NCC allows monetary claim in summary proceedings

On 11 June 2021, the Netherlands Commercial Court (NCC) allowed a monetary claim of a US-based company on a Dutch holding company, and its statutory director, in summary proceedings. Attorney-at-Law Mathijs van Riet discusses the position of the NCC and its recent verdict.

Netherlands Commercial Court

The NCC was founded on 1 January 2019, as a part of the District Court of Amsterdam and the Amsterdam Court of Appeal. The aim of the NCC is to offer parties to an international commercial contract to resolve their legal issues before an internationally focussed panel. At the NCC, the complete proceedings, including the court decision, are in English. Furthermore, a court decision of the NCC has the same legal effect of a district court verdict and can be enforced in the same way throughout all of the European Union.

In order to submit a legal issue before the NCC, the issue must meet following conditions:

1. the claim concerns a civil or commercial matter, which lies within the autonomy of the parties and is not subject to the exclusive jurisdiction of another court;
2. the claim concerns an international dispute;
3. the District Court of Amsterdam is competent to hear the claim; and
4. the parties involved have agreed in writing that the court proceedings will take place before the NCC, in English.

International dispute payment share purchase price

In the recent NCC verdict, the facts were as follows. The claimant is a US-based diversified asset management and investment firm with interests in sports. In May 2020, the claimant sold its share The portion of registered capital of a private or public limited company
» Meer over share shares in an equestrian show jumping business company to a German businessman and investor, living in Switzerland (the purchaser). The purchaser is the ultimate beneficial owner of a Dutch Holding company. 

The claimant sold its shares in the equestrian show jumping company to the purchaser for € 169 million. In this transaction, the Holding was guaranteeing for the purchaser’s payment obligations. The closing of the sale was to take place in November 2020, however, the purchaser did not pay the full share The portion of registered capital of a private or public limited company
» Meer over share share purchase price in due time. Therefore, the claimant summoned both the purchaser and the Holding to appear before the NCC, where the claimant claimed inter alia payment of the outstanding purchase price, in a summary proceedings.

Summary proceedings

As proceedings on the merits in the Netherlands can take up to years, under Dutch law it is possible to claim an interim injunction in summary proceedings. The principal idea of a judgment in summary proceedings is that the claimant is ensured of a certain status quo, should the claimant enter into main actions. Moreover, summary proceedings tend go much faster than proceedings on the merits. For example, in Dutch summary proceedings, it is possible to have a fully enforceable court verdict within a month.

Monetary claims in summary proceedings

It is possible to submit monetary claims in summary proceedings. Though, in order to have a monetary claim allowed in summary proceedings, the claimant has to meet higher standards than normally required in proceedings on the merits. The Dutch court will assess whether (i) the claim is likely enough to be allowed in potential main actions, (ii) the claimant has a pressing need to obtain interim injunction urgently and (iii) the defendant party would be able to recover the money back from the claimant, should the claim be denied in proceedings on the merits.

NCC verdict

After conclusion of the share purchase agreement, the parties took several steps in execution of the agreement. For example, the purchaser already obtained power over the board of the equestrian show jumping company. Therefore the NCC found that claimant’s claim appeared to be sufficiently valid to be granted in potential proceedings on the merits.

Additionally, the NCC considered that the immediate measure was required. The claimant was still the shareholder of the equestrian show jumping business company, while that company was de facto run by someone else, who did not run any economic risk in doing so. The NCC found this situation highly undesirable. The NCC therefore allowed the claim and ordered the purchaser to pay the remaining part of the purchase price.

Assistance with proceedings in the Netherlands

The NCC offers parties involved in an international dispute the option to resolve their issue before a commercial focussed panel in the Netherlands. Moreover, instead of entering into long lasting proceedings, under some conditions it is possible to submit monetary claims before Dutch courts in summary proceedings.

Do you have any questions with regard to commercial or corporate litigation in the Netherlands? Our attorneys at AMS Advocaten have many years of experience and are happy to help!