THE BOTTOM LINE
- Expanded Litigation Risk: Foreign companies can be sued in the Netherlands for causing commercial harm (tort), even if the damaging actions were performed outside the EU.
- “Center of Interests” is Key: For claims of reputational damage, Dutch courts can establish jurisdiction based on where the harmed company has its “center of interests,” which is typically its main place of business.
- Foreseeability Matters: If your company does business with a Dutch entity, it may be considered foreseeable that any resulting disputes could land in a Dutch court, strengthening the case for jurisdiction.
THE DETAILS
In a notable procedural ruling, the District Court of Rotterdam has confirmed its authority to hear a case involving a Dutch company’s claim for reputational damage against its former Moroccan business partner. The dispute arose after the Moroccan company, Mafoder, terminated what the Dutch firm, Castart, considered an agency agreement. Castart alleges that Mafoder subsequently damaged its reputation by improperly sharing confidential business correspondence with clients. Mafoder challenged the court’s jurisdiction, arguing that since it is based in Morocco and the alleged harmful acts originated there, a Dutch court had no right to hear the case.
The court’s decision hinged on interpreting the legal concept of “the place where the harmful event occurred.” Under Dutch law, which mirrors EU principles, jurisdiction in tort cases can be established either where the wrongful act was committed (Handlungsort) or where the resulting damage was suffered (Erfolgsort). The court acknowledged that the act itself—sending the communications—originated in Morocco. However, it focused its analysis on where the actual harm, the damage to Castart’s business reputation, was felt.
By drawing an analogy to cases involving online defamation and personality rights, the court reasoned that the impact of reputational harm is most acutely felt where the victim has its “center of interests.” For a business entity like Castart, this is its principal place of business in the Netherlands. The court concluded that since Castart’s commercial standing was damaged in the market where it primarily operates, the Netherlands was the appropriate Erfolgsort. This connection was deemed strong enough to grant the Dutch court jurisdiction, dismissing the Moroccan company’s challenge and allowing the main case to proceed.
SOURCE
Source: Rechtbank Rotterdam
