No netting after the trigger date: the Dutch Supreme Court rejects the set-off defence for banks in the run-up to insolvency.

HR 13 March 2026, ECLI:NL:HR:2026:390 (Jansen q.q./Rabobank); HR 13 March 2026, ECLI:NL:HR:2026:391 (Rabobank/Louwerier q.q.)

When a company is sliding into insolvency and its bank knows it, what happens to money that flows in and out of the account in those final weeks? Can the bank net incoming payments against outgoing ones — effectively treating itself as a conduit rather than a beneficiary — and thereby reduce its exposure to clawback by the liquidator? On 13 March 2026, the Dutch Supreme Court (Hoge Raad) answered that question with an unambiguous no, and in doing so put to rest a doctrine that had been gaining traction in the lower courts: the so-called netting doctrine (salderingsleer).

Background: the set-off prohibition of Article 54 Fw

Under Article 54(1) of the Dutch Bankruptcy Act (Faillissementswet, Fw), a party that has acquired a claim on or a debt to the insolvent estate from a third party after the trigger date — the moment at which it knew or ought to have known that bankruptcy was to be expected — may not set off that claim or debt against its counterpart. For banks operating current account facilities, this rule has long been interpreted strictly: the moment a bank credits an incoming payment to its customer's account, it becomes the customer's debtor for that amount. Under settled Supreme Court authority going back to Loeffen q.q./Bank Mees & Hope and Amro Bank/Curatoren THB, that crediting is treated as equivalent to a debt assumption for the purposes of Article 54 Fw. The bank's privileged position in the payment system confers no exemption.

The one established exception dates from Mulder q.q./CLBN: where an incoming payment discharges a claim that has been (silently) pledged to the bank, the bank may set off, because it already holds a priority position and is not thereby gaining an unfair advantage over other creditors.

The netting doctrine: what Rabobank argued

In two test cases — one involving a café-restaurant financed by Rabobank with a EUR 25,000 credit facility, the other involving Impact Retail B.V. — Rabobank advanced a different argument. It accepted that it could not set off incoming payments received after the trigger date in the usual sense. But it contended that where those incoming payments were subsequently used to fund outgoing payment instructions by the customer, it should be permitted to net the two against each other. The bank, on this view, was merely acting as a conduit: money came in, money went out to other creditors of the debtor, and the bank ended up no better off. Requiring the bank to pay the gross incoming amount to the estate while absorbing the cost of the outgoing payments it had facilitated would, Rabobank argued, be unfair — and would incentivise banks to pull credit lines and freeze accounts the moment insolvency loomed, to the detriment of the debtor and its creditors alike.

The Court of Appeal in Arnhem-Leeuwarden found this reasoning persuasive and upheld the netting approach in one of the two cases. The Court of Appeal in 's-Hertogenbosch rejected it in the other. The Supreme Court was asked to resolve the conflict.

The Supreme Court's ruling

The Supreme Court sided with the liquidators in both cases. Its reasoning is crisp. Article 54 Fw is triggered by an incoming payment received after the trigger date. The fact that the resulting credit balance is subsequently drawn down by outgoing payments does not change the analysis. The bank became the debtor of the account holder the moment the incoming payment was credited. That debt falls squarely within the prohibition. There is no basis for carving out the portion of the incoming payment that was later used for outgoing instructions. Requiring the bank to pay the full amount to the estate does not put the bank in a worse position than it would have been absent the incoming payment — it simply prevents the bank from obtaining a position better than that of other creditors, which is precisely what Article 54 Fw is designed to achieve.

The Supreme Court also rejected the policy argument. Banks that find themselves in this position retain the option of refusing to execute payment instructions once the trigger date has been reached. That they may choose not to exercise that option — whether for commercial reasons or out of concern for the debtor's ability to wind down its affairs in an orderly manner — is a business decision, not a legal entitlement to set-off.

What this means for the financing practice

The judgments have immediate and practical consequences for any lender operating current account or revolving credit facilities in the Dutch market.

The trigger date is the hard line. Once a bank knows or ought to know that its customer's bankruptcy is to be expected, every incoming payment credited to the account becomes an item that, absent a valid pledge over the underlying receivable, must be paid to the estate in full upon bankruptcy. The gross amount is recoverable by the liquidator. Netting against outgoing payments made from the same account is not available.

Silent pledge coverage is critical. The Mulder q.q./CLBN exception remains intact, but its scope is limited and its application requires a valid, perfected silent pledge (stil pandrecht) over the specific receivable that generated the incoming payment. In retail and e-commerce contexts — as Rabobank itself acknowledged — the window between the creation of a receivable and its collection is often too narrow for a pledge to attach before the payment arrives. Lenders financing businesses with high-velocity receivables flows should review whether their security package provides effective coverage in this scenario.

Omnibus pledge arrangements. Many facility agreements include revolving pledge arrangements (verzamelpandaktes) designed to capture future receivables as they arise. The robustness of these arrangements — in terms of perfection timing, notification mechanics, and the ability to trace incoming payments to specific pledged receivables — deserves careful attention in the light of these judgments.

Account structuring and concentration accounts. Where a lender has significant exposure, routing collections through dedicated accounts over which a first-ranking pledge has been granted, with clear tracing mechanics, reduces the risk of incoming payments falling outside the Mulder exception. This is standard practice in structured and project finance, but less consistently applied in general corporate lending.

Credit risk management. Lenders should review their internal protocols for monitoring the trigger date and the consequences that flow from it. Once the trigger date is reached, the decision whether to continue executing payment instructions is a conscious one — and as the Supreme Court makes clear, it carries a cost that cannot be recovered through netting.

Conclusion

The Supreme Court's twin judgments of 13 March 2026 close the door on the netting doctrine and reinforce the strict logic of Article 54 Fw: the set-off prohibition is absolute for payments received after the trigger date, and the fact that those payments were passed on to other creditors via outgoing instructions provides no defence. For lenders, the message is to get the security right before the trouble starts — because once the trigger date arrives, the gross exposure to the estate is real.

This update is for informational purposes only and does not constitute legal advice. No attorney-client relationship is created thereby.