On 17 January 2012, the Amsterdam Court of Appeal declared an international collective settlement binding in the Converium/SCOR securities class action – the first such case settled on a Trans-Atlantic basis.
In addition to showing its willingness to provide a forum for investors to effectively settle their claims on a European or global basis, the Court of Appeal in Converium substantially increased it jurisdictional reach, to the benefit of investors in this case and potential claimants in the future. It secured jurisdiction even though the claims were not brought under Dutch law, the alleged wrongdoing did not take place in the Netherlands, and none of the potentially liable parties and only a limited number of the potential claimants are domiciled in the Netherlands.
The decision will in principle have to be recognised in all European Member States, Switzerland, Iceland and Norway. However, no case law exists on this issue, and whether countries will recognise the decision will depend on domestic laws. Of importance is the fact that the Netherlands is the only European country where a collective settlement can be binding on an entire class on an ‘opt out’ basis. Consequently, the Netherlands is an attractive venue for settling international mass claims, especially given the Dutch appetite to facilitate such settlements when there is very limited connection to the Netherlands.
The importance of this decision is underscored by the US Supreme Court’s recent decision in Morrison v National Australia Bank where it restricted the rights of investors to bring a claim before US courts for shared that were not purchased on the US stock exchange. As such European and American investors will more readily look to European courts to resolve their disputes.
Photo credit: Daniel Dionne / Foter / CC BY-SA
