Global menu

Our global pages


The enforcement of securities connected to a pledged debt by the pledgee

  • Netherlands
  • Banking and finance



Pursuant to Article 3:246 paragraph 1 of the Dutch Civil Code (DCC) pledgees have the power to enforce their right of pledge on receivables by claiming (direct) payment of the receivable. This power also includes the right to enforce rights of pledge that in their turn have been granted as security for the repayment of the pledged receivable. The Supreme Court confirmed this in its judgement of 18 December 2015 (ABN AMRO / Marell).

ABN Amro Bank N.V. (ABN AMRO) had a claim on Pegas Flex B.V. (Pegas). As security for repayment of its debt, Pegas gave ABN AMRO, among other things, a pledge on a receivable that Pegas had on the construction company Marell B.V. (Marell). Pegas acquired a pledge on all Marell’s receivable on its debtors to secure its receivable on Marell. The facts of this case can be represented as follows:


On 28 June 2013 ABN AMRO informed Marell of the pledge that Pegas had granted and summoned Marell to pay the outstanding amount, which Marell did not do. On 3 July 2013 the debtors of Marell were informed by ABN AMRO about the pledged receivable of Pegas on Marell, so that the pledge of these (“sub”)claims, granted to Pegas, were made public. Subsequently, Pegas was declared bankrupt on 9 July 2013. ABN AMRO approached debtors of Marell before and after the bankruptcy of Pegas. They were summoned to pay ABN AMRO directly instead of Marell. It was unclear for the debtors of Marell who to pay their debts to, for being discharged from their obligations: Marell, Pegas or ABN AMRO.

The Court of Appeal ruled that ABN AMRO had no power to collect the receivables from Marrell’s debtors on the basis of article 3:246 paragraph 1 DCC. According to the Court of Appeal these receivables were re-pledged, for which there was no unambiguous power to do so (article 3:242 DCC). In view of the Court of Appeal, pledgees are not allowed to use the pledged good for one’s own interests or to have it at one’s disposal, except for the recovery of claims. An exception is the possibility to re-pledge in accordance with article 3:242 DCC and is only possible if the power to re-pledge is granted unambiguously to the pledgee. In this case that would have meant that Pegas re-pledged all its secured receivables on Marell’s debtors to ABN AMRO to secure its debt to ABN AMRO. If that would have been the case, ABN AMRO would have been authorized to enforce the right of pledge over the ‘sub’claims against Marell’s debtors if and when Pegas would come in default.

According to the Court of Appeal however, a re-pledge was not granted unambiguously to Pegas. This was in fact excluded in the pledge agreement between Marell and Pegas. Therefore, according to the Court of Appeal, ABN AMRO did not receive a valid right of pledge over the receivables against Marell’s debtors.

ABN AMRO argued that it did have the power to collect the receivables, because the pledge of Pegas on the claims that were pledged to Pegas were ancillary to the pledged claims of Pegas on Marell that was given to ABN AMRO. According to ABN AMRO this meant that it could enforce Marell’s pledge on the receivables against Marell’s debtors. This argument failed according to the Court of Appeal, because article 3:242 DCC would not have any value if this article could be circumvented like in this case.

The main question that was then presented to the Supreme Court was whether ABN AMRO had the power to enforce a right of pledge that is ancillary to a receivable over which ABN AMRO already had a valid right of pledge. In short, the answer to this questions is: yes.

With respect to the rights of pledge – and in fact also for mortgage rights – case law confirms that these can be enforced by the pledgee of a claim that has been secured by one of these types of security rights. With respect to other types of security rights such as several liability, retention of title or setoff, there is still discussion about the enforceability by a pledgee of these types of security rights. Unfortunately it goes beyond the scope of this article to discuss this more in detail. Therefore we limit ourselves to the comment that in our opinion there are no serious objections to enforce also these types of securities by the pledgee.

In practice, pledgees are advised to verify if security rights have been given for receivables that are pledged to the pledgee. In this case, these kind of receivables provide more security. This information could for example be included in the (risk) rating of the debtor.