Promontoria, the story continues: transfer of a claim by a bank to a non-bank. Is the non-bank subject to the bank’s duty of care?

Introduction

The Supreme Court of the Netherlands (Hoge Raad) provided further clarity in respect of the transfer (overdracht) of a claim, also known as an assignment (cessie) (in which regard we refer to our previous publication), in two recent rulings: ECLI:NL:HR:2020:1276 and ECLI:NL:HR:2020:1274. Both cases relate to the transfer of a claim of a bank (F. van Lanschot Bankiers N.V.) against a client under a loan agreement to a non-bank (Promontoria, a subsidiary of Cerberus Capital Management). In both cases multiple preliminary questions were referred to the Supreme Court of the Netherlands. Especially for parties who are involved in trading claims, including claims from banks against that bank’s clients (as was the case in the two cases that lead to the preliminary rulings mentioned above: ECLI:NL:RBAMS:2019:5729 and ECLI:NL:RBAMS:2019:6359), the Supreme Court of the Netherlands’ rulings are particularly relevant. The Supreme Court of the Netherlands answered the question whether a claim from a bank on its client is, by its nature, non-transferable within the meaning of section 3:83 paragraph 1 of the Dutch Civil Code. In addition, in the event that the answer to the aforementioned question is not affirmative as a result of which such a claim is transferable, the Supreme Court of the Netherlands answered the question whether the non-bank (to which the claim is transferred) is subject to a duty of care, and, if so, what the impact is of the public law that applies to banks (for example, the Dutch Financial Supervision Act) and of the (special) duty of care that a bank should take into account on the non-bank’s duty of care.

Transferability

As to the first question, the Supreme Court of the Netherlands stated that the nature of a claim from a bank on its client under a loan agreement does not result in such a claim being non-transferable to a non-bank. One of the reasons is that the obligations of the client, consisting of the obligation to repay the loan and to pay interest, do not alter as a result of the transfer. Another reason is that a loan agreement does not include obligations for the lending party that can only be performed by a bank, and not also by a non-bank. The fact that a non-bank may make use of its rights under the loan agreement in a different manner than a bank would do, does not result in claims under that loan agreement being non-transferable (contrary to the principle that under Dutch law a claim is transferable, unless…).

Implications of the transfer

The Supreme Court of the Netherlands further stated that if a claim against a client from a bank is transferred to a non-bank, this does not result in the non-bank being subject to the same duty of care that applies to the bank vis-à-vis the client. In this regard, the duty of care pursuant to the General Banking Conditions (Algemene Bankvoorwaarden), the special duty of care that applies to banks as a result of their specific position and function within society (which special duty of care may result in investigation obligations, advisory obligation, information obligations and obligations to warn its clients, which will, in each case, depend on the circumstances of the specific case), and, to the extent applicable, the rules of conduct that apply to banks and that are laid down in the Dutch Financial Supervision Act (Wet op het financieel toezicht). However, if the (special) duty of care has an impact on the rights and obligations in respect of the claim itself, the claim can only be transferred taking into account the aforementioned impact on the rights and obligations in respect of the claim. In addition, the client can invoke the same defenses against the non-bank as it would be able to invoke against the bank. Lastly, it is pointed out that the client and the non-bank, as a result of the transfer, entered into a legal relationship that is governed by the principle of reasonableness and fairness (redelijkheid en billijkheid). What the exact impact is of this principle in any given situation, depends on the circumstances of the specific case, including the fact that the claim was transferred by a bank to a non-bank. This may result in the non-bank being subject to its own duty of care, which could imply that the non-bank in certain cases is obliged to act in the same manner as a bank.

Conclusions

It is now clear that a claim of a bank under a loan agreement can be transferred to a non-bank. The fact that it concerns a claim of a bank against its client does not result in such a claim being non-transferable. It is also clear that the (special) duty of care that applies to the bank does not transfer to the non-bank as well. The non-bank will therefore not be subject to the same (special) duty of care as a bank. As a result, the client cannot invoke any rights it may have as a result of that (special) duty of care. The client can, however, invoke the rights and obligations in respect of the claim itself, on which the (special) duty of care that applies to a bank may have an impact. For example, if the (special) duty of care implies that the bank can only revise the applicable interest rate up to a certain maximum, the non-bank is equally bound by that limitation. The client can also invoke the same defenses against the non-bank as it would be able to invoke against the bank. Lastly, based on the principle of reasonableness and fairness (redelijkheid en billijkheid), the non-bank may be subject to its own duty of care. For parties that wish to acquire claims from a party that qualifies as a bank, the above is particularly relevant. Please feel free to contact Lucas Lustermans (l.lustermans@ploum.nl or +31619850096) or Joost Kool (j.kool@ploum.nl of +31610177339) if you want more information.