As the defending party you have to put up a defense (Statement of Defense) and in this regard this statement should not only be clear and complete but you should also know for instance what formal defenses you should advance. With regard to the latter for instance the plea of limitation of action comes to mind. In many cases the period of limitation of action (verjaring) is five years but sometimes it is a much shorter period. The short period of limitation of six months applies to the annulment of a resolution of a legal entity registered in Curacao (vervaltermijn).

Say that the plaintiff is established abroad, under certain circumstances you can ask the court to let that plaintiff furnish security for the court fees. A defendant must also consider whether or not to bring a counterclaim (eis in reconventie). Both parties must think about the question of whether (and if so which) witnesses ought to be examined or whether an expert might have to be engaged.

Say you are the defendant but for any reason whatsoever you did not enter an appearance and did not put up a defense. You then failed to appear. In that case a default judgment (verstekvonnis) will be pronounced and in most cases the claim of the plaintiff will be awarded. When the default judgment is served on you, for instance because the bailiff has served it on you, you have two weeks to lodge an objection (verzet). This notice of objection is not lodged with the Joint Court of Appeal (Gemeenschappelijk Hof van Justitie) but with the Court of First Instance that pronounced the judgment. (To be continued)

Karel Frielink
Attorney (Lawyer) / Partner

(17 May 2013)

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It often happens that for instance the court in Curacao has jurisdiction to hear a case but the claim is governed by the law of another country. In that case the court must be informed of the contents of that foreign law by the parties. Obviously, before you institute these proceedings you must have examined whether your claim has any chance of success. And you have to consider the question of what you will do if the claim is awarded by the court in Curacao but you have to go abroad for enforcement of that judgment. Sometimes you can then use an international enforcement convention (treaty) but sometimes you have to conduct the case again abroad (in an abbreviated form).

Once you have found the right court, it is important that the claim is lodged in the proper manner. There are a lot of rules in that area as well. It is not only important that the names of the parties are correct, but also for instance that the claim and the grounds on which it is based are clearly described and that it is indicated what evidence is present but also that there is a clear formulation of what exactly is being asked of the court. The question should also be considered of whether for instance the imposition of a penalty can and should be demanded.

It is usually also important that the plaintiff asks the court to declare its judgment provisionally enforceable (uitvoerbaar bij voorraad). This means that if the claim of the plaintiff is awarded but the defendant appeals from it, the plaintiff nevertheless can enforce the judgment. If the plaintiff forgets to demand this from the court, that appeal will have a suspensory effect. And as the plaintiff you should not forget to demand that the court orders the defendant to pay the court costs. Incidentally this does not cover all the court costs of the plaintiff and in addition, the court will in principle only allow such a claim if it also awards the principal claim. (To be continued)

Karel Frielink
Attorney (Lawyer) / Partner

(10 May 2013)

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From May 5th till May 8th 2013 the trade mission “Europe meets the Americas” was held on Aruba. The conference offered the unique opportunity to connect face-to-face with potential partners from Latin America, the Caribbean region, Europe all present in one place. The three-day program provided valuable information on both the opportunities as well as cultural practices within the different continents and regions, presented by prominent international speakers. Spigt Dutch Caribbean was one of the sponsors of this conference.

The specific focus areas for the Europe Meets the Americas Business Conference were:

• Sustainability, specifically the areas of infrastructure, food, clean energy, and construction;
• Logistics, in particular regional and natural distribution centers for retailers, green products, etc. should be pursued to serve the Caribbean and Latin markets, and
• Business and Professional Services Industry, for example legal and tax support, back-office support operations (niche markets) including customer support and telemarketing call centers, accounting and payroll services, processing facilities, administrative support, and headquarters.

Attorney Davina Mansur of Spigt Dutch Caribbean was one of the speakers on the 8th of May 2013. Davina highlighted some practical legal items and showed why Aruba is a better choice than many other islands in the Caribbean from a legal perspective (click here for the full text of the speech and click here for the power point presentation).

