-collecting business seems to get more important by the day. What if a contracting party defaults on payment or fails to deliver the ordered goods?

Leaving aside which law is applicable to the contract, the Dutch court may be competent to hear the claim (e.g., when the party in default is domiciled or habitually resides in the Netherlands, or if the contractual obligation is to be fulfilled in the Netherlands). In this article, the Dutch debt collection procedure will be discussed briefly in comparison with the Turkish procedure.

In Turkey debt collection procedures are dependent on the nature of the debt (e.g., enforcement proceedings with court judgment, without court judgment for any kind of unpaid debt and bill of exchange): Conversely, in the Netherlands there is one debt collection procedure to be followed for all claims, which results in a transparent and open system.

If the debtor is not prepared to pay the debt voluntarily, in both countries external debt collection measures can be taken to pass on the claim for collection to a law firm. In the Netherlands, it is necessary that the debtor be in default before any legal action is taken. A written notice of default may be sent to the debtor by the lawyer, which is a written demand to the debtor giving him a reasonable period of time to comply with the contract. In some cases, the debtor is in default without a warning or a notice of default being required (e.g., in case the agreed strict payment term has been expired). In Turkey, a written notice of default can be served via the notary, but is it also possible to proceed for a debt collection without giving the debtor a written notice of default at all. If the debtor does not comply with the demand, he or she may be advised by his or her lawyer to bring the claim before the court.

Under Dutch law, a court judgment entitles the creditor to proceed for enforcement, while in Turkey, in some cases under strict conditions, seizures can take place without a court judgment. In the Netherlands, it is not possible to proceed for a debt collection without a court judgment. However, unlike many other countries, according to Dutch law it is possible to obtain a permission from the court to levy a prejudgment seizure in order to secure rights. With such permission, it is possible to freeze all assets of the debtor until the court has given its judgment about the claim. It can be a cost-efficient and powerful measure to convince the debtor to pay the debt(s); it is however not always without risk.

Under Dutch law, from the day that the debtor is in default he must pay statutory commercial interest on the outstanding amount to the creditor. The statutory commercial interest is currently 8%. Furthermore, it is also possible to claim extrajudicial costs in the case where a claim must be passed on to a lawyer for collection.

Contrary to the Turkish, system a Dutch lawyer is able to act on behalf of a client without a notarized Power of Attorney. The Power of Attorney, which gives the Turkish lawyer necessary authority to pursue the claim, must be signed by the authorized signatories of the client, certified by a civil-law notary, and in the case of a foreign claim an Apostille stamp must be obtained as well. In the Netherlands, it is sufficient that the lawyer receives an instruction from the client. This can even be an oral instruction.

The physical distance between the contracting parties, cultural differences, language discrepancy, disparities in local legislation or even simple differences in time are examples of difficulties in doing international business. Accordingly, a thorough knowledge of the Dutch and Turkish legislation is necessary if disputes arise between these parties in the course of business.