ECLI: ECLI:NL:GHAMS:2024:2966

Titel: ECLI:NL:GHAMS:2024:2966 Gerechtshof Amsterdam , 24-09-2024 / 200.329.939/01

Gerecht: Gerechtshof Amsterdam

Datum uitspraak: 2024-09-24

Zaaknummer: 200.329.939/01

Proceduretype: NCCA

Onderwerp: Civiel recht

Rechtsmacht: NL

Taal: nl

Uitspraaktype: Uitspraak

URL: https://data.rechtspraak.nl/uitspraken/content?id=ECLI:NL:GHAMS:2024:2966

---

Appeal against the NCC Judgment dated 19 April 2023 (see: ECLI:NL:RBAMS:2023:2650), pertaining to a loan agreement between Ilka as lender and Benelux Wonen as borrower. The Netherlands Commercial Court in Appeal (NCCA) dismisses Ilka’s claim for additional fixed interest because of subordination of the loan to the bank loan and awards its claim for additional variable interest increased with contractual delay interest.  
         --------------------------------------------------------------------------------------- 
         Hoger beroep tegen het NCC-vonnis van 19 april 2023 (zie: ECLI:NL:RBAMS:2023:2650) over een leningsovereenkomst tussen Ilka als kredietverstrekker en Benelux Wonen als kredietnemer. Het hof (Netherlands Commercial Court in Appeal) wijst gevorderde aanvullende vaste rente af vanwege achterstelling van de lening aan de lening van de bank en wijst de vordering tot betaling van aanvullende variabele rente, vermeerderd met de contractuele rente, toe.

AMSTERDAM COURT OF APPEAL 
     
     
       Netherlands Commercial Court of Appeal 
     
     
     
       Case number Court of Appeal	: 200.329.939/01 
       Case number District Court	: NCC 22/016 - C/13/722226 NC ZA 22-4 
     
     
     
     
       
         Judgment given on 24 September 2024 
       
     
     
     
     
       in the case of: 
     
     
     
       the Swiss company with limited liability (Aktiengesellschaft)  
       
         ILKA A.G. , 
       Aesch, Switzerland, 
       claimant in appeal, 
       represented by A.A.H.J. Huizing and M.P.R. Sardjoe, lawyers, 
     
     
     
       against 
     
     
     
       the Dutch private company with limited liability 
       
         BENELUX WONEN B.V., 
       
       Breda, the Netherlands,  
       defendant in appeal, 
       represented by E.H.M. Bieleveld and F.F.W. Verbeek, lawyers.  
     
     
     
       The parties are referred to below as Ilka and Benelux Wonen. 
     
     
     
   
   
     
       1 Summary of the case 
     
     
       This case is about the interpretation of a loan agreement between the parties, more specifically the clauses pertaining to the fixed interest and the variable interest that Benelux Wonen is to pay Ilka. Ilka asserts that Benelux Wonen has not fulfilled its interest payment obligations and claims that Benelux Wonen is ordered to do so, including payment of delay interest. Benelux Wonen argues it has fulfilled all of its obligations and denies the claim. The Court of Appeal is requested to interpret the loan agreement and partially awards Ilka’s claims. 
     
     
     
   
   
     
       2 The procedure 
     
     
       2.1. 
       In addition to the file of first instance, the following documents were submitted to the Court of Appeal (the “Court”) in digital form via eNCCA: 
       
         ­ the writ of summons in appeal, including the grounds of appeal and Exhibits nos. 40 to 42, dated 19 July 2023; 
         ­ the statement of defence in appeal, including Exhibits nos. 1 to 8, dated 21 November 2023; 
         ­ additional Exhibit no. 43 submitted by Ilka.  
       
       
     
     
       2.2. 
       The case was heard on 5 June 2024. Ilka was represented by its lawyers A.A.H.J. Huizing and M.P.R. Sardjoe mentioned above and by the lawyer L. Shahbazyan. Benelux Wonen was represented by its lawyers E.H.M. Bieleveld and F.F.W. Verbeek mentioned above. The lawyers pleaded their case using pleading notes that are part of the case file.  
       
       
     
   
   
     
       3 The facts 
     
     
       3.1. 
       Ilka is a company limited by shares under Swiss law and is active in the business of consulting, investment, financial management and lending services. Ilka's managing directors are Mr [A] and Mr [B]. 
       
