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Appointment of maritime court surveyors in the Netherlands
On 14 January 2021 more than 260 participants watched the Webinar ‘Arresting developments, Debt recovery’ organised by ITIC. Our partner Richard van ‘t Zelfde was one of the three speakers and discussed the possibility of ship arrests in the Netherlands. Watch here for the full video of the Webinar to learn more on ship arrests in the Netherlands, the Middle East and the USA.
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The BOW JUBAIL – a case of providing too limited proof for the desired limited liability
In these times of COVID-19 we see it more and more: parties who sell their goods twice to different buyers, sometimes even before the sellers became actual owners of the goods. This is more common in the commodity trade and especially in the metal trade: at the height of price fluctuations it happens frequently. Unfortunately, in the Netherlands it is not necessarily the case that the owner or the first buyer has the strongest right.
Although a retention of title until payment is effected can offer a solution, this is not always the case under Dutch law. It is, for example, not of aid where the second buyer is a so-called bona fide acquirer who has purchased the goods in good faith.
The question of who is entitled to the goods is not regulated internationally. Each country has its own laws under which that question is to be answered. As a matter of Dutch private international law, this question is answered under the law of the State where the goods are located at the relevant time. Therefore, where the goods are located in the Netherlands, a Dutch court will in principle apply Dutch law to this question.
Dutch law provides that a sale to a bona fide acquirer cannot be challenged on the ground that the seller lacked the power of disposition. In other words, despite the fact that seller did not have the power to dispose of the goods, the bona fide buyer who was unaware of the lack of power will be protected. However, this only applies where the buyer obtained possession of the goods i.e. where the goods were delivered to that buyer in accordance with the law. In such case a second buyer will still obtain ownership.
Under Dutch law, delivery can also take place via a third party, for instance the party where the goods are located. This is based on an agreement, i.e. the agreement that the goods located at the third party will henceforth be held by that third party for the buyer. That agreement is sealed, and delivery is a fact, if the agreement is either communicated to the relevant third party or if that third party acknowledges the agreement. In Dutch law this form of delivery (which stems from Latin law) is called a delivery longa manu (Latin for: the long hand). Traders and warehouse operators who read this might immediately think of the traditional warehouse release: the warehouse holds the goods for party A and will usually only release them to party B by means of a declaration of release, on instruction of party A. One would think that as long as this release is not there, the buyer acting in good faith will not obtain the goods as delivery would not have taken place. In 2017, the Court in preliminary relief proceedings in the District Court of Rotterdam took a different view.
The case was as follows: Party A had sold a consignment of chocolate subject to retention of title to party B. B had left part of the cargo unpaid, but had already sold the entire cargo ex-warehouse Rotterdam to party C. In Rotterdam, notwithstanding A’s retention of title, the cargo was stored for B. B had informed the warehouse that the cargo could only be released to C after C had paid for the cargo. C actually paid, but B did not acknowledge that payment. It would go too far to explain why here, suffice to say here that there was an e-mail exchange between B, C and the warehouse in which B stated that as far as B was concerned, the cargo had not yet been paid for and that for this reason B could not instruct the warehouse to release the goods to C. C in its turn informed the warehouse with a copy to B that C did pay for the cargo and considered itself to be the owner of the cargo. C placed an arrest on the cargo and claimed its release to C in summary proceedings before the Rotterdam Court. The warehouse was also involved in the proceedings and claimed in these proceedings that it kept the cargo for B and would not release the cargo until B would instruct it do so, or at the court’s order.
As indicated above, a delivery longa manu is sealed by a communication from the parties to that effect to the third party holding the goods, who then has to hold it for the new acquirer or by the acknowledgment of the relevant third party of the agreement between parties for the third party to now hold the goods for the new acquirer. The Judge read in B’s instruction to the warehouse to not deliver the cargo to C until the latter had paid together with C’s email to the warehouse that the latter had paid, the notification referred to above. Thus, the Judge found that the goods had been delivered to C longa manu and that C had indeed become a bona fide acquirer who was to be protected against B’s lack of power of disposition. The cargo had to be handed over to C and A was left empty handed, despite of its retention of title.
In the absence of an appeal and substantive proceedings, we will not know whether the judgment of the Court in preliminary relief proceedings would have been upheld on all points. It is clear, however, that the first seller would do well to instruct the warehouse to keep the goods for the duration of the retention of title for the first seller and that one has to be careful with notifying the warehouse of the conditions agreed with a purchaser for the release, if those conditions have not yet been met. Such to prevent that you are left unpaid and without your goods.
We handle (inter alia) items such as the above and can assist if needed.
Caland Advocaten
Cherry Almeida |+31(0)10-217727 | +31(0)624820047 | almeida@caland.nl
(published 15 May 2020)
On 16 October 2019 the Rotterdam Court rendered an interesting judgment on the Dutch General Yardconditions “VNSI” (ECLI:NL:RBROT:2019:8389).
