Opinion: provisional attachment to ensure fruit exporter payment
By AgriBusiness Legal Desk attorney Jan van de Ven
A common problem for exporters in the international fruit trade is importers in Europe withholding payment. All too often, importers turn out to be less than reasonable during negotiations. This leaves an exporter in South Africa, Chile or Argentina with a difficult choice to make: incur legal costs by going to court in Europe, without certainty the case will be won and payment ultimately made, or leave the matter entirely, thus ensuring that nothing will be paid.
An often effective tool for overseas fruit exporters to tip the balance in their favor, is applying for provisional attachment measures in the Netherlands. Provisional attachment allows exporters to seize assets in the Netherlands: fruit in storage, bank accounts or accounts payable (for example at large retail chains who bought from the importer); even office furniture and company shares can be seized.
Once assets are seized, the importer can no longer use them. An importer who all of a sudden finds out he can no longer access the money in his bank account, is refrained from delivering fruit that is in his warehouse, or doesn't get paid by his clients until the dispute with the exporter has been resolved, frequently turns out be much more forthcoming in negotiations to resolve matters amicably.
And if an amicable solution is not possible, then by the time the courts issue their final verdict, the exporter can rest assured that there will be enough funds to ensure he gets paid.
Even if the importer himself is not based in the Netherlands, for example in Scandinavia, Germany or Southern Europe, provisional attachment in the Netherlands is still an option as long as there are assets located in the Netherlands. For example, a South African exporter who sells to a German importer, can apply for provisional attachment in the Netherlands to seize assets of the German importer that are located there.
Such assets could be fruit belonging to the German importer that is kept in cold storage in Rotterdam, or it could be accounts payable by a Dutch bank or retailer that would eventually be paid to the German importer.
As the Netherlands is a European hub for the international fruit trade, sooner or later importers, wholesalers and traders all over Europe deal with the country. Overseas exporters are well advised to consider these options when doing business on the old continent.
This application can be useful tool for an Ecuadorian company selling to a German importer, a Peruvian exporter doing business with an Italian importer or a Namibian exporter selling in Sweden.
Applying for provisional attachment is straightforward in the Netherlands. The courts typically grant an application for provisional attachment within a day and the application is dealt with ex parte, meaning that the importer does not learn about it until after his assets are seized, ensuring complete surprise and maximum effect.
Jan van de Ven is a lawyer at AgriBusiness Legal Desk, an Amsterdam-based law firm providing legal services to the international food and agribusiness industry. Van de Ven frequently represents overseas fruit exporters in Europe.