     
     
       3.2. 
       Ilka belongs to the Cofilux Group, headed by Cofilux Invest S.A. ("Cofilux"), a public liability company incorporated and existing under Luxembourg law. Cofilux is a holding company that is active in the business of,  inter alia , financing and holding shares in other companies. One of the companies within the Cofilux Group of companies is Cofilux Investments 2 S.A. Cofilux holds 100% of the shares in Cofilux Investments 2 S.A., which latter company in its turn has a 100% share interest in Ilka. As a result, Cofilux is an indirect 100% shareholder in Ilka. The day-to-day management of Cofilux is conducted by,  inter alia , [B] and Ms [C]. 
       
     
     
       3.3. 
       Benelux Wonen is a private limited liability company under Dutch law, the business activities of which include the acquisition, management and leasing of real estate, more specifically residential property. Benelux Wonen is managed by Hemo Beheer B.V. ("Hemo Beheer"). The managing director of Hemo Beheer is Mr [D]. 
       
     
     
       3.4. 
       Benelux Wonen was incorporated on 2 November 2016 by Cofilux and House Delta B.V.B.A. ("House Delta"), a limited liability company under Belgian law, both of which held 50% of the shares (1,500 shares each) in Benelux Wonen at the time of the incorporation. House Delta's managing directors are Mr [E] and Mr [F]. At the same date, Cofilux and House Delta transferred some of their shares to Hemo Beheer. After the share transfer Cofilux and Hemo Beheer each held 35% and House Delta held 30% of the shares in Benelux Wonen. 
       
     
     
       3.5. 
       Prior to the incorporation of Benelux Wonen, on 1 November 2016, Hemo Beheer, Cofilux and House Delta signed a letter of intent ("LOI"). According to the LOI, the parties involved agreed that Hemo Beheer, on behalf of Benelux Wonen, would take care of the purchase and sale of real estate assets (apartments) in the Netherlands. The parties also agreed that Cofilux and House Delta would take care of any bank financing required by Benelux Wonen, and that Cofilux would provide additional financing to be secured with a right of second mortgage. Furthermore, the parties agreed that all of them would be managing directors of Benelux Wonen: Hemo Beheer represented by [D], Cofilux represented by [B], and House Delta represented by [F]. 
       
     
     
       3.6. 
       
         On 23 December 2016, the accountant of Benelux Wonen, Mr [G] sent an e-mail to the managing directors of Benelux Wonen ( inter alia  [B]) regarding the manner in which the real estate portfolio would be financed. The e-mail shows that it was Benelux Wonen's intention to acquire real estate for an average purchase price of around EUR 100,000.00. Furthermore, the e-mail shows that the real estate would be financed for 70% by means of a bank loan and for 30% by loans provided by Cofilux or any of its group companies. With respect to the loans that Cofilux would provide, [G] wrote as follows: 
         “(…) Verder dient [B] te bezien of achterstelling van de leningen via Cofilux Invest S.A. acceptabel is voor de betreffende financiers. 
         (…).” 
       
       
     
     
       3.7. 
       
         One of the group companies of Cofilux that would be involved in the financing of the acquisition of the Dutch apartments was Ilka. The loan agreement between Ilka as lender and Benelux Wonen as borrower was entered into on 15 February 2017, which agreement was amended by addendum on 18 April 2017 (together the "Loan Agreement"). The Loan Agreement was concluded for a principal loan amount of EUR 2,300,000.00. The term of the Loan Agreement was five years, with an expiry date of 14 February 2022. Furthermore, 
         the parties agreed that Benelux Wonen would pay Ilka: 
       
       
         
           i) a fixed interest of 5% per year, which interest would be due and payable quarterly; 
         
         
           ii) a variable interest equal to 15% “of the net capital gain (after taxes and costs) prorent to the lent amount”, which interest would be due at realisation of the borrower's investment, which realisation would take place after 5 years;  
         
         
           iii) in case of a delayed or failed payment of the interest, and in any case for any amount contractually due: a delay interest that shall accrue on the amount “for the rate of what referred to in 3. increased of 2% (two percent)”; and 
         
         
           iv) all costs, charges and expenses which Ilka may “incur, sustain or be put to after default has been made by the Borrower”. 
         