The Owners of a 70 meter long wooden replica of the Ark of Noah contracted with a Dutch shiprepair yard for some repairwork. To the repaircontract the Dutch General Yardconditions “VNSI” applied.
During the execution of the work fire broke out causing severe damage to the vessel, for which the ship owners held the repairyard liable.
Art. 13.2 of the Dutch General Yardconditions “VNSI”read as follows:
The yard shall not be liable for damages, except if and insofar as the yard shall inflict damages intentionally or through gross negligence. However, except in the case of intent on the part of the yard, liability of the yard for loss of profit, consequential or indirect damages is, at all times excluded. In this clause gross negligence or intent of the yard means gross negligence or intent of the yard’s officers and of managing officials identifiable with the yard.
This art 13.2 is clear: in principle the repairyard is not liable unless the damage has been caused intentionally or through gross negligence.
The Owners did not argue that the damage had been caused intentionally, but did argue that the damage had been caused through gross negligence. The court held that the Owners did not succeed in proving the gross negligence (which is indeed often difficult under Dutch law).
Therewith there remained for the Owners to argue that, shortly put, under the principles of reasonableness and fairness the repairyard should not be allowed to rely on the exoneration contained in art. 13.2 of the Dutch General Yardconditions “VNSI”.
There is Dutch case law in which it has been held, shortly put, that a party which is in principle entitled to invoke a (contractual) right, can nonetheless be denied such invocation where, in the given circumstances of the case, such would conflict with the Dutch principles of fairness and reasonableness.
In the subject judgment of NOAH’s ARK, the Rotterdam Court referred to its earlier judgment of 13 December 2006 (ECLI:NL:RBROT:2006:BD6181) in which it had held in a similar case, that invocation by the yard of art. 13.2 (in that case) did not conflict with the principles of fairness and reasonableness.
In that earlier judgment the Rotterdam Court held that invoking art. 13.2 Dutch General Yardconditions “VNSI” was not unreasonably onerous for the Shipowner:
- since both the repairyard and the Owners were professional parties working in the shipping industry in which using general terms and conditions is common practice;
- since the Dutch General Yardconditions “VNSI” are used by many Dutch ship repairyards;
- since the repair contract clearly refers to the Dutch General Yardconditions “VNSI” which had been printed on the reverse side of the contract;
- the Owners could have read the conditions and could have commenced negotiations with the repairyard in an effort to exclude art. 13.2 from applicability;
- since an exclusion / limitation of liability is not unreasonable taking into account the possible liability and the price payable to the yard for the repair work;
- the Owners were insured themselves against the suffered damage.
Since this remaining argument failed also, the Rotterdam Court rejected the Owners claims. This case confirms that in principle Dutch shipyards are able to rely on the Dutch General Yardconditions “VNSI” if applicable.
(Mr Richard van ‘t Zelfde, publication 06.11.2019)
The Dutch courts regularly deal with cases in which shipowners / charterers hold stevedores liable for damage to a vessel.
In some cases, the liability of the stevedore can be based (quite easily) on provisions of the Terminal Service Agreement in place with the stevedore.
In other cases, in particular when having to base the claim on tort (f.i. where the claiming party does not have the contract with the stevedore) the claim can prove more difficult to pursue, one reason being that it is a principal of Dutch law that “careless or otherwise unlawful acts cannot be deduced automatically from the mere fact of damage to property.”
Put more simply: where it is established that the stevedore caused damage to a vessel, the damage itself does not automatically prove that the stevedore has (also) commited a tortious act and therefore does not automatically lead to his liability for the damage.
A claimant will need to state and prove that the stevedore committed a tortious act for the tort claim to be able to succeed.
This was (first) held by the Dutch Supreme Court in its longstanding judgment HR 06.03.1953, NJ 1953/791 NICOLAS PATERAS and has been upheld in much lower case law ever since, also earlier this week by the Rotterdam (Maritime) Court in its judgment of 30.10.2019 (ECLI:NL:RBROT:2019:8469): “Now that Peak Shipping has not disputed that discharge was performed in the usual machinal manner, the crane operator will only be deemed to have acted unlawfully if he has not proceeded with the care that can be reasonably expected of him during machinal unloading.”
Being able to prove that a toritous act has been committed, is a factual question and it might be necessery, for instance, to (preliminary) hear witnesses such as the cranedriver and crewmembers to obtain evidence. Also the instruction of surveyors is often necessary.
In the above recent case, the Rotterdam Court rejected the claims by the vessels’ charterers, shortly put, on the grounds that the charterers had not sufficiently proven their standpoint that the stevedore committed a tortious act.
Mr Richard van ‘t Zelfde (posted on 03.11.2019)