Karel Frielink
Attorney (Lawyer) / Partner

(8 May 2013)

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In order to answer the question of which court you should bring your action before, the type of claim can also be important. In Curacao you must bring your claim for collection of a sum of money or a dispute involving a take-over contract before the Court of First Instance. But if you start inquiry proceedings you should go to the Joint Court of Appeal. And if as a civilian you want inquiry proceedings to be brought against a State-owned company, the petition to this end must be submitted to the Public Prosecutions Department (Openbaar Ministerie). The Public Prosecutions Department then has to investigate whether there are sufficient reasons to submit a petition for inquiry proceedings to the court of Appeal.

Obviously there can be multiple counterparties who live in or are registered in different countries. Which court must you go to then? Sometimes there are cases whereby the law provides that you must include all the respective parties in the suit because the issue at hand involves them all and the dispute cannot be dealt with in separate parts. For instance a claim for annulment of a legal act must be brought against all the parties to that legal act. The claim for dissolution of a lease whereby multiple tenants are involved also comes to mind.

As the plaintiff you should know who your counterparty is. If a claim relates to a contractual joint venture such as a limited partnership, who must be sued: the limited partnership, the managing partner and/or the limited partners? And if the shareholders’ meeting of a public or a private limited company passes a resolution which a shareholder opposes, does he bring his claim against those other shareholders and/or against the company? And against whom will he bring his claim if there are important grounds for him to want his shares to be taken over or to want to take-over the shares of the other shareholders? (To be continued)

Karel Frielink
Attorney (Lawyer) / Partner

(3 May 2013)

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Litigation appears to be simple. For instance you have a monetary claim on someone (a private person or an enterprise) and you ask the court to determine in a judgment that you indeed have this claim. And you ask the court that the counterparty be ordered to pay the claim. And once you have this judgment, you can enforce it with the assistance of a bailiff (deurwaarder). This means for instance seizing a trade stock and selling it publicly in an auction. Simple, yes? Why then is litigation a discipline for which you should preferably engage a professional? On the basis of the Curacao civil law of procedure I will discuss briefly several subjects demonstrating the problems you might be faced with.

Firstly the law of procedure has a formal nature. There are all kinds of rules for instigating and thereafter conducting a lawsuit. For instance you must make sure that the court fee is paid within due time and that you have brought the case before the right court. You can determine which court has jurisdiction on the basis of the rules of civil procedural law. This can be a court in your own country but it could also be a court in a foreign country. In many cases it has been determined contractually which court has been declared by the parties to have jurisdiction (forum agreed upon). If you bring a case before the wrong court, the court will declare that it lacks jurisdiction (onbevoegdverklaring).

But it can also be the case that an arbitration clause is included in a contract. In that case you should not go to the civil court but institute arbitration proceedings. Different rules will apply to this. These can be rules in the contract, rules in your own country but also rules of the International Chamber of Commerce or of another institution.

In this connection I will also mention the Code of Canon Law (Wetboek van Canoniek Recht) providing for ecclesiastical procedures, where the ecclesiastical court has exclusive jurisdiction to settle for instance affairs with regard to spiritual issues. If pursuant to the Code of Canon Law an (internal) appeal procedure is possible, this must have been followed before the civil court can be involved. It will also depend on the nature of the claim whether the civil court declares that it has or lacks jurisdiction. (To be continued)

Karel Frielink
Attorney (Lawyer) / Partner

(26 April 2013)

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The post LITIGATION IS A SKILLED PROFESSION (part 1) appeared first on Karel's Legal Blog.

Getting the Deal Through has published the fully revised and updated sixth edition of Banking Regulation, a volume in its series of annual reports, which provide international analysis in key areas of law and policy for corporate counsel, cross-border legal practitioners and business people.

