Forged Loan Termination Agreement No Benefit to Debtor in the Netherlands


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In summary proceedings in the Netherlands concerning an unpaid loan, the debtor suddenly produced an important document. This was purported to show that the creditor, despite an unpaid balance of a few million, had terminated the loan and that nothing more needed to be paid. Too good to be true? The summary proceedings court handling the case had the same opinion.

Debtor refuses to cooperate despite agreement

Two parties conclude a loan agreement for €6 million. As surety for repayment, the debtor has pledged all of its shares in the company to the creditor. At a certain point, the debtor goes into default. The creditor cancels the loan and asks the debtor to cooperate with a conversion of the unpaid amount into shares, as agreed in the loan
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agreement. The debtor refuses to do so and the dispute ends up in court as summary proceedings.

Loan terminated in writing 2 days prior to interim measures?

Two days before these summary proceedings, the lawyer of the debtor pulls a wondrous document out of his hat. The document states – in brief – that the creditor declares that the debtor has made all his payments and that the loan agreement therefore has terminated. This document was purported to be signed by one of the creditor’s (Russian) directors.

Dutch Court: statement of termination is implausible

The creditor's lawyer denies ever having seen this document, let alone having signed it. She maintains that the document is a forgery. The Dutch preliminary injunctions court was just as sceptical. No plausible explanation was given for the conclusion of this termination agreement. The debtor’s explanation, i.e. that parties considered the loan agreement obsolete, was not credible. After all, the loan had not been paid back, which the debtor also acknowledged. It is implausible that the creditor (or the creditor’s director) would forgive a loan while various sureties had been negotiated upon the conclusion of the loan.

Director not present at document signing

The fact that this particular director could not read or understand English and was always supported by an interpreter, also plays a role. It is unlikely that he would have signed a document in English in the sole presence of the debtor. According to the debtor's lawyer, the document was signed at Schiphol Airport and the director then flew directly back to Moscow. However, a copy of the director’s passport showed that he had not been in the Schengen area at the moment the document was signed. In fact, the required stamps were absent.

Falsification of documents: criminal offence under Dutch law

The Dutch court did not address the issue of the document’s falsification, but it placed no value on the content. So the court presumes that the loan agreement is still in force and honours the creditor’s claim. Although the court in this case passed no verdict on the document’s authenticity, the facts do clearly indicate forgery. It is also remarkable that the debtor never mentioned this document during the parties’ negotiations concerning a payment schedule prior to the proceedings. Falsification of documents is a criminal offence and the creditor can report this.

ABOUT THE AUTHOR: Hidde Reitsma
Hidde has a varied consultancy and litigation practice, focusing on corporate law and insolvency law. He frequently acts in proceedings before the Enterprise Chamber of the Court of Appeal in Amsterdam and in cases on directors’ liability. Hidde also advises on drawing up and negotiating contracts, mergers and acquisitions and joint ventures.

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Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.

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