- Banks and cross-border issues — Debt — Close-out netting — Set-off
This chapter discusses the law of set-off in the Netherlands. Under Dutch law, set-off operates as a mechanism for discharging claims. It allows a debtor to discharge his claim by reducing or extinguishing his creditor's claim by the amount of his cross-claim. There is no special regime for set-off clauses in finance documentation in the Netherlands. The chapter first provides an overview of set-off between solvent parties, focusing on statutory set-off, contractual set-off, and current account set-off. It then considers set-off against insolvent parties, taking into account the cooling-off period in bankruptcy, before turning to the so-called actio pauliana. It also explains specific provisions of the EU Collateral Directive aimed at protecting close-out netting provisions in a financial collateral arrangement. Finally, it analyses set-off in recovery and resolution of credit institutions and investment firms, along with issues arising in cross-border set-off.
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