An interesting judgment of the Court of Appeal (Gerechtshof) of Amsterdam of 17 January 2012 shows that Dutch courts have jurisdiction to deal with international mass claim settlements. In its decision, the Court made binding a settlement agreement reached in the Converium case. This settlement awards damages to all non-American shareholders of Converium, a Swiss reinsurer, further to a decline in the value of the company's shares following announcements of reserve increases.
Converium's shareholders had brought a putative securities class action before the US courts, arguing that the company misrepresented the sufficiency of its loss reserves and thus misrepresented its financial strength. In the course of these proceedings, the New York District Court excluded from the "class" the non-American shareholders that bought Converium shares on a stock exchange outside of the US. A final class settlement for the benefit of the American shareholders only was approved in December 2008. Subsequently, settlement negotiations were entered into on behalf of the non-American shareholders and a petition was lodged before the Amsterdam Court of Appeal to declare the settlement agreement binding.
In the Netherlands, class settlement agreements can be declared binding pursuant to the Act on collective settlement of mass damage claims (hereinafter the "Act") which entered into force on 27 July 2005. The Act provides that an agreement on the payment of compensation for damage concluded between a foundation (representing the interests of the injured parties) and one or more parties which committed to compensate for this damage may be declared binding by the Amsterdam Court of Appeal on persons to whom the damage was caused. The Act thus allows for an efficient and effective settlement of mass claims. The recent judgment of the Amsterdam Court demonstrates that the mechanism provided by the Act can also be used in multi-jurisdictional class actions.
Indeed, the alleged infringement at stake in this case took place outside of the Netherlands, the companies involved are Swiss and only around 200 of the 12,000 non-American shareholders concerned are residents of the Netherlands. Nevertheless, the Amsterdam Court of Appeal decided that it had jurisdiction to rule on the settlement agreement on the basis of the Brussels I Regulation (Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters).
The judgment of the Amsterdam Court of Appeal is important as it allows global class action settlements through Dutch courts and hence provides a mechanism to obtain settlements for plaintiffs excluded in other jurisdictions.
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