Vivian van der Kuil
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Vivian van der Kuil is a lawyer in the Law office AKD Benelux Lawyers. Vivian specialises in emergency response in the shipping and energy sectors, including salvage, total loss, collision, fire and explosion, limitation of liability, wreck removal, piracy, the arrest of ships and both civil and criminal pollution liabilities with respect to seagoing vessels, inland waterway vessels including yachts. She acts for charters, traders, shipowners, H&M underwriters and P&I clubs on charter party, bill of lading, offshore and general shipping issues. Vivian also deals with insurance coverage and other shipping and energy-related commercial and contractual disputes.Vivian is a litigation specialist bringing her experience in the Dutch Civil and Criminal Court as a fomer judge and public prosecutor to bear in complex proceedings, reaching efficient and creative solutions. Before joining the legal profession, Vivian completed officer training at the Royal Dutch Institute for the Navy and subseqently worked as an officer of the Operations/Navigation Service with the Royal Dutch Navy.
EU Trans-border-arrest: The Brussels I bis Regulation
A lot of things can happen during shipment of goods; the vessel carrying the goods can collide with another vessel and the vessel can subsequently be ship wrecked. Cargo can fall over board, stowage and/or lashing can prove to be insufficient and vessels can suffer a so-called ‘black-out’ which can cause decay of perishable goods due to failure of reefers. Furthermore freight, management/agency fees and/or bunkers may remain unpaid. In order to be able to enforce such claims there are two important issues to consider. First of all, it is important to try to arrange for security for these possible claims and in respect of damage to gather evidence in respect of its cause and extent. The first step is, of course, always to try to arrange for this amicably, but failing such cooperation enforcement measures may be necessary. What the possibilities are for this differs from jurisdiction to jurisdiction. The Dutch jurisdiction offers a wide variety of possibilities and the specialized maritime chamber of the Rotterdam court is easily accessible and well experienced with all kinds of transport and shipping related issues. Furthermore they are available on a 24/7 basis which in transport cases can really make the difference.
Previously these measures were only available if the vessel was still located in the Netherlands and the measure effected in the Netherlands. However the revised Brussels I Regulation (1215/2012) has introduced an important change making it possible to enforce provisional measures throughout the European Union on the basis of a simple application by a party in one of the member states. This means that certain (interim) measures available under Dutch law now can also be exported to and enforced in other EU countries. So even if a vessel is not situated in the Netherlands there may be possibilities to use the broad spectrum of interim measures Dutch law offers for the benefit of the claimant in order to establish the damage and/or enforce payment of the claim.
Which interim measures there are available under Dutch law will be explained below before explaining how the Brussels I Regulation makes it possible to enforce these throughout the EU.
- Interim/provisional measures
Under Dutch Procedural Law it is possible to obtain an attachment order against the debtor’s assets (for instance a vessel or bank accounts) before having obtained a final judgment or award on the merits against the defendant. Such conservatory attachment to obtain security for your claim can be made before a procedure on the merits has actually even been started, whether in the Netherlands or in another jurisdiction. Furthermore, it is not necessary that the claim itself be subject to Dutch law and jurisdiction. The procedure will be discussed in more detail below.
The same conservatory attachment can be used when there is a fear of evidence being lost or hampered with. It is then possible to request leave for a so-called conservatory attachment of documents and other evidence (for instance on electronic devices) to ensure that no evidence is lost. Traditionally this was only an option in cases regarding intellectual property but a couple of years ago the Supreme Court in the Netherlands has determined that the option is also available in other cases. However there are certain restrictions; the most important being that a bailiff may only attach the documents indicated in the leave granted by the court and Separate disclosure proceedings (Article 843a of the Code of Civil Procedure) are necessary for the documents to be provided to the party requesting the attachment.
There is also a possibility to file a petition requesting:
- a preliminary hearing of witnesses;
- a preliminary survey by a court-appointed surveyor; or
- a preliminary inspection of the place where the damage might have occurred (Article 202 of the Code of Civil Procedure).
Such a hearing, survey or inspection takes place before the proceedings on the merits have begun, in order to establish the facts of the matter and assess whether there actually is a claim. However, the court may allow for such a preliminary hearing of witnesses, preliminary survey or inspection only if it is established that it has jurisdiction to hear the claim on the merits (Article 203 of the Code of Civil Procedure).
