NON-POSSESSORY PLEDGE UNDER THE LAWS OF ARUBA

A non-possessory pledge requires a deed

Security rights are an important issue, especially in financing transactions. A company may, for example, guarantee the obligations of another company under a certain loan facility. There are several alternatives, one of which will be discussed here.

Under the laws of Aruba there are several kinds of pledges, in particular, the possessory and the non-possessory pledge. In the case of a possessory pledge, the physical control of the assets concerned will be transferred from the owner/borrower to the bank/lender.

In the case of a non-possessory pledge, regarding for example registered shares, the pledge is …
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17
Aug 2010
CATEGORY

Legal

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PREMATURE TERMINATION OF A FIXED TERM EMPLOYMENT CONTRACT

Take care!

If parties have agreed upon a fixed term employment contract and the employee wishes to resign before the term of the contract has expired, may the employee terminate his employment contract prematurely? Article 7A:1615e, paragraph 3 Civil Code of the Netherlands Antilles stipulates that an employment contract for a fixed term may only be terminated if this right to premature termination for both parties is agreed in writing. In other words the right to premature termination must be agreed in writing and must be applicable to both parties. 

If premature termination has not been agreed in writing then …
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29
Jun 2010
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Legal

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PREJUDICED INTERESTS OF MINORITY SHAREHOLDERS IN THE NETHERLANDS ANTILLES

They may force the company to take-over their shares

Article 2:251(1) of the Netherlands Antilles Civil Code reads as follows: “A shareholder of registered shares, whose rights or interests are prejudiced to such an extent, by the conduct of the company or one or more co-shareholders, that a continuation of his shareholding cannot reasonably be required of him, may institute a claim against the company for withdrawal, demanding that his shares be acquired against payment in cash”.

This provision may only be successfully triggered in exceptional circumstances. This could be the case if the company or co-shareholders have a structural policy …
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13
Mar 2010
CATEGORY

Corporate

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FOREIGN CLAIMS SECURED BY ARUBAN SECURITY RIGHTS

The foreign law governed claim must be sufficiently identifiable

Many financing arrangements are of a cross-border nature. For instance, a loan agreement governed by English law with the loan secured by a right of pledge governed by the laws of Aruba. This raises all kinds of questions.

Any foreign right, for instance a claim, in which an Aruban pledge is created, must be sufficiently identifiable (‘met voldoende bepaaldheid omschreven’) within in the meaning of section 3:84(2) of the Civil Code of Aruba.

Also, if one wishes to create a right of pledge in a foreign right, such a right must …
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23
Jan 2010
CATEGORY

Legal

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NETHERLANDS CARIBBEAN BANK N.V. IN LIQUIDATION

Notice of Filing Final Account

Notice is hereby given that, pursuant to Section 31, paragraph 7, of the Netherlands Antilles Civil Code, on the 1st of December 2009, the liquidator’s final account has been lodged for inspection at the office of the company (Kaya W.F.G. (Jombi) Mensing 14, Curacao), at the office of the liquidator and at the commercial register of the Curacao Chamber of Commerce (Kaya Junior Salas 1, Curacao).

Karel Frielink (liquidator)

(1 December 2009)

See also De Volkskrant

.

01
Dec 2009
CATEGORY

Corporate

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BREACH OF CONTRACT IN THE DUTCH ANTILLES (V)

Restrictions on termination

With regards to damages, the aim thereof is generally to restore the creditor to the position he would have been in had the contract been fulfilled. In case of breach of contract, the damages will usually be assessed by considering the situation the creditor would be in if restored to the position he would have been in had the contract been performed properly, by looking at costs incurred, wasted expenditure, any loss of profits etc.

The Netherlands Antilles Civil Code will generally allow an injured party to claim damages based on the expectations/positive interest, i.e. the position …
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24
Oct 2009
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Legal

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BREACH OF CONTRACT IN THE DUTCH ANTILLES (IV)

Non-performance as a response to non-performance

Whenever a party to a contract is faced with non–performance by the other party, the party’s first reaction might well be to suspend its part of the contract. In the legal sense of the word, suspending or withholding performance may be described as both a defense and a self help remedy, which a party can use when the other party does not perform its obligations under the contract. By its very nature it is a temporary remedy. As long as one party is in breach and the other is withholding its performance, the contract …
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17
Oct 2009
CATEGORY

Legal

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BREACH OF CONTRACT IN THE DUTCH ANTILLES (III)

Different cases of breach of contract

Any question of breach starts with an inquiry into the type of obligation at hand. It is necessary to know more about the type of obligation at hand in order to determine whether a party has failed to perform that obligation. When determining whether a party has failed to perform, it should be remembered that an obligation may carry with it a degree of ‘strictness’, ranging from a firm commitment, e.g. commitment to provide annual audited financial statements, to an obligation to use reasonable care and skill to achieve certain goals.

The Netherlands Antilles …
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10
Oct 2009
CATEGORY

Legal

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BREACH OF CONTRACT IN THE DUTCH ANTILLES (II)

Entitlement to specific performance

Under the Netherlands Antilles Civil Code the demand for specific performance is not a remedy for breach of contract in a strictly legal technical sense. In this system the entitlement to specific performance is a consequence of the duty to perform a (contractual) obligation. The contract itself, and not the breach of it, entitles the creditor to specific performance. If non–performance amounts to a breach of contract, i.e. meaning that a party does not perform though it should perform, the other party may be entitled to damages or termination of the contract.

However, in some cases, …
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03
Oct 2009
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Legal

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BREACH OF CONTRACT IN THE DUTCH ANTILLES (I)

Failure to properly perform

Under the Netherlands Antilles Civil Code (CC) breach of contract is defined as a failure to properly perform, perform on time, or to perform at all, which failure is attributable to one of the parties If a debtor breaches his obligations there are various courses of action available to the creditor. Firstly he may claim specific performance, secondly he may claim damages, whether or not in addition to specific performance, and thirdly, he may demand dissolution of the contract, with or without damages.

The CC distinguishes between excused and non–excused non–performance. According to Article 6:74 CC …
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26
Sep 2009
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Legal

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THE MANAGEMENT OF A DUTCH ANTILLES FOUNDATION

Management must act in the best interests of the foundation

The members of the management board of a Netherlands Antilles foundation have collective powers and responsibilities. The management board shall be in charge of the management of the foundation.

Although not explicitly provided for in Book 2 of the Netherlands Antilles Civil Code, it is considered a general rule of corporate law that the management board must act in the best interests of the foundation in the performance of its duties, even when acting upon instructions from others (e.g. a supervisory or advisory body).

The minimum standard of care is …
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19
Sep 2009
CATEGORY

Corporate

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BEARER SHARES IN A NETHERLANDS CARIBBEAN COMPANY

Registered shares must be issued first

On 1 March 2004, the new Netherlands Antilles act on corporate law (Book 2 Civil Code) became effective. Since that date it is no longer possible to (directly) issue bearer shares.

A company with only bearer shares has no shareholders’ register. Only a public limited liability company (NV) may issue bearer shares, provided that registered shares be issued first and that they have been fully paid up. These may subsequently be converted into bearer shares. The issuance (of registered shares) requires a ‘deed of issuance’, which must be signed by both the company and …
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05
Sep 2009
CATEGORY

Corporate

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