Karel Frielink, Maike Bergervoet and Davina Mansur of Spigt Dutch Caribbean contributed to this years edition of “Banking Regulation in 28 jurisdictions worldwide” (2013). Click here for the Curaçao Chapter.*

Karel Frielink
Attorney (Lawyer) / Partner

(24 April 2013)

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*Reproduced with permission from Law Business Research Ltd. This article was first published in Getting the Deal Through – Banking Regulation 2013, (published in April 2013; contributing editor: David E Shapiro of Wachtell, Lipton, Rosen & Katz). For further information please visit Getting The Deal Through.

The post BANKING REGULATION IN CURACAO appeared first on Karel's Legal Blog.

Spigt Dutch Caribbean contributed to this years edition of the PLC Practical Law Multi-Jurisdictional Guide on Corporate Governance. Click here for the Curaçao Chapter ‘Government-owned companies: ensuring good corporate governance in Curaçao‘ and visit PLC Practical Law for the full guide.

The lawyers and tax advisers of Spigt Dutch Caribbean specialize in corporate law (including commercial law), financial law, tax law and dispute resolution. They advise, litigate and facilitate transactions.

The firm’s clients are local and international corporations, entrepreneurs, financial institutions, investment funds, trust companies, investors and high net worth individuals.

Since 2001, the firm has been active throughout the Dutch Caribbean: Aruba, Bonaire, Curaçao, St. Maarten, St. Eustatius and Saba, and is considered a Leader in Litigation.

This corporate heavyweight is highly valued for its full-service capabilities, which includes the expertise of a number of specialized tax advisers, and a litigation department commended for its assertive style. The firm is also known for its international outlook. The team has advised companies from across the globe on investments in the Dutch Caribbean hospitality industry. Other work highlights include a number of tax disputes, several inquiry proceedings, as well as high-profile advisory work for prominent financial institutions.

Karel Frielink
Attorney (Lawyer) / Partner

(19 April 2013)

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So far we have only looked at legal entities not under the supervision of the Central Bank of Curacao and St. Maarten (CBCS). Just a few words about institutions that are under supervision.

The following applies to banks with a registered seat in Curacao for instance. These entities have a license from the CBCS pursuant to the Ordinance on the Supervision of Bank and Credit Institutions 1994 (Landsverordening toezicht bank- en kredietwezen 1994: ‘Ltbk’). The prior consent of the Central Bank is required for each amendment to the articles of association (Article 23 paragraph 1 Ltbk). That also applies to any corporate re-organization, although it is not sufficiently clear what exactly should be meant by this.

Moreover a transfer of seat or cross-border conversion would most probably qualify as a winding up of the activities in Curacao which should be reported to the Central Bank and must be carried out under the supervision and directions of the Central Bank (Article 26 Ltbk).

Curacao banks are therefore by definition unable to effect a cross-border merger or conversion (outbound) without the consent of the CBCS. If a foreign bank wants to be converted into a Curacao company (inbound) this will only be possible after a license has been received from the CBCS (Article 2 paragraph 1 Ltbk).

If a foreign bank as a disappearing company wants to merge with a bank registered in Curacao this also requires the consent of the CBCS. For, pursuant to Article 23 paragraph 1 under d Ltbk it is not allowed to enter into a merger with another institution or enterprise without the prior consent of the CBCS. The CBCS can attach conditions to that consent.

Karel Frielink
Attorney (Lawyer) / Partner

(12 April 2013)

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The post CROSS BORDER CONVERSION AND MERGER (part 10) appeared first on Karel's Legal Blog.

We now look at the cross-border legal merger. Before 1 January 2012 the possibility already existed in Curacao that in connection with a merger, a foreign legal entity as the disappearing legal entity could merge with a comparable legal form of Book 2 of the Civil Code on the condition that the law governing that foreign legal entity was not incompatible with the merger and the manner in which it was brought about (Section 2:323a of the Civil Code). This inbound merger possibility still exists.