In addition article 8:494 or 8:495 of the Civil Code give the carrier – as well as the party entitled to delivery of the cargo – the opportunity to request the court to order a preliminary investigation into the cause and extent of any suspected damage to cargo before, on or immediately after its delivery. These provisions offer wider possibilities for the way in which a survey is conducted and for the court-appointed surveyor. Furthermore, they do not require the court to establish jurisdiction on the merits before deciding on a request for such an inspection to take place. Article 633 of the Code of Civil Procedure determines that the court at the place where the cargo is located when the request is made has jurisdiction to order the investigation, as provided for in articles 8:494 and 8:495 of the Civil Code.
The court appointed surveyor has to be granted access on board the vessel and his request to be provided with documentation, electronic evidence and other evidence must be obeyed as he is authorized by the Court to answer the questions to be formulated in the petition and to do everything that is necessary in order to arrive at well documented and motivated answers.
A court survey can be arranged for at short notice before arrival of the vessel to Rotterdam, for instance. This kind of court survey is an effective remedy for the problem that parties other than the owner usually do not have access to the vessel and the evidence on board, making it very hard to prove the cause of the damage or to rebut the arguments raised by the owner of the vessel.
If the court survey has taken place in the presence of or after proper notice to the debtor in the way as ordered by the Court, the report issued is presumed to be accurate. Although Dutch law of evidence allows the debtor to prove contrary to the findings of the court appointed surveyor, it goes without saying that the party whose claims are supported by the report does have an advantage over the other parties.
- (Conservatory) attachment of assets
The Netherlands and especially Rotterdam are sometimes called an “arrest paradise” because of the fact that it is quite easy to get permission from the Court for an attachment of assets of a (potential) debtor. While in other countries the 1952 Arrest Convention broadened the possibilities for a ship arrest, in the Netherlands the possibilities are somewhat limited by this convention. Whereas the Dutch Code of Civil Procedure allows for an attachment of almost every assets for almost any claim including future claims, under the 1952 Arrest Convention a ship arrest is only possible for a so called maritime claim. What constitutes a maritime claim is defined in art. (1) (a) to (p) of the 1952 Arrest Convention. For instance a cargo claim falls fully within the category of art. (1) (a) “damage caused by any ship either in collision or otherwise”.
The 1952 Arrest Convention applies when dealing with an attachment of a vessel that sails under the flag of a signatory state to the convention.
A vessel can be attached in the Netherlands after an arrest petition is filed with the Court and the Court has granted leave for the attachment. In Rotterdam it is possible to address the Court even outside office hours, at night or during weekends. If necessary it is possible to pay a judge a home visit to file the petition and obtain leave. Although it’s quite easy to obtain leave certain points must be covered in the arrest petition. First of all the applicant for the arrest must identify what the basis for his claim is. For instance when the claim arises out of a contract of carriage a copy of the contract and/or of the bill of lading conditions must be submitted to the Court together with the application. If the claim is based on unpaid invoices then any claim/demand notes that were sent must be submitted to the Court. And finally the defences by the debtor against the claim known by the applicant must be explained to the Court.
Depending on the kind of arrest certain other requirements must be met. For instance the Court sometimes wants to know why the applicant wants to arrest these specific assets. Starting point for the Court usually is that the arrest is made in the least burdensome manner, unless the applicant makes clear why these specific assets need to be arrested. When dealing with a ship arrest this usually does not constitute a problem.
The arrest application is a so called “ex parte application” and consequently the debtor is not heard by the Court on such an application. The applicant for arrest generally has, to a certain extent, the benefit of the doubt when seeking the leave for the arrest. If the applicant has an arguable case, both with regard to liability and with regard to the quantum of the claim, then the Court is likely to grant leave for the intended arrest. The Court will base itself on the information contained in the application for arrest and, at this stage, normally applies only a marginal test whether the claim as stated could arguably qualify as a ground for the attachment of assets.
The arrest petition must mention all proceedings that are pending in either the Netherlands or abroad, that may be relevant for the assessment of the arrest application by the judge. If proceedings are already pending, either in the Netherlands or abroad, then this merely needs to be mentioned. If proceedings are not yet pending Dutch law prescribes that the Court determines a date before which such proceedings must be started. As a general rule 14 days will be granted by the Court from the date of the first arrest. When a longer period is required this must be specifically requested and this request must be substantiated. Usually courts allow a party a longer period when foreign parties are involved. It is possible to ask the Court for an extension of this period and such a request is often granted.
