The ‘Promontoria issue’ continued: on the (non)transferability of bank receivables
29 January 2025 - Eveline Kruisifikx
On 10 July 2020, the Dutch Supreme Court delivered two important judgments on the transfer of receivables by banks to non-banks. In these judgments, the Supreme Court answered the preliminary questions of the Amsterdam District Court following the assignment of receivables against borrowers by the Dutch bank Van Lanschot to non-bank Promontoria. The judgement (in Dutch) of the Supreme Court which has now received a follow-up can be found here.
Answer to preliminary questions
Section 3:83(1) of the Dutch Civil Code (DCC) states that receivables are transferable, unless the law or the nature of the receivable precludes a transfer. In the proceedings in question, the borrower took, among others, the position that the nature of a bank receivable precludes its transfer by the bank to a non-bank and disputed that a legally valid assignment to Promontoria had taken place.
In brief, the Supreme Court first ruled that the nature of a bank receivable arising from a financing agreement does not preclude that receivable from being assigned to a non-bank. The Supreme Court then addressed the question whether with that assignment, the duty of care (zorgplicht) of the bank also passes to the non-bank. Although the Supreme Court ruled that this is not the case, the legal relationship between the new creditor and the borrower will be governed by the general Dutch law rules of reasonableness and fairness (redelijkheid en billijkheid) (Section 6:2 DCC). In determining what such rules require from the non-bank in a particular case, all circumstances must be taken into account, including the fact that the receivable originates from a bank that is subject to a (special) duty of care. The non-bank may be required to base its conduct partly on the legitimate interests of the borrower. This may imply that the non-bank has its own duty of care, which in a particular case may mean that it must behave towards the borrower in the same way as may be expected of a bank acting reasonably.
Judgment of the Amsterdam District Court
On the basis of the aforementioned preliminary ruling by the Supreme Court, the Amsterdam District Court ruled in a final judgment dated 17 February 2021 that the receivables in question had been validly assigned by Van Lanschot to Promontoria. Earlier, the court had already determined that as a rule, a banking relationship cannot qualify as a highly personal relationship that could lead to non-transferability pursuant to Section 3:83(1) DCC.
Amsterdam Court of Appeal judgment
The borrower appealed against the district court judgment to the Amsterdam Court of Appeal, arguing that the nature of the receivable in question precluded a transfer to Promontoria. This time, therefore, no longer because of the fact that the assignee was a non-bank, but because – according to the borrower – the highly personal, multigenerational duration relationship still precluded transferability under Section 3:83(1) DCC.
To substantiate its claim, the borrower stated, among other things, that when the relationship between Van Lanschot and the related family was established, the parties intended to enter into a long-term relationship, that Van Lanschot would provide all kinds of other services to the family in addition to providing the loans, that the family's contact person at Van Lanschot would always be a senior private banker or a member of the board of directors of the private banking department, and that Van Lanschot would play a prominent role in the succession of the family's then minor children.
In its judgment of 14 January 2025, the Amsterdam Court of Appeal addressed the borrower's grievances. The court of appeal considered that a receivable can be so highly personalised with the person of the creditor that the claim, by its nature, is not transferable. Unlike the Amsterdam District Court, the court of appeal determined that it cannot be ruled out that even a bank receivable is not transferable for this reason. However, according to the court of appeal, this should not be assumed easily, as the person of the creditor to whom the debtor has to make payments is, in principle, irrelevant to the substance of the receivable.
The borrower’s arguments in this respect were unsatisfactory. The highly personal relationship had not been sufficiently stated and proven by the borrower, so that, according to the court of appeal, the non-transferability pursuant to Section 3:83(1) DCC could not be assumed. Similarly, a tacit stipulation with Van Lanschot to the effect that the loans were not transferable (Section 3:83(2) DCC) could not be assumed, apart from the fact that such a stipulation would have no effect under property law (goederenrechtelijke werking).
In conclusion: although the banking aspect of a receivable does not imply non-transferability, in specific circumstances the highly personal nature of a receivable may preclude transferability. Although bank receivables are not ruled out in this respect by the court of appeal, a highly personal relationship is not easily assumed. A borrower must present sufficiently substantiated arguments, thoroughly and properly supported with evidence.
For more information, please feel free to contact the Banking & Finance team.
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