       
       
     
     
       3.8. 
       The amendment of 18 April 2017 contains the following provisions: 
       
       
         “(…) The parties hereto agreed to modify the variable interest mentionned in article 3 as follows: 
         The variable interest is equal to 30% (thirty percent) of the net capital gain (after taxes and costs) prorent to the lent amount.  
         The variable interest will be reviewed at each banking refinancing event. 
         The Lender will be remunerated according to the following principle for the variable part of the interest. 
         The principle is based upon the LTV [ Court: loan to value ratio ]. When a property of 100 is bought and valued by the bank at 100, the Borrower will receive a 70% loan from the bank. This ratio is then used as the basis for the variable interest being in this scenario 30% of the net capital gain (after taxes and costs). 
         The parameter to indicate the variable is the LTV e.g. if the price of the property has been valued at a higher price than the purchase price, the Borrower will use this advantage to have higher LTV and the variable interest rate will be adapted according to this. 
         For example, the Borrower buys a property at 100 and the bank evaluates this at 120, the Borrower is thus able to have a lower need of equity and is enabled to buy more properties. This will be reflected in the variable interest that will go to the Lender.  
         At the end of the 5 year contract, the average LTV rate will be used to indicate the variable interest rate that will be distributed to the Lender 
         (…).” 
       
       
     
     
       3.9. 
       On 21 February 2017, Ilka provided an amount of EUR 1,250,000.00 to Benelux Wonen under the Loan Agreement and on 3 July 2017 Ilka provided an amount of EUR 750,000.00. Benelux Wonen also received a loan from Warando S.A. ("Warando"), another subsidiary of Cofilux, amounting to EUR 3,000,000.00. The total amount provided jointly by Ilka and Warando therefore amounted to EUR 5,000,000.00. 
       
     
     
       3.10. 
       On 10 April 2017, ABN AMRO Bank N.V. ("ABN AMRO") sent Benelux Wonen an offer for financing for an amount of EUR 1,270,500.00. One of the conditions in ABN AMRO’s loan offer was that Ilka's loan of EUR 2.3 million would be subordinated to ABN AMRO’s loan. Furthermore, the loan offer from ABN AMRO provided that if Benelux Wonen wished to make any payments regarding the Ilka loan - both repayment of the loan itself and any interest payments - Benelux Wonen should obtain ABN AMRO's prior permission to do so. ABN AMRO’s loan offer also provided that the debt service capacity ratio (DSCR) was to be at least 1.1. The offer was subsequently accepted by Benelux Wonen. Accordingly, Ilka, Benelux Wonen and ABN AMRO entered into a subordination agreement on 13 April 2017 (the "Subordination Agreement"), in which the loan granted by Ilka was declared subordinated to the loan granted by ABN AMRO, as follows: 
       
       
         “De Schuldeiser [ Court: Ilka ] en de Kredietnemer [ Court: Benelux Wonen ] verbinden zich bij deze tegenover de Bank en jegens elkaar om zolang de Kredietnemer bij de Bank kredietfaciliteiten geniet of aan de Bank iets schuldig is uit welken hoofde ook, zo in als buiten rekening-courant en al of niet in het gewone bankverkeer, met betrekking tot voormelde vordering van de Schuldeiser op de Kredietnemer geen (rechts)handelingen te verrichten of na te laten waardoor de vordering: 
       
       
         
           i) geheel of gedeeltelijk teniet gaat dan wel geheel of gedeeltelijk het vermogen van de Schuldeiser verlaat; ofwel 
         
         
           ii) met een beperkt recht wordt bezwaard; 
         
       
       tenzij de Bank hiervoor schriftelijk toestemming geeft en met inachtneming van door de Bank alsdan te stellen voorwaarden.” 
       
     
     
       3.11. 
       
         On 4 May 2017, ABN AMRO replied to Benelux Wonen in relation to a request that Benelux Wonen had submitted regarding additional financing by ABN AMRO. According to Benelux Wonen's request, the set-up of this additional financing would be equal to the financing already received, in other words, 70% by way of a bank loan and 30% through other (subordinated) loans. By e-mail dated 4 May 2017, Mr [H] from ABN AMRO replied to [G] as follows: 
         “(…) 
         Zoals nu gestructureerd komt geld vanuit buitenlandse entiteit in Benelux Wonen en moet worden achtergesteld. Betekent dat we met buitenlands recht te maken krijgen en legal opinion iedere keer in het buitenland (per achterstelling) moet worden opgevraagd. 
       