It is important to note that if you intend to make an arrest in the Netherlands you also must be prepared to start legal proceedings against your debtor. If you do not comply with the terms set by the court to start proceedings on the merits the arrest will become null and void and liabilities may ensue from this.
It is possible to increase the principal claim amount with a supplement for interest and costs. The principal amount that is increased with the usual supplement makes the total amount for which the leave for arrest can be requested. Only under extraordinary circumstances does the Court demand (counter) security from the party requesting leave for the attachment.
- Create jurisdiction on the merits by arresting assets/art. 767 DCCP
Once an attachment is made proceedings on the merits have to be initiated within the period set by the Court. When subsequently a judgment or award in the substantive action against the ship owner is obtained, it can usually be enforced in the Netherlands and the debt can be recovered under the guarantee or for instance from the proceeds of the auction of the vessel. If there is no other way to obtain a title which can be enforced in the Netherlands article 767 of the Code of Civil Procedure allows to initiate proceedings before the Court which has granted the leave to arrest the vessel.
The question of course is when a judgment or award of a foreign Court or Tribunal which has jurisdiction on the substantive action is not enforceable in the Netherlands. This could be the case when for instance there is no convention in force between the country where the Court or Tribunal is seated and the Netherlands which convention would allow the enforcement of judgments or award in civil or commercial matters. A Dutch judge will, in the absence of such convention, only allow for enforcement of such foreign judgment or award when certain requirements have been met. For instance the Court or Tribunal has to be a generally approved foreign Court and the Dutch judge will check whether there was a fair trial and whether the principles of due process have not been violated.
So if the owners are based in for instance the Marshall Islands or Liberia or Panama and no “approved” forum has been agreed upon, a Dutch Court would accept jurisdiction based on Article 767 of the Code of Civil Procedure.
- The Brussels I Regulation (1215/2012)
The Brussels I Regulation imposes uniform rules throughout the European Union regarding international jurisdiction and the recognition and enforcement of civil and commercial judgments. The revised Brussels I Regulation (1215/2012) introduces an important change whereby it is possible to enforce provisional measures throughout the European Union on the basis of a simple application by a party in a member state. As a result it is now also possible to apply a Dutch attachment order within the European Union, provided that the Dutch Court has jurisdiction over the merits of the case – for example when the parties involved have agreed on a jurisdiction clause appointing a judge court.
Previously ex parte provisional measures fell outside the scope of chapter III of the Brussels I Regulation on recognition and enforcement.
Article 35 of the Brussels I Regulation determines that an application for a provisional measure which may be available under the law of a member state may also be made to a court of that member state even if the courts of another member state have jurisdiction as to the substance of the matter. This means that, if it is determined that a certain measure qualifies as a provisional measure, the court may decide on the matter without jurisdiction as to the merits of the claim.
A preliminary survey, as discussed here above, may under certain circumstances, qualify as a provisional measure within the meaning of Article 35 of the EU Brussels I Regulation if it is established that the measure aims to prevent evidence from being lost.
Article 2(a) determines that: “for the purpose of Chapter III, judgment includes provisional, including protective measures ordered by a court or tribunal which by virtue of this Regulation has jurisdiction as to the substance of the matter. It does not include a provisional, including protective, measure which is ordered by such a court or tribunal without the defending being summoned to appear, unless the judgment containing the measure as served on the defendant prior to enforcement;”
This makes it possible to apply for leave for an attachment in the Netherlands if a Dutch court has jurisdiction over the merits of that case and request the court to extend the leave to other EU-countries if certain criteria are met. Recent case law has proven that this indeed is possible and the theory is already successfully being put in practice. This means that even if the attachment is not made within the Dutch jurisdiction it is possible to benefit from the straightforward procedure for an attachment that procedural law offers without the restrictions other countries/courts apply when requesting leave for an attachment. For instance in respect of counter security, amounts to be paid to the court and/or hearing of the other parties involved. Recent cases have proven that the Dutch courts are willing to grant leave for arrest in multiple EU-countries, the only hurdle to be taken is that the Dutch courts have jurisdiction over the merits. This is however something that can be easily fixed. For parties who expect to be experiencing problems with enforcing claims in the future it may be worth considering to include such a clause in contracts to be concluded in order to make it possible to apply for an order that can be executed throughout the EU and benefit from the possibilities Dutch law offers.
