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Recognition of foreign proceedings
Under what circumstances will the courts in your jurisdiction recognise the validity of foreign insolvency proceedings?
Under Article 16 of the EU Insolvency Regulation (1346/2000), the opening of insolvency proceedings in an EU member state (except for Denmark) and the effects thereof are directly recognised in the Netherlands.
In the absence of a treaty, convention or regulation on international insolvency law matters, the effects of insolvency proceedings opened in other jurisdictions are recognised in the Netherlands only to a limited extent. According to Dutch case law and legal doctrine, the basic assumption is that foreign insolvency proceedings have a mere territorial effect. Consequently:
- a foreign moratorium or bankruptcy does not extend to the debtor’s assets situated in the Netherlands;
- no automatic stay applies; and
- individual creditors are not prevented from taking recourse against the debtor’s assets.
Over the past decades, the Supreme Court has gradually observed a less restrictive view with respect to the recognition of foreign bankruptcies (sometimes referred to as the principle of (limited) territoriality). In Yukos (Supreme Court, September 13 2013, ECLI:NL:HR:2013:BZ5668), the Supreme Court clarified the scope of the recognition of foreign insolvency proceedings in the Netherlands.
The effects of foreign insolvency proceedings will not be recognised where they might result in unsatisfied creditors no longer being able to take actions against the debtor’s assets in the Netherlands. Provided that the foreign judgment is not contrary to Dutch public policy, and in the absence of insolvency proceedings against the debtor in the Netherlands, a foreign trustee can perform acts of administration and disposal with respect to assets situated in the Netherlands – including alienation of the assets and transfer of the proceeds into the foreign bankruptcy estate – provided that the trustee is empowered to do so under its own lex concursus. However, any attachments in the Netherlands by individual creditors levied up to the moment of transfer must be respected. A foreign insolvency trustee or comparable office can act in the Netherlands without a prior court decision, exequatur or court recognition of the foreign proceedings, provided that the lex concursus allows for such actions.
Winding up foreign companies
What is the extent of the courts’ powers to order the winding up of foreign companies doing business in your jurisdiction?
Under the EU Insolvency Regulation (1346/2000), the Dutch courts have authority to open insolvency proceedings against foreign companies whose centre of main interest is in the Netherlands. Under domestic insolvency law, the jurisdiction of the Dutch courts is in principal determined by the debtor’s domicile. If the debtor has no domicile within the Netherlands but conducts business in the Netherlands, the district court within whose district its office is located has jurisdiction under the Bankruptcy Act 1893.
Centre of main interests
How is the centre of main interests determined in your jurisdiction?
In accordance with the Insolvency Regulation, the centre of main interests is defined as the place where the debtor conducts the administration of its interests on a regular basis, as ascertainable by third parties. There is a rebuttable presumption that a corporate debtor's centre of main interests is located at the place of its registered office.
What is the general approach of the courts in your jurisdiction to cooperating with foreign courts in managing cross-border insolvencies?
Dutch insolvency law contains no requirements for Dutch insolvency trustees with regard to cooperation with insolvency trustees and courts in non-EU cases. However, Dutch insolvency trustees and supervisory judges are generally willing to investigate the possibility of making specific arrangements with foreign trustees on a voluntary basis in order to minimise costs and maximise recoveries for the joint creditors – for instance, by promoting the sharing of relevant information among the parties and the international coordination of related activities in the insolvency proceedings.
The Netherlands has not adopted the United Nations Commission on International Trade Law Model Law on Cross-Border Insolvency.
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