Since 1 January 2012 it is also possible that a legal entity within the sense of Book 2 of the Civil Code (a Curacao legal entity) as the disappearing legal entity can merge with an acquiring legal entity under foreign law (Section 2:323b of the Civil Code). This is the so-called outbound merger. A condition in this case is also that the law governing that foreign legal entity is not incompatible with the merger and the manner in which it is brought about.

With regard to the acquiring (foreign) legal entity the rules of the foreign law applicable to that legal entity and applicable to such a merger are taken into account as much as possible. Sections 2:310 up to and including 2:334 of the Civil Code are applicable but exclusively with regard to the disappearing legal entity. This means for instance that the objection provisions of Section 2:316 of the Civil Code are applicable.

The Dutch arrangement whereby a minority shareholder casting his vote against the merger can request the court to award him compensation is not included in Book 2 of the Civil Code. For that matter it is imaginable that a shareholder who suffers a loss as a consequence of the merger, can under certain circumstances claim compensation for it. However, a claim in that sense must be judged under the ordinary rules of the law of property as they are colored by the law on legal persons, according to the Explanatory Memorandum.

At the moment the Netherlands only has provisions for a cross-border merger of companies with share capital within the European Union or the European Economic Area (Sections 2:333b up to and including 2:333l of the Dutch Civil Code). As indicated above this means that a Curacao NV or BV cannot merge with a Dutch company with shares. And although within a constitutional sense Bonaire belongs to the Netherlands, an NV or BV with its registered seat in Bonaire cannot merge with a Dutch company with shares either. The reverse is also impossible.

As I mentioned earlier it is indeed possible for a company registered in Bonaire or Curacao to be converted for instance into a Luxembourg company, which then incorporates a subsidiary in the Netherlands, after which the parent and subsidiary merge downstream, with a Dutch company as the result. In my opinion it is defensible that a cross-border merger is possible between a company registered in Curacao as the disappearing company and a company registered in Bonaire as the acquiring company. The reverse is also possible because Bonaire only has the inbound merger.

In the Netherlands a draft bill has been ready since the beginning of 2012 for a legislative proposal for cross-border conversion of companies with share capital. This bill has been drafted by the Dutch Corporate Law Committee.

The European Court of Justice ruled in 2008 (16 December 2008, C-210/06, NJ 2009, 202, Cartesio) that a cross-border transfer of seat – and thereby conversion into a legal entity according to the law of another member State – should be able to take place within the European Union on the condition that the member State of immigration is open to this and unless overriding reasons of public interest preclude this. This Dutch legislative proposal is a response to this ruling and is aimed at an adjustment to Book 2 of the Dutch Civil Code. All provisions with regard to conversion are collected in a new Title 7A.

The legislative proposal provides arrangements for:

• the situation in which a Dutch NV or BV is converted into a company with shares according to the law of a different member State of the EU or EEA or is converted into an NV or BV according to the law of the Bonaire, St. Eustatius or Saba public bodies (Sections 2:334oo under a, 334pp-334ww and 334yy of the Dutch Civil Code); and
• the situation in which a company with shares from a different member State of the EU or EEA or an NV or BV according to the law of the Bonaire, St. Eustatius or Saba public bodies is converted into a Dutch NV or BV (Sections 2:334oo under b, 334xx-334yy of the Dutch Civil Code).

The proposed arrangement relates exclusively to companies with shares (in the Netherlands: the NV or BV). Outside the European territory the possibility of conversion – in both directions – is only intended for companies with shares in the BES Islands. It is recommended that the bill is adjusted such that conversion also becomes possible in relation to Aruba, Curacao and St. Maarten. But this would require an adjustment to the Charter!

In this connection I would also like to point out that the cross-border conversion from an NV or BV will have no legal effect if the Dutch Minister of Safety and Justice objects to it for reasons of public interest by filing a statement to this end with the office of the Trade Register, within two months after the announcement of filing the proposal. The company can appeal to the Dutch Trade and Industry Appeals Tribunal against this objection. (To be continued)

Karel Frielink
Attorney (Lawyer) / Partner

(5 April 2013)

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