FOREIGN CLAIMS SECURED BY ARUBAN SECURITY RIGHTS

January 25, 2010 6:04 AM

The foreign law governed claim must be sufficiently identifiable

Many financing arrangements are of a cross-border nature. For instance, a loan agreement governed by English law with the loan secured by a right of pledge governed by the laws of Aruba. This raises all kinds of questions.

Any foreign right, for instance a claim, in which an Aruban pledge is created, must be sufficiently identifiable (‘met voldoende bepaaldheid omschreven’) within in the meaning of section 3:84(2) of the Civil Code of Aruba.

Also, if one wishes to create a right of pledge in a foreign right, such a right must be a registered claim (‘een tegen één of meer bepaalde personen uit te oefenen recht dat niet aan toonder of order luidt’).

The following serves as an explanation of the example given. As a pledge (governed by Aruban law) merely serves to secure a claim (governed by English law), the contents of the pledge is determined by the secured claim. A pledge may secure both existing and future claims, as long as such claims are sufficiently specific or determinable. Generally speaking, a claim is sufficiently determinable if the claim arises from a contract granting a credit facility and the amount of the claim is, for instance, not arbitrary.

Karel Frielink
Attorney (Lawyer) / Partner

23 January 2010