       
       
         Als structuur gewijzigd wordt: 
         Onder benelux wonen een nieuwe werkmaatschappij. Zou dit sterk vereenvoudigd kunnen worden en kosten kunnen besparen. 
         1) Buitenlandse geldverstrekkers lenen aan nieuwe holding 
         2) Holding leent door op basis van NL recht aan werkmaatschappij 
         3) Wij financieren werkmaatschappij en stellen lening holding achter. Hebben dan niks te maken met 
         buitenlandse partijen. 
         (…).” 
       
       
     
     
       3.12. 
       On 6 June 2017, Benelux Wonen obtained an offer for financing from ABN AMRO that, in essence, was a continuation of the loan agreement of 10 April 2017. This new offer pertained to an additional loan of EUR 2,675,000.00. The requirements in this new offer were essentially identical to the offer of 10 April 2017. Benelux Wonen accepted the new offer on 7 June 2017.  
       
     
     
       3.13. 
       On 16 August 2017, Benelux Wonen II B.V. ("Benelux Wonen II") was incorporated by Benelux Wonen as a subsidiary. 
       
     
     
       3.14. 
       
         On 11 January 2018, Benelux Wonen received a third loan offer from ABN AMRO. 
         It concerned a loan offer in the amount of EUR 470,000.00, which Benelux Wonen accepted. Subsequently, further financing was offered by ABN AMRO and accepted by Benelux Wonen. The total loan provided by ABN AMRO amounted to EUR 11,715,000.00. 
       
       
     
     
       3.15. 
       
         By e-mail dated 8 February 2019, [H] from ABN AMRO wrote to [G] as follows: 
         “(…) 
         Ik heb zojuist contact gehad met de kredietafdeling. Men heeft paar zaken geconstateerd die ik over het hoofd heb gezien. 
       
       
       
         1) Lening Ilka is volgens leningsovereenkomst en achterstellingsakte EUR 2.300.000,- groot. In jaarcijfers is dit echter 2.000.000,-. Dit zal gerepareerd moeten worden. 
         2) In laatste kredietovereenkomst is DSCR 1,1 weggevallen (eerdere offertes wel opgenomen). 
       
       
       
         Bank heeft er geen probleem mee dat rente wordt betaald op de achtergestelde lening mits bovenstaande zaken worden gerepareerd. 
         (…).” 
       
       
     
     
       3.16. 
       
         By e-mail dated 14 February 2019, [C] wrote to [G] as follows: 
         “(…) 
         Regarding point 1, there is nothing to be resolved or changed. The loan agreement was indeed signed for 2.3Mio but only 2Mio were transferred to Benelux Wonen, as at the end only 2Mio were needed.  
       
       
       
         Those are the facts and we can't change one or the other. We can't amend the loan agreement as it's part of the subordination agreement, and we can't change the yearly figures as they reflect what [h]as been really transferred.  
       
       
       
         That point was not raised for last year interests payment, so why it is a concern this year? 
         (…).” 
       
       
     
     
       3.17. 
       
         On the same day, [G] responded to [C] as follows: 
         “(…) 
         Last year's interest payments were carried out without permission of ABN-AMRO.  
         When they found out, they said that they would accept it for one time, but not for the future. 
         (…) 
         To carry out the interest payments of 2018 we had a meeting with ABN-AMRO to obtain their permission. 
         They would look into that and came up with remarks, as set out in the email below. 
         As I see it, they require reparation of the discrepancy amounting to Euro 300.000 of the subordinated loan of Ilka AG. 
         (…) I do understand that Ilka AG is not going to pay Euro 300.000 on their loan. 
         Maybe it is a solution not to pay the interest of 2018 and 2019 amounting to Euro 150.000 per year but to add the interest to the loan. 
         (…) 
         In case this is not acceptable to any party or in case no one else comes up with a good solution, I suppose the status quo of not-paying interest unfortunately will remain. 
         (…).” 
       
       
     
     
       3.18.	[ 
       C] on the same day answered [G], stating that [G]’s proposal was not acceptable for Ilka. The matter regarding the DSCR on the other hand was resolved in an amendment agreement between Benelux Wonen and ABN AMRO. 
       
