Charlotte Van Steenderen, Van Steenderen Mainport Lawyers, Rotterdam

Ref: Judgment of the Rotterdam District Court dated 28 July 2023 in the proceedings between Bayrol Deutschland GmbH, plaintiff in the main action, defendant in the (conditional) counterclaim proceedings and NBK B.V., defendant in the main action, plaintiff in the (conditional) counterclaim proceedings.

The facts

Agreement (2010) whereby Bayrol and NBK agree the latter to store the chemical products TCCA and BCDMH produced by Bayrol and to arrange for the customs declaration. Bayrol produces products for chemical water treatment, including for swimming pools. NBK’s contract documents and invoices state that Fenex conditions apply.

In 2021 and 2022, NBK takes batches of Bayrol’s TCCA originating from China into storage. The big bags used for transport of these batches turned out to be of poor quality and, moreover, are improperly loaded into containers in China. This causes leakage, resulting in damage to the containers and to NBK’s storage space. Bayrol pays an advance of EUR 250,000 to NBK, from which amount NBK’s damage invoices can be paid. Part of the advance payment still remains. By order of Bayrol, NBK cleans 154 containers that were contaminated by the TCCA spill.

In 2022, NBK alerts Bayrol to the possibility that it can reclaim customs duties paid on imports of TCCA. Bayrol has a third party submit a refund request of over EUR 1,100,000 to the tax authorities. NBK asks Bayrol for a refund of 15% of the amount to be received back after which Bayrol offers a refund of 2%.

On May 31, 2023, NBK refuses to release a batch of BCDMH that it holds in storage for Bayrol. On July 19, 2023, Bayrol, under protest, makes a payment of over EUR 10,000 to NBK for damages suffered by NBK due to the improperly packaged TCCA. Bayrol claims an injunction against NBK to cooperate in delivering the BCDMH. NBK counterclaims payment of an amount of approximately EUR 86,000 as an advance payment and in respect of outstanding invoices.

Bayrol owns the batch of BCDMH held in storage by NBK so that NBK is in principle obliged to cooperate in the release of the batch.

The decision of the Court

The Fenex terms and conditions (Dutch general forwarding conditions) apply to the agreement. The parties have been working together since 2010 and NBK’s contract documents and invoices refer to those terms and conditions. In view of this, NBK was justified in relying (pursuant to Articles 3:33 and 3:35 of the Dutch Civil Code (“DCC”)) on the terms and conditions being applicable.

Pursuant to Article 17 Fenex conditions, NBK is entitled to an extended lien, namely on all items held by NBK for both existing and future claims against Bayrol and also with respect to claims not related to the retained items. The lien to which NBK is entitled is broader than follows from Article 6:52 DCC in conjunction with Article 3:290 DCC. It is not required that NBK’s claim is due and payable and that there is sufficient connection between NBK’s claim and its obligation to surrender the BCDMH lot.

NBK cannot claim payment of a percentage of the cost savings in the cleaning work of the containers contaminated by TCCA leakage. While it is true that NBK performed the work cheaper than a third party would have done, so that Bayrol benefited from NBK’s efforts, Bayrol has already paid NBK for this work. Without an agreement on that point, NBK is not entitled to a payment of an additional “success fee”.

NBK is entitled to fees (Article 7:405 paragraph 1 DCC) in connection with its work in preparing the refund request in respect of overpaid customs duties. The fact that the contract documents provide no basis for the fee sought by NBK does not in itself preclude any claim to these fees. NBK did not perform this work without knowledge of Bayrol but acted in consultation with Bayrol. Therefore, NBK was entitled to assume that it performed its work in this context on behalf of Bayrol and would therefore receive remuneration for it. Bayrol has not yet paid NBK for this work.

This entails that NBK can invoke its right of retention with respect to this claim. After all, it will still be able to claim wages for the work it has performed. This does not alter the fact that the amount of this claim has not yet been established and that it may not yet be due and payable, because NBK wants to be paid on a ‘no cure no pay’ basis. After all, the lien extends to future claims.

NBK can invoke the lien, but only for the benefit of its (future) claim on account of customs duty restitution. In fairness, however, it must be assumed that NBK must abandon its reliance on the lien if and to the extent that Bayrol provides adequate security by other means. A balancing of the interests of both parties – on the one hand the interest of NBK in maintaining sufficient security, on the other hand the interest of Bayrol to dispose of its lot BCDMA at short notice – therefore implies that Bayrol’s claim may be eligible for allowance if it is subject to the condition of security. In this context it plays a role that only part of the claims asserted by NBK remain and that the value of the retained BCDMA lot amounts to approximately EUR 1,000,000. It cannot be determined what percentage should be assumed and what remuneration is due to NBK. The value of the batch of BCDMA is a multiple of the claim. In light of this, it is reasonable for NBK to release the BCDMA after Bayrol has provided security in the amount of EUR 75,000. The form of this security must comply with Article 6:51 paragraph 2 DCC.

In the counterclaim, the claim for fees from customs duty restitution is not due and payable. Although NKB is entitled to fees for its work, such remuneration is on a ‘no cure no pay’ basis. That nature of the remuneration means that NKB cannot claim it until the restitution is realized.