On 17 January 2012, the Converium collective settlements were declared binding by the Amsterdam Court of Appeal. As noted in our Update of 18 November 2010, in an interim ruling the Court had preliminarily assumed jurisdiction over a request to declare two international collective settlements binding in a case in which none of the potentially liable parties and only some of the potential claimants are domiciled in the Netherlands. No subsequent objections were filed with regard to the interim ruling. The Court has now affirmed its earlier decision on jurisdiction. However, objections were filed with regard to the fairness of the settlements. In today's ruling, the Court dismissed those objections.
Objections that the settlements were unfair and unreasonable
because of the disparity between the compensation received by the
US and non-US shareholders and because of the fees to be awarded to
the US class counsel were dismissed. The Court held that when
applying the fairness test it will consider all relevant facts and
circumstances, including those arising after the conclusion of the
settlement agreement. This means that case law issued after
the settlement agreements had been concluded and which is relevant
for determining the legal position of the beneficiaries of the
settlement agreements may be taken into account. In this matter,
the parties seeking the binding declaration had pointed out that
the US Supreme Court ruling in Morrison v. National Australia Bank,
which was issued after the settlements had been announced,
effectively confirmed the earlier exclusion by a US court of non-US
shareholders from the class in this particular matter. According to
the Amsterdam Court of Appeal, a disparity between the compensation
received by US and non-US shareholders can be justified by a
difference in their legal positions and the unavailability of
effective means for non-US shareholders to enforce their claims -
collectively or individually - absent a collective
settlement.
Another objection was that the contingency fee arrangement pursuant
to which US class counsel would receive fees out of the settlement
amount, was incompatible with Dutch law. The Amsterdam Court of
Appeal dismissed this objection, finding that in the context of
determining the fairness of a collective settlement also under
Dutch law the court may take into account customary US fee
practices, when US law firms are involved and the legal services
provided by them took place predominantly in the US.
NautaDutilh N.V. (Daan Lunsingh Scheurleer and Ianika Tzankova) represented Converium (now Scor Holding Switserland AG) in the proceedings leading to the ruling.
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