Dutch Civil Code

Book 10 Private International Law

Title 10.10 Real property law

Section 10.10.1 General provisions

Article 10:126 Scope of application
- 1. The present Title (Title 10.10) does not affect the Convention on the Law Applicable to Trusts and on their Recognition, concluded at the Hague on 1 July 1985 (Treaty Series 1985, 141), nor does it affect Title 10.11 of the Dutch Civil Code. Without prejudice to what results from that Convention or that Title, a juridical act intending to transfer an asset to the trustee of a trust as meant in Article 10:142, which transfer is governed by Dutch law while the trust itself is governed by foreign law, shall not constitute an invalid legal basis for transfer on the sole ground that this juridical act intends to transfer that asset as security (collateral) or misses the intention to make that asset, after the transfer, a real part of the property of the acquiring party.
- 2. The present Title (Title 10.10) does not affect Council Directive 93/7/EEC of 15 March 1993 on the return of cultural objects unlawfully removed from the territory of a Member State (OJ L 074 , 27), nor the Implementation Act on the Protection of Cultural Objects against Illegal Export

Section 10.10.2 Real property regime for things

Article 10:127 Law applicable to things and real property rights in things
- 1. Unless provided otherwise in paragraph 2 and 3, the real property regime for things shall be governed by the law of the State on the territory of which that thing finds itself.
- 2. Except where it concerns the application of Article 10:160, the real property regime for registered ships and vessels shall be governed by the law of the State where that ship or vessel is registered.
- 3. The real property regime for registered aircraft and aircraft only registered in a nationality register as referred to in Article 17 of the Convention on International Civil Aviation, concluded at Chicago on 7 December 1944 (Government Gazette 1947, H 165), shall be governed by the law of the State where the aircraft is registered or is registered in the nationality register.
- 4. The law applicable pursuant to the previous paragraphs shall in particular govern:
a. whether a thing is movable or immovable;
b. what the components of a thing are;
c. whether the right of ownership of a thing can be transferred or whether the thing can be encumbered with a limited real property right;
d. the requirements set out for such transfer or encumbrance;
e. the real property rights that can be vested in a thing, and the nature and content of such rights;
f. the manner in which real property rights in a thing may come into existence, may be changed or passed on, or cease to exist, and the mutual relations between those rights.
- 5. Where it concerns the acquisition, encumbrance (establishment), passage, changing or ending of real property rights in a thing, decisive for the purpose of the previous paragraph shall be the moment on which the legal facts, required for such action, take place.
- 6. The previous paragraphs apply accordingly in the case of a transfer or establishment of real property rights in a real property right itself.

Article 10:128 Retention of title*)
- 1. The real effects of a retention of title shall be governed by the law of the State on the territory of which the thing finds itself at the moment of its legal delivery to the buyer. This does not affect the obligations which according to the law that is applicable to the stipulation of a retention of title, may result from that stipulation.
- 2. In derogation from the first sentence of paragraph 1, parties may agree that the real effects of a retention of title for a thing intended to be exported, shall be governed by the law of the State of destination if according to that law the seller’s right of ownership shall not be lost until the price has been paid fully to him. A designation (choice of law) agreed as such shall have effect only if the thing actually is imported in the designated State of destination.
- 3. The previous paragraphs apply accordingly to the real effects of financial and operational leasing of things that are intended to be used abroad.

*) A retention of title means that the seller has made a stipulation due to which the right of ownership of goods already delivered to the buyer shall only be transferred to that buyer after he has paid the whole purchase price.

Article 10:129 Right of retention*
Without prejudice to Article 10:163, beginning and under (a), the arising (coming into existence) and content of a right of retention shall be determined by the law governing the legal relationship on which that right of retention is based.

*) A right of retention is the right to withhold or detain the property of someone else, in respect of any debt which happens to be due by the proprietor to the person who exercises the actual control over the property of that proprietor.