     
     
       3.19. 
       On 14 June 2019, [C] discussed the matter regarding the difference in the loan amount provided and the loan amount included in the Loan Agreement in a conference call with [H] of ABN AMRO. ABN AMRO was not in favour of the solution to amend the Loan Agreement. 
       
     
     
       3.20. 
       On 31 December 2020, Cofilux sold all of its shares in Benelux Wonen to [E], [F] and Ms [I] for a total purchase price of EUR 500,000.00. Therefore, as of 31 December 2020, Cofilux was no longer a shareholder in Benelux Wonen. As a consequence Cofilux resigned as director of Benelux Wonen on that same day. On 28 January 2022, House Delta resigned as director of Benelux Wonen and sold and transferred its shares in Benelux Wonen to Hemo Beheer. 
       
     
     
       3.21. 
       On 31 January 2022, Benelux Wonen repaid Ilka the loan amount of EUR 2,000,000.00 as well as variable interest on that loan in the amount of EUR 148,000.00. Furthermore, Benelux Wonen paid Ilka an amount totalling EUR 480,488.00 in fixed interest over the relevant years. 
       
     
     
       3.22. 
       On 21 February 2022, [C] sent a letter on behalf of Ilka stating that it did not agree with the calculation of the variable interest on the loan. According to Ilka, it was entitled to a variable interest in the amount of EUR 519,208.00. Therefore, an amount of EUR 371,208.00 still had to be paid. Ilka also stated that fixed interest due under the Loan Agreement was still outstanding for an amount of EUR 125,237.77. Furthermore, Ilka stated that the outstanding amount would also have to be increased by 5% plus 2% delay interest, as provided for in Article 7 of the Loan Agreement. 
       
     
     
       3.23. 
       Benelux Wonen replied by letter of 10 March 2022 that Ilka's calculations were incorrect. With regard to the variable interest, Benelux Wonen wrote that Ilka had not deducted certain costs from the gross capital gain, and Ilka had not included all capital loans in its calculations (omitting the loan granted by ABN AMRO). With regard to the fixed interest, Benelux Wonen wrote that it was not allowed to pay the fixed interest as a result of the Subordination Agreement. 
       
     
     
       3.24. 
       On 1 June 2022, Ilka submitted a request for leave to levy prejudgment attachments with the preliminary relief judge in the District Court of Zeeland-West-Brabant, who granted the request on 2 June 2022. 
       
     
     
       3.25. 
       By letter of 28 September 2022, Benelux Wonen wrote to Ilka that it had paid too much variable interest to Ilka because its calculation was not only based on the value of the real estate portfolio of Benelux Wonen, but also on the value of the real estate portfolio of Benelux Wonen II. Therefore, Benelux Wonen demanded that Ilka pay back an amount of EUR 67,804.00 for undue payment. Also, Benelux Wonen demanded payment of an amount of EUR 228,699.00 in damages because of Ilka's default under the Loan Agreement to pay the missing EUR 300,000.00. 
       
       
     
   
   
     
       4 The case in first instance  
     
     
       4.1. 
       Ilka requested, after amendment of claim, the District Court by means of a judgment that insofar as possible is provisionally enforceable, to rule that: 
       
       
         
           Primarily : 
       
       
         
           Benelux Wonen is ordered to pay Ilka an amount of EUR 38,296.25; 
         
         
           Benelux Wonen is ordered to pay Ilka an amount of EUR 378,632.16; 
         
         
           Benelux Wonen is ordered to pay Ilka an amount of EUR 86,941.53; 
         
         
           Benelux Wonen is ordered to pay Ilka an amount of EUR 25,984.56; 
         
       
       all such amounts to be increased by statutory commercial interest as of 15 February 2022; 
       Benelux Wonen is ordered to pay Ilka an amount of EUR 33,229.04 for the costs made by Ilka to enforce compliance of the Loan Agreement by Benelux Wonen, to be increased by statutory commercial interest as of the date of service of the judgment; 
       
         Alternatively : 
       
          Benelux Wonen is ordered to provide Ilka with insight into and a copy of the information listed under paragraph 4.6 of the writ of summons, including the underlying valuation information/reports of the properties of Benelux Wonen and Benelux Wonen II; 
          Benelux Wonen is ordered to pay Ilka a judicially imposed penalty of EUR 5,000.00 per day that Benelux Wonen does not comply with the order under paragraph f; 
          Benelux Wonen is ordered to pay damages suffered by Ilka to be assessed in separate damages assessment proceedings, to be increased by statutory commercial interest as of the date of service of the judgment; 
       
       
         Primarily and alternatively : 
       i. Benelux Wonen is ordered to pay the costs of these proceedings, including all costs of serving judgment, post-salary fees and costs incurred for the prejudgment attachments. 
       
