International Law

FOREIGN CLAIMS SECURED BY DUTCH CARIBBEAN SECURITY RIGHTS

By Karel.Frielink

The claim must be sufficiently identifiable

Many financing arrangements are of a cross-border nature. For instance, a loan agreement governed by English law with the loan secured by a Netherlands Antilles right of pledge. This raises all kinds of questions.

Any foreign right, for instance a claim, in which a Netherlands Antilles pledge is created, must be sufficiently identifiable (?met voldoende bepaaldheid omschreven?) within in the meaning of section 3:84(2) of the Netherlands Antilles Civil Code.

Also, if one wishes to create a right of pledge in a foreign right, such a right must be a registered claim (?een tegen één of meer bepaalde personen uit te oefenen recht dat niet aan toonder of order luidt?).

The following serves as an explanation of the example given. As a pledge (governed by Netherlands Antilles  law) merely serves to secure a claim (governed by English law), the contents of the pledge is determined by the secured claim. A pledge may secure both existing and future claims, as long as such claims are sufficiently specific or determinable. Generally speaking, a claim is sufficiently determinable if the claim arises from a contract granting a credit facility and the amount of the claim is, for instance, not arbitrary.

Karel Frielink
Attorney (Lawyer) / Partner

Full post as published by Karel's Legal Blog on October 18, 2008 (boomark / email).