International Law

TRANSFERS FOR NO CONSIDERATION UNDER THE LAWS OF THE DUTCH CARIBBEAN

By Karel.Frielink

The law protects creditors

In general the law in the Netherlands Antilles does not prohibit transfers for no consideration. It should however be pointed out that under Netherlands Antilles law, statutory provisions exist which ensure that transactions whose only reason is to disadvantage creditors or make it impossible for them to seek recourse, may not be performed out. For example, Section 3:45, paragraph 1, of the Civil Code states that if, in the performance of a legal act to which he is not obligated, an obligor, knew or ought to have known that this would adversely affect the possibility of recourse of one or more of his creditors, then the legal act may be annulled; any creditor whose possibility of recourse has been adversely affected by such a legal act may invoke this ground for annulment, irrespective of whether his claim arose before or after the act.

Section 3:46 of the Civil Act states several (aside: refutable) presumptions of law in which one is considered to have known or ought to have known that such prejudice would be the result of the legal act.

Furthermore, as in many other jurisdictions, transactions intended to escape past or present obligations could possibly constitute one or more tortious acts. Supreme Court case law shows, for instance, that transferring money or assets from one (group) company to another, leaving the creditors of the first company unpaid, is a tortious act. The Supreme Court ruled that the lawfulness and acceptability of a so-called split-up of the company into viable and non-viable units depends on whether the group?s most important creditors have been consulted and have consented. If the split-up took place without consultation and consent, it constitutes a tort (NJ 2002, 94).

Karel Frielink
Attorney (Lawyer) / Partner

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Full post as published by Karel's Legal Blog on January 30, 2009 (boomark / email).