On 18 September 2009, the Netherlands Supreme Court held that the State of the Netherlands (the “State”) was liable for an unlawful governmental action in a criminal case, particularly in relation to the confiscation of proceeds from crime. The case originated from a conviction of a person for international drug trafficking in 2002. He and three brothers held shares in the English company “Newbay”. As part of a criminal financial investigation by the Dutch authorities, intended to seize and forfeit illegal proceeds, the Dutch public prosecutor filed a request for assistance in the United Kingdom and a prejudgment seizure was levied on certain property of Newbay. Upon approval by an English Court, some property was sold with total proceeds of GBP 1,275,490. In summary proceedings, a Dutch Court ruled that the attachment of some property had to be lifted and the British authorities transferred the proceeds of the sale of some of the property, after deducting certain costs and an amount withheld. The total amount transferred by the British authorities was GBP 693,528. Thereupon, Newbay charged the State to pay compensation as it did not receive the full proceeds of the sale of the hotel. The Netherlands Supreme Court held that the State was liable regardless of the fact that the British authorities had acted in accordance with English law.

This means that State liability could be the result of an unlawful governmental action in a criminal case, particularly in relation to the confiscation of proceeds from crime, even tough such action is executed by a foreign state in accordance with the law of that foreign state.