Judicial sale

In the past year Dutch customs have cracked down on solar panels from the far east, basing their actions on rules and regulations aimed at preventing dumping of Chinese solar panels (anti-dumping).

Hoek Ten Katen have acted on behalf of importers, suppliers from Asia and Dutch freight forwarders and warehouses who have been confronted with the fall-out of these actions. As Hoek Ten Katen is working closely with an external customs advocate, practical solutions have been reached in all cases, not only from a civil law perspective, but also from the regulatory point of view. The cases at hand call for an extensive knowledge of the workings of customs regulations, Dutch civil law and the working of the Dutch Code of Civil Proceedings, as well as the working of general conditions as applied by Dutch service providers. All this against the background of the workings of elaborate contracts in the realm of the international sales of goods.

Under Dutch law, pledged goods can be sold judicially by public auction or by private sale, if allowed for by law and the contractual relationship at hand. We have extensive experience in organising auctions and private sales.

Judicial sale of ships

In 2013 our firm handled the largest auction before the Rotterdam court. Nine ocean-going vessels were sold off in one court session. We acted for a bank who decided to enforce mortgages against the vessels as the owners were not meeting their obligations.

As with the arrest of ships, Dutch auction proceedings are straightforward and pragmatically organised. Overriding principle is that the enforcing party must take head of the interests of all creditors and this is simply done by organising the auction in such a way that a maximum price is reached. This objective is usually reached by applying the rules of the so-called Dutch auction. The bailiff is conducting the auction, the bidders are usually represented by their Dutch advocates who are doing the actual bidding. For the bystander it appears to be a rather nerve wrecking process and some costly mistakes have been made in the past. Stakes are literally high.

The system is as follows: first the high price is set. The bailiff calls out a certain amount, usual the minimum amount against which the vessel is to be sold. The advocates then engage in bidding over this amount, until an amount is reached that no one wants to overbid.

The highest bidder does not win the vessel yet, but he does win a premium of a certain percentage of the purchase price. This premium is for rewarding his bravery in setting the highest price. Let us imagine that the bailiff commenced bidding at US$ 9 mio, and that the highest bid is US$ 15 mio. All present know that a reasonable price for the vessel would be US$ 11 mio.

The second part of the auction commences. The bailiff is calling out an ever lower price: "US$ 15 mio, US$ 14.9 mio", and so forth. The first bidder to shoot out "mine!" after the price has been called out has won the auction.

As there are two varieties on this type of auction, mistakes may be made. One variety adds the price as fixed in the first round to the price accepted in the second round. This means that in our example, the advocate shouting "mine" at US$ 10 mio has won the auction for a price of US$ 15 mio plus US$ 10 mio.

As the awarding of the vessel is mentioned in a court decision, usually available in writing on the same day, or the day after the auction, the registrars of ships worldwide are accepting this court decision as evidence that transfer has taken place. The bidder is under no obligation to disclose his principal to those present at the auction.

Our firm has hands on experience in organising auctions and participating in the bidding process.


Harmen Hoek

+31 (0)10 205 21 80

Hofplein 20   3032 AC  Rotterdam
T +31 (0)10 205 21 80   F +31 (0)10 205 21 81