REAL AND PERSONAL SECURITY J H M. van Erp and L P w. van Vliet IIA 3 Introduction In this report' we will present, given the space available, a brief overview of Dutch law in regard to real and personal security. First we will discuss the law of rea security followed by a discussion of the law of personal security. We will focus on questions as to which practical and/or theoretical uncerta int ies exist. Although a major part of the books on patrimonial law of the Dutch Civil Code entered into force 10 years ago, already case a w is developing in areas where the codified rules proved to be unclear or imprecise and where legal practice needed solutions which were not laid down in the Civil Code. a general provision which immedately gave rise to considerable uncerta inty in legal practice is the rule in art. 3: 843)CC: the so-called fiduca ban, a ban on fiducia cum creditor: 'A juridical act which is intended to transfer property for purposes of security or which does not have the purpose of bringing the property into the patrimony of the acquirer, after transfer, does not constitute valid title for transfer of that property,3 Transfer of ownership for security purposes is, therefore, not allowed. The Dutch legisla tor already a ccepted that this provision should not be applied in the case of foreign trusts which have to be recognised under the Hague Trust Convention+and in the case of so-called repo-transactions'between large financial institut ions. 5 Furthermore, the fiducia bar will not be adopted in the new Netherlands Antilles and Aruba Civil Code, which is J H M. van Erp is professor of civil law and European private law, Maastricht Univers ity, the Netherlands L P W. van Vlietis lecturer in private law, Maastricht University, the Netherlands I. We will use the following abbreviations: Fw. (Faillissements wet; Insolvency Act), HR(Hoge Raad; Netherlands Supreme Court, NJ(Nederlandse Jursprudente; law reports), Rvdw ( Rechtspraak van de Week, law reports), Stb.( Staatsblad; Bulletin of Acts and Orders), Trb (Tractatenbad; Bulletin of Treates ) WPNR(Weekblad voor Privaatrecht, Notariaat en Registrate). Recentlegislativematerialcanbefoundonthefollowingwebsitehttpwwwoverhed.nvop/and recentcase-lawonhttp://www.rechtspraaknl eading manuals are: F HJ. Minssen and P. de haan, Asser's Handleiding tot de beoefening van het Nederlands burgerlijk recht vol 3 1, Goederenrecht, Algemeen gpederenrecht 14th ed, Kluwer, Zwolle 2001 F H.J. Mijnssen and AA van Velten, Asser's Handleiding tot de beoefenng an het Nederlands burgerlijk recht, voL. 3 IlL, Zakenrecht, Zekerheidsrechten, 12th ed, Kluwer, Zwolle 1994; W.H.M Reehus et al, Goederenrecht, ll th ed, Kluwer, Deventer 2001; H.J. Snijders and E B. Rank-Berenschot, Goederenrecht, 3rded., Kluwer, Deventer 2001 The Engl sh translation of Civil Code provisons is based upon PP C Haanappel/E Mackaay Nieuw Nederlandse Burgerlijk Wetbock, Het Vermogens recht, Kluwer Law and Taxation Publishers, Deventer/Bos ton 1990, and upon P. Haanappel/E Mackaay/H Warendorf/R. Thomas, Netherlands Business Legslation, Kluwer Law Intemational, The Hague/London/Boston(boose leaf dition) Trb. 1985, 141 and Trb. 1996,9, see art 4 of the Act implementing ths convention, the Wet conflictenrecht trusts, Stb. 1995, 508. See art. 5 Wet vervangingreferentierentes, Stb. 1998, 716REAL AND PERSONAL SECURITY J.H.M. van Erp* and L.P.W. van Vliet** II A 3 1 Introduction In this report1 we will present, given the space available, a brief overview of Dutch law in regard to real and personal security. First we will discuss the law of real security,2 followed by a discussion of the law of personal security. We will focus on questions as to which practical and/or theoretical uncertainties exist. Although a major part of the books on patrimonial law of the Dutch Civil Code entered into force 10 years ago, already case law is developing in areas where the codified rules proved to be unclear or imprecise and where legal practice needed solutions which were not laid down in the Civil Code. A general provision which immediately gave rise to considerable uncertainty in legal practice is the rule in art. 3:84(3) C.C.: the so-called ‘fiducia ban’, a ban on fiducia cum creditore: ‘A juridical act which is intended to transfer property for purposes of security or which does not have the purpose of bringing the property into the patrimony of the acquirer, after transfer, does not constitute valid title for transfer of that property’.3 Transfer of ownership for security purposes is, therefore, not allowed. The Dutch legislator already a ccepted that this provision should not be applied in the case of foreign trusts which have to be recognised under the Hague Trust Convention 4 and in the case of so-called `repo-transactions’between large financial institutions.5 Furthermore, the fiducia ban will not be adopted in the new Netherlands Antilles and Aruba Civil Code, which is * J.H.M. van Erp is professor of civil law and European private law, Maastricht University, the Netherlands. ** L.P.W. van Vliet is lecturer in private law, Maastricht University, the Netherlands. 1. We will use the following abbreviations: Fw. (Faillissementswet; Insolvency Act), HR (Hoge Raad; Netherlands Supreme Court), NJ (Nederlandse Jurisprudentie; law reports), RvdW (Rechtspraak van de Week; law reports), Stb. (Staatsblad; Bulletin of Acts and Orders), Trb. (Tractatenblad; Bulletin of Treaties), WPNR (Weekblad voor Privaatrecht, Notariaat en Registratie). Recent legislative materials can be found on the following website: http://www.overheid.nl/op/ and recent case-law on: http://www.rechtspraak.nl. 2. Leading manuals are: F.H.J. Mijnssen and P. de Haan, Asser’s Handleiding tot de beoefening van het Nederlands burgerlijk recht, vol. 3 I, Goederenrecht, Algemeen goederenrecht, 14th ed., Kluwer, Zwolle 2001 F.H.J. Mijnssen and A.A. van Velten, Asser’s Handleiding tot de beoefening van het Nederlands burgerlijk recht, vol. 3 III, Zakenrecht, Zekerheidsrechten, 12th ed., Kluwer, Zwolle 1994; W.H.M. Reehuis et al., Goederenrecht, 11th ed., Kluwer, Deventer 2001; H.J. Snijders and E.B. Rank-Berenschot, Goederenrecht, 3rd ed., Kluwer, Deventer 2001. 3. The English translation of Civil Code provisions is based upon P.P.C. Haanappel/E. Mackaay, Nieuw Nederlandse Burgerlijk Wetboek, Het Vermogensrecht, Kluwer Law and Taxation Publishers, Deventer/Boston 1990, and upon P. Haanappel/E. Mackaay/H. Warendorf/R. Thomas, Netherlands Business Legislation, Kluwer Law International, The Hague/London/Boston (loose leaf edition). 4. Trb. 1985, 141 and Trb. 1996, 9; see art. 4 of the Act implementing this convention, the Wet conflictenrecht trusts, Stb. 1995, 508. 5. See art. 5 Wet vervanging referentierentes, Stb. 1998, 716