Article 10:130 Real property rights in things moved to another State
Real property rights in a thing that have been acquired or established in conformity with the present Title (Title 10.10), remain vested in that thing, also when that thing is moved to another State. These real property rights cannot be exercised in a way which is incompatible with the law of the State on the territory of which that thing finds itself at the moment that these rights are exercised.

Article 10:131 Acquisition from a person without a right of disposition
The legal effects of the acquisition of a thing acquired from a person without any right of disposition, shall be governed by the law of the State on the territory of which that thing finds itself at the moment of that acquisition.

Article 10:132 Involuntary loss of possession of a thing
- 1. If the circumstances regarding a thing are unknown after the possession of that thing has been lost involuntarily, then the real effects of juridical acts performed by the owner or its legal successor shall be governed by the law of the State on the territory of which the thing found itself before the possession of it was lost.
- 2. If, in a situation as meant in the previous paragraph, the loss of possession is covered by an insurance, then the law that governs the insurance contract shall determine if and in which manner the right of ownership shall pass over to the insurer.

Article 10:133 Thing transported under an international contract of carriage of goods
- 1. The real property regime for a thing which is transported under an international contract of carriage of goods, shall be governed by the law of the State of destination.
- 2. If the transport meant in paragraph 1 takes place in the performance of a sale contract or another contract containing an obligation to transfer the transported thing, or in the performance of a contract containing an obligation to establish a real property right in that thing, then the designation of the law which is applicable to that contract, as inserted in that contract, is deemed to be, in derogation from paragraph 1, also to relate to the real property regime applicable to the transported thing.

Section 10.10.3 Real property regime for debt-claims

Article 10:134 Debt-claim embodied in a document
If a debt-claim is embodied in a document, then the law of the State on the territory of which that document finds itself, shall determine whether that claim is a debt-claim to name or a debt-claim to bearer.

Article 10:135 Debt-claim to name
- 1. Whether a debt-claim to name can be transferred or whether it can be encumbered with real property rights, shall be governed by the law that is applicable to the debt-claim.
- 2. Apart from that, the real property regime for a debt-claim to name shall be governed by the law that is applicable to the contract containing the obligation to transfer the debt-claim or to establish real property rights in it. That law shall in particular determine:
a. the requirements set out for such transfer or establishment of real property rights;
b. the person entitled to exercise the rights enclosed in the debt-claim;
c. the real property rights that can be vested in the debt-claim, and the nature and content of such rights;
d. the manner in which real property rights in a debt-claim may come into existence, may be changed or passed on, or cease to exis,t and the mutual relations between those rights.
- 3. The legal relation between the acquiring party (assignee), the creditor or proprietor (of a limited real property right) of the debt-claim on the one hand and the debtor on the other, the conditions under which a transfer of a debt-claim (assignment) or the establishment of real property rights in a debt-claim can be invoked against the debtor, and the question whether or when the debtor will be discharged from his obligation by performing his debt, shall be governed by the law that is applicable to the debt-claim.

Article 10:136 Debt-claims to bearer
- 1. The real property regime for a debt-claim to bearer shall be governed by the law of the State on the territory of which the bearer document finds itself. Article 10:135, paragraph 1 and 2, shall apply accordingly to the question which subject-matters shall be governed by that law.
- 2. The legal relations between the acquiring party and the debtor, the conditions under which a transfer of the debt-claim or the establishment of real property rights in it can be invoked against the debtor, and the question whether or when the debtor will be discharged by performing his debt, shall be governed by the law that is applicable to the debt-claim.
- 3. Articles 10:130 and 10:131 apply accordingly to debt-claims to bearer.

Section 10.10.4 Real property regime for shares in Corporations

Article 10:137 Share certificate
When a document is regarded as a share certificate according to the law that is applicable to the Corporation which issued that document, then the law of the State on the territory of which that document finds itself, shall determine whether it concerns a registered share or a bearer share.

