Vol 12 (2015) - Issue 2

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The Dutch Supreme Court Yukos Rulings: From Territoriality to Universality

Introduction: the territoriality principle as a point of departure in Dutch international insolvency case law
The Dutch Bankruptcy Act, which dates from 1893, contains no provisions dealing with the recognition of a foreign bankruptcy. According to the drafters of the act, it was considered undesirable to include rules that would allow for the recognition of bankruptcies from any country in the world. Consequently, the Supreme Court developed the territoriality principle in its case law. This principle entails that a bankruptcy from a country with which the Netherlands has no treaty does not include any assets in the Netherlands and cannot be invoked insofar as this would negatively affect the position of creditors. The EU Insolvency Regulation, which is based on the EU Treaty, is considered a treaty in this sense. However, it is the only such treaty now in force to which the Netherlands is a party.
Both at the end of 2008 and in September 2013 the Dutch Supreme Court gave rulings in the Yukos case. In the 2008 ruling the Supreme Court did not go further than giving an interpretation of the territoriality principle for specific acts of a foreign bankruptcy trustee. However, in a ground-breaking decision issued on 13 September 2013, the Dutch Supreme Court found that a foreign bankruptcy trustee may, in principle, exercise the powers conferred on him or her under the lex concursus (the law governing the bankruptcy) in the Netherlands. Such powers can include the management and disposal of assets located in the Netherlands at the time of the foreign bankruptcy order. Although the Supreme Court still describes its treatment of foreign bankruptcies under Dutch law as governed by the territoriality principle, the rules it adopted bear a closer resemblance to those based on the universality principle: a foreign bankruptcy trustee can exercise all powers in the Netherlands without the requirement of a recognition procedure. Both the 2008 and 2013 Yukos rulings will be discussed in this article.

Facts of the Yukos case
In August 2006 Yukos Oil was declared bankrupt by the Arbitrazh Court of Moscow. Many proceedings arising from this bankruptcy took place in the Netherlands, as most of Yukos Oil's non-Russian assets were part of a structure headed by Dutch company Yukos Finance (a 100 percent daughter company of Yukos Oil). In August 2006, Rebgun, who was Yukos Oil's Russian bankruptcy trustee, exercised the voting rights on the Yukos Finance shares to dismiss Yukos Finance's managers, Godfrey and Misamore. Subsequently, Yukos Finance and Godfrey and Misamore initiated both summary proceedings as well as regular proceedings against Rebgun, challenging Rebgun's authority to exercise voting rights on the Yukos Finance shares. In August 2007, Rebgun sold Yukos Finance's shares to Promneftstroy (which was a subsidiary company of Russia's state oil company Rosneft). In September 2007, the shares were transferred to Promneftstroy. The authority of Rebgun to sell and transfer the Yukos Finance shares also became subject of the already pending regular proceeding.