     
     
       4.2. 
       Benelux Wonen filed a counterclaim, requesting the District Court by means of a judgment that insofar as possible is provisionally enforceable, to rule that: 
       
         
           Ilka is ordered to pay Benelux Wonen an amount of EUR 67,804.00 for undue payment, plus statutory commercial interest;  
         
         
           Ilka is ordered to pay Benelux Wonen an amount of EUR 228,699.00 in damages, plus statutory commercial interest; 
         
         
           Ilka is ordered to pay the costs of these proceedings, including all costs of serving judgment and post-salary fees. 
         
       
       
     
     
       4.3. 
       The District Court gave its judgment on 19 April 2023. In the original action, the District Court granted Ilka’s claim under b (pertaining to payment of the variable interest) to an amount of EUR 7,243.06, to be increased with the contractual interest of 5% and penalty interest of 2% as of 15 February 2022. Ilka’s other claims were dismissed. The parties were ordered to each bear their own legal costs, including the costs incurred by Ilka for the prejudgment attachments. In the counterclaim proceedings, all claims of Benelux Wonen were dismissed. Benelux Wonen was ordered to pay Ilka the costs of the proceedings, set at EUR 12,000.00 plus statutory interest pursuant to Article 6:119 DCC. 
       
       
     
   
   
     
       5 The case in appeal 
     
     
       5.1. 
       In appeal, Ilka requests the Court to set aside the judgment and to award its claims in the original action in full, ordering Benelux Wonen to pay the costs of the proceedings in both instances including subsequent costs and statutory interest.  
       
     
     
       5.2. 
       Benelux Wonen argues that Ilka’s claims are to be dismissed and Ilka is ordered to pay the costs of the proceedings including subsequent costs and statutory interest. 
       
       
     
   
   
     
       6 The considerations 
     
     
       
         Jurisdiction and applicable law 
       
     
     
     
       6.1. 
       The District Court based its jurisdiction on the joint designation of the Netherlands Commercial Court in Amsterdam as the forum to hear their case. The Court now has jurisdiction as the NCC Court of Appeal, as stipulated in Article 1.3.3 under (a) of the NCC Rules of Procedure (NCCR). 
       
     
     
       6.2. 
       By virtue of the choice of law in Article 17 of the Loan Agreement, Dutch law is applicable.  
       
       
         
           Scope of the appeal 
         
       
       
     
     
       6.3. 
       The grounds of appeal brought forward by Ilka pertain - in summary - to the following topics: 
       
         ­ fixed interest, including delay interest (grounds 1a, 2a, 2b, 2c); 
         ­ variable interest, including delay interest (grounds 3a, 3b, 3c, 3d); 
         ­ legal fees (ground 4); 
         ­ exhibition order (ground 5). 
       
       
     
     
       6.4. 
       These topics and the relevant arguments put forward by the parties will be considered separately or jointly where appropriate. 
       
     
     
       6.5. 
       Benelux Wonen did not appeal the judgment. Consequently, the counterclaims that were brought by Benelux Wonen and dismissed by the District Court are not subject to this appeal. 
       
       
         
           Fixed interest  
         
       
       
     
     
       6.6. 
       
         It is not in dispute that Ilka received a total of three payments for fixed interest. On 
         18 January 2018 it received an amount of EUR 72,155.00; on 31 December 2021 an amount 
         of EUR 400,000.00; and on 31 January 2022 an amount of EUR 8,333.00. All payments add 
         up to an amount of EUR 480,888.00 in total. This amount is the result of the calculation of 5% interest annually on the principle amount of the loan, i.e. simple interest.  
       