Article 10:138 Registered shares
- 1. The real property regime for registered shares is governed by the law that is applicable to the Corporation which issues or has issued the shares. Article 10:135, paragraph 1 and 2, shall apply accordingly to the question which subject-matters are governed by that law.
- 2. In derogation from paragraph 1, an Open Corporation (‘Naamloze Vennoorschap’) may, in regard to its issued registered shares, which for the benefit of their tradeability on a regulated foreign stock exchange have been shaped in the form used at the stock exchange of the foreign State where that exchange is located, declare that the real property regime for those shares is governed by the law of the foreign State where the relevant stock exchange is located or by the law of another State in which, with the consent of that relevant stock exchange, transfers and other juridical acts with real effect may or must be performed.
- 3. A designation of the applicable law as referred to in paragraph 2 must me made explicitly and in a way recognizable for interested persons. Furthermore, such designation must be published in two Dutch national newspapers.
- 4. The legal relations between the shareholder, respectively, the proprietor (of a limited real property right) on the one hand and the Corporation on the other, and the conditions under which the transfer of a share or the establishment of real property rights in a share can be invoked against the Corporation, shall be governed by the law that is applicable to the Corporation which has issued the shares.

Article 10:139 Bearer shares
- 1. The real property regime for bearer shares shall be governed by the law of the State where the bearer document finds itself. Article 10:135, paragraph 1 and 2, shall apply accordingly to the question which subject-matters are governed by that law.
- 2. The legal relations between a shareholder, respectively, a proprietor (of a limited real property right) on the one hand and the Corporation on the other, and the conditions under which the transfer of a bearer share or the establishment of real property rights in a bearer share can be invoked against the Corporation, shall be governed by the law that is applicable to the Corporation which has issued the shares.
- 3. Articles 10:130 and 10:131 apply accordingly to bearer shares.

Section 10.10.5 Real property regime for negotiable securities transferable in book-entry form

Article 10:140 Shares forming a part of a block of book-entry securities*)
If shares belong to a block of negotiable securities which are transferable in book-entry form, then Section 10.10.4 is not applicable to the real property regime for such shares to the extent that the provisions of this Section differ from those of Article 10:141.

*) When investors buy shares or other negotiable instruments on a stock exchange via a broker (bank or another financial institution), they usually do not obtain any bearer or other certificate issued for these negotiable securities. It is possible that the broker holds the certificates instead, but as a rule he neither shall have any certificates or documents under his control. Property rights in such shares and other negotiable securities are held in book-entry form, meaning that the relation between the proprietor and negotiable security is traceable only on the basis of an account, usually kept by electronic means, on which the transfer and acquisition of negotiable securities specified by type or number are linked to the name and address of the buyer and seller.

Article 10:141 Law applicable to book-entry negotiable securities*)
- 1. The real property regime for negotiable securities which are transferable in book-entry form, shall be governed by the law of the State on the territory of which the account is kept in which the negotiable securities are booked.
- 2. The applicable law meant in paragraph 1, shall in particular govern:
a. the real property rights that may be vested in the negotiable securities, and the nature and content of such rights;
b. requirements set out for the transfer or establishment of rights as meant under (a);
c. the persons entitled to exercise the rights enclosed in the negotiable securities;
d. the way in which rights as meant under (a) are changed, passed on or ended, and the mutual relation between such rights;
e. the execution.

*) When investors buy shares or other negotiable instruments on a stock exchange via a broker (bank or another financial institution), they usually do not obtain any bearer or other certificate issued for these negotiable securities. It is possible that the broker holds the certificates instead, but as a rule he neither shall have any certificates or documents under his control. Property rights in such shares and other negotiable securities are held in book-entry form, meaning that the relation between the proprietor and negotiable security is traceable only on the basis of an account, usually kept by electronic means, on which the transfer and acquisition of negotiable securities specified by type or number are linked to the name and address of the buyer and seller.