Short Reads

Entitlement of the pledgee to enforce security attached to a receivable of the pledgor

Entitlement of the pledgee to enforce security attached to a receivable of the pledgor

Entitlement of the pledgee to enforce security attached to a receivable of the pledgor

14.04.2016 NL law

 

The Dutch Supreme Court has recently provided a ruling confirming the entitlement of the pledgee to enforce security attached to a receivable pledged to it.

 

The Dutch Supreme Court 18 December 2015 (ECLI:NL:HR:2015:3619)

This ruling addresses a question which is of great relevance to the Dutch finance practice: is the holder of a disclosed right of pledge over a receivable entitled to enforce a right of pledge over other receivables which was created as security for the receivable pledged to it? The Supreme Court ruled that in such a case, the entitlement of the pledgee to collect the receivable pledged to it also comprises the entitlement to enforce the security rights attached to that receivable. According to the Advocate General at the Supreme Court, although the above question has been widely answered affirmatively in legal literature, the ruling has provided welcome confirmation.

In this case, Marell had created a right of pledge over certain receivables owed to it by its debtors for the benefit of Pegas. Pegas had created a right of pledge over certain receivables owed to it by its debtors (including Marell) for the benefit of its financing bank. The bank had informed certain debtors of Marell that they could only discharge the receivables owed by them to Marell by making payment to the bank. Marell initiated interim relief proceedings against the bank, claiming that the bank must inform Marell's debtors that they can only discharge the receivables owed by them to Marell by making payment to Marell.

The question before the Supreme Court was whether the bank was entitled to collect the receivables owed by Marell's debtors to Marell which were subject to the right of pledge created by Marell for the benefit of Pegas. Previously, the Amsterdam Court of Appeal had ruled that the bank was precluded from collecting the receivables owed by Marell's debtors to Marell on the basis that repledging (herverpanding) is prohibited according to section 3:242 Dutch Civil Code, which sets out that a pledgee is not entitled to repledge the property pledged to him, unless this power has been unequivocally granted to him.

In view of the bank's entitlement to collect the receivables pledged to it, the Supreme Court ruled that the bank was also entitled to enforce any rights of pledge created over receivables owed by debtors of the pledgor to the pledgor as security for the receivables pledged to the bank. In practice, after having informed the debtors of the pledgor of the rights of pledge created over the receivables owed by those debtors to the pledgor, the bank was entitled to collect such receivables up to the amount of the receivables owed to it by the pledgor.

The Supreme Court succinctly dealt with the approach of the Court of Appeal regarding the prohibition on repledging and ruled that such prohibition relates to situations in which a pledgee conducts an act of disposition (beschikkingshandeling) in respect of property pledged to it by creating a right of pledge over such property. According to the Supreme Court, no such situation applies in the dispute between Marell and the bank. Pegas had not created a right of pledge over the receivables pledged to it by Marell. Instead Pegas had created a right of pledge over receivables owed to it by its debtors, including Marell. A right of pledge (created by Marell over certain receivables owed to Marell by Marell's debtors) was indeed attached to the receivables owed by Marell to Pegas, but this is not the same as the creation of a right of repledge (herverpanding) by Pegas over receivables owed to Marell by Marell's debtors which were pledged to Pegas.

This judgment is relevant for the Dutch finance practice because it further removes uncertainty about the status of rights of pledge on secured receivables. If a pledgee is entitled to enforce its right of pledge on receivables, it is also entitled to enforce security attached to such receivables.

 

Related news

23.07.2018 NL law
Evaluatie Wbfo en start consultatie over mogelijke wijzigingen/wettelijke maatregelen voor vaste beloning

Short Reads - Op 17 juli 2018 heeft de minister van Financiën de twee rapporten over de evaluatie van de Wet beloningsbeleid financiële ondernemingen (Wbfo) aangeboden aan de Tweede Kamer. Tevens is een maatschappelijke consultatie naar drie wettelijke maatregelen met betrekking tot de vaste beloningen geopend.

Read more

16.07.2018 NL law
ISDA publishes consultation on benchmark fallbacks

Short Reads - ISDA publishes consultation on benchmark fallbacks. As part of an initiative to amend its standard derivatives documentation to facilitate the replacement of existing interbank offered rates (IBORs) by risk free rates (RFRs), the International Swaps and Derivatives Association (ISDA) has published a consultation paper on certain adjustments required to such RFRs.

Read more

10.07.2018 EU law
Hof van Justitie EU oordeelt over reikwijdte 'beroepsgeheim' financiële toezichthouders voor bedrijfsgegevens

Articles - In een arrest van 19 juni 2018 oordeelt de Grote kamer van het Hof van Justitie EU over de reikwijdte van het 'beroepsgeheim' van financiële toezichthouders voor bedrijfsgegevens. Het hof oordeelt dat de informatie die zich in het toezichtsdossier bevindt niet onvoorwaardelijk vertrouwelijk van aard is en bijgevolg onder het beroepsgeheim van de toezichthouder valt. Gegevens die mogelijk commerciële geheimen zijn geweest, worden in beginsel geacht niet meer actueel en dus niet langer geheim te zijn, wanneer die gegevens ten minste vijf jaar oud zijn.

Read more

11.07.2018 NL law
Update initiatiefwetsvoorstel introductie instemmingsrecht en aanscherping vaste beloning bankiers

Short Reads - Op 25 april 2018 heeft de Afdeling advisering van de Raad van State (hierna Raad van State) een kritisch advies uitgebracht over het initiatief-wetsvoorstel om de wet op het financieel toezicht (Wft) te wijzigen. Op 5 juli 2018 is dit advies tezamen met de reactie van de initiatiefnemers van het wetsvoorstel op het advies van de Raad van State gepubliceerd, evenals het aangepaste wetsvoorstel dat is aangeboden aan de Tweede Kamer.

Read more

Our website uses cookies: third party analytics cookies to best adapt our website to your needs & cookies to enable social media functionalities. For more information on the use of cookies, please check our Privacy and Cookie Policy. Please note that you can change your cookie opt-ins at any time via your browser settings.

Privacy – en cookieverklaring