       
     
     
       6.7. 
       Ilka argues that Benelux Wonen was late in making payments for fixed interest from 2018 onwards. According to Ilka, this leads to compounding of interest as it accrues to both the principal amount and the accumulated outstanding interest. Ilka argues that the District Court was wrong in its finding that the Subordination Agreement prohibited Benelux Wonen from making interest payments to Ilka without ABN AMRO’s consent. Even if the payments were timely, compound interest is still applicable as a main rule in the case of business agreements. Ilka calculates the amount in fixed interest still due at EUR 38,296.25. Ilka furthermore claims that the late payments have triggered the delay interest clause of the Loan Agreement, causing Benelux Wonen to be due an additional amount of EUR 86,941.53 in delay interest. 
       
     
     
       6.8. 
       Benelux Wonen contests Ilka’s claim for additional fixed interest, resulting from the application of compound interest, and delay interest. To that effect, Benelux Wonen argues that it was prohibited from making interest payments to Ilka without ABN AMRO’s consent because the Loan Agreement was subordinated as stipulated by the Subordination Agreement to which Ilka was also a party. Benelux Wonen further argues that there are no grounds for application of compound interest.  
       
     
     
       6.9. 
       The Court firstly notes that there are no statutory legal provisions regulating the construct of subordination or its consequences. The implications of the subordination must therefore primarily be determined in accordance with what the parties have agreed. The Subordination Agreement, concluded between ABN AMRO, Benelux Wonen and Ilka, stipulates that Benelux Wonen - as well as Ilka - is prohibited from performing any act that causes Ilka’s claim to be partly or wholly extinguished without ABN AMRO’s written permission. The considerations of the Subordination Agreement refer to Ilka’s claim for the principal amount of EUR 2,300,000.00, which amount is derived from the Loan Agreement. The Subordination Agreement does not explicitly refer to interest payments. The purely linguistic meaning of the provisions is, however, not decisive for the interpretation of the Subordination Agreement. The interpretation of the parties’ rights and obligations depends on the meaning that the parties, in the given circumstances, could reasonably attribute to those provisions and what they could reasonably expect from each other in that respect. This principle also applies to contracts between commercial parties.  
       
     
     
       6.10. 
       In the given circumstances, the Court finds that the Subordination Agreement must be interpreted to provide not only for subordination of Ilka’s claim to the principal amount, but also for subordination of its claim to interest payments. The loan offer explicitly states that loan repayments and interest payments are both subjected to permission of ABN AMRO and thus subordinated. Although Ilka is not a party to the loan agreement between Benelux Wonen and ABN AMRO, Ilka was aware of the term in ABN AMRO’s loan offer underlying the agreement that the subordination included the interest payments. [B], at that time indirectly managing director of Benelux Wonen as well as managing director of Ilka, was included in the e-mail correspondence regarding the first loan between Benelux Wonen and ABN AMRO and received a copy of the loan documents, including the loan offer. Based on these circumstances, viewed together, at the time of entering into the Subordination Agreement, Benelux Wonen could reasonably expect Ilka to have understood the scope of the subordination to be the same as the scope of the subordination condition in the loan offer of ABN AMRO, and Benelux Wonen could reasonably expect Ilka’s intention to be to enable Benelux Wonen to comply with the conditions of ABN AMRO for providing the loan. This means that the interest payments were subordinated as well as the loan repayments. 
       
     
     
       6.11. 
       It is not in dispute that ABN AMRO did not give permission to pay interest to Ilka. In conclusion, Benelux Wonen did not breach its obligations towards Ilka by not making fixed interest payments during the subordination after ABN AMRO withheld its consent, and the payments made afterwards are not considered to be late. Ilka’s claim for payment of the delay interest and of compound interest based on this ground will be dismissed.  
       
     
     
       6.12. 
       Ilka’s argument that compound interest is due, even if the fixed interest payments were timely because applying compound interest is the main rule in the case of business agreements, cannot be followed. Ilka refers to (case law based on) Article 6:119a, paragraph 3, Dutch Civil Code (DCC), which stipulates that after each full year, the amount on which the statutory commercial delay interest is calculated is increased by the interest due for that year. This article, however, pertains to delay interest which is owed as a means of compensation in case of default in payment (in Dutch:  vertragingsrente ). Application of compound interest pursuant to this provision is not a main rule for business agreements, but rather an exception that is laid down by law for the specific circumstances described therein (i.e. delay interest). This exception cannot be relied upon in the current context of the agreed fixed interest, which has the character of a periodic fee for the loan and not of a compensation for delay. As the parties did not agree on compound fixed interest, simple interest is applicable to the fixed interest clause. Ilka’s claim for additional amounts in fixed interest based on this ground will also be rejected.  
       
     
     
       6.13. 
       It follows from the above that grounds of appeal 2a-2c fail. 
       
       
         
           Variable interest  
         
       
       
     
     
       6.14. 
       The Loan Agreement stipulates that the variable interest will be due at realisation, i.e. the sale of the real estate portfolio of Benelux Wonen, which would take place after 5 years and therefore on 14 February 2022. The parties agree that on that date, which is the expiry date of the Loan Agreement, none of the assets in the portfolio had been sold and that the variable interest had to be paid out as if realisation had taken place on that date. 
       
     
     
       6.15. 
       Upon expiry of the Loan Agreement, Benelux Wonen paid to Ilka an amount of EUR 148,000.00 in variable interest. 
       
     
     
       6.16. 
       Ilka argues that this calculation is based on the incorrect assumption that Ilka’s entitlement to variable interest should be determined relative to all the loans obtained, including the loan from ABN AMRO, which according to Ilka comes down to applying a ‘double haircut’. In Ilka’s view, the parties’ intention had always been that the Cofilux entities (Ilka and Warando) together would be entitled to 30% of the net capital gain, reflecting their 30% contribution in the total financing of the acquisition. This 30% is then to be divided between the Cofilux entities in proportion to their mutual contribution. Consequently, only the loans provided by the Cofilux entities should be taken into account when calculating the variable interest to which Ilka is entitled. Using this method, Ilka calculates the total amount of variable interest at EUR 519,208.00, resulting in an outstanding amount of EUR 371,208.00. 
       
     
     
       6.17. 
       Benelux Wonen contests Ilka’s calculation method and maintains that Ilka’s entitlement to variable interest should be based on the full amount lent, including the loan of ABN AMRO. According to Benelux Wonen, this is the only interpretation of the Loan Agreement that makes sense; not only does it follow from its wording, but also from the fact that it was clear from the onset that Benelux Wonen would be financed not only by Cofilux but also partially via a bank loan. In the view of Benelux Wonen, Cofilux’s shareholder position should be taken into account, as the shares in Benelux Wonen and the loans were one package deal. 
       
     
     
       6.18. 
       The dispute between the parties pertains to the provision of the Loan Agreement that the variable interest is equal to 30% of the net capital gain (after taxes and costs) “prorent to the lent amount”. Based on the explanation of the parties, the term “prorent” should be understood as “pro rata” or “in proportion to”. The wording does, however, not specify whether “prorent” refers to the total amount lent by Ilka, Warando and ABN AMRO, or to the amount lent by Ilka and Warando. 
       
     
     
       6.19. 
       Applying the interpretation method referred to in 6.9, the Court considers the following. It is clear from the LOI that Cofilux in addition to shareholder would also be lender. Cofilux then provided loans to Benelux Wonen via its subsidiaries Ilka and Warando. The (amended) loan agreements with Ilka and Warando include an identical variable interest clause pursuant to which they are entitled to a share (30%) of the net capital gain, to be paid out at the end of the term of the loan. In addition to these Cofilux loans, Benelux Wonen was to acquire bank financing in accordance with the LOI. The parties also agreed that the bank financing should in principle account for 70% of the full amount lent. It follows from the text of article 3 of the loan agreements of Ilka and Warando, as amended by the agreements of 18 April 2017, that for the variable part of the interest, the Cofilux entities were to be remunerated according to the  loan-to-value  principle. According to the explanation provided in the amended article 3, the parties envisaged the bank to provide 70% of the financing required for purchasing the apartments, and the Cofilux entities to provide the remaining 30%. Article 3 stipulates that “This ratio is then used as the basis for the variable interest being in this scenario 30% of the net capital gain”, and if Benelux Wonen is able to obtain a higher percentage of bank financing (above 70%) “the variable interest rate will be adapted according to this”. It follows from the wording of article 3, interpreted in the context of the other provisions of the loan agreements of the Cofilux entities and the LOI, that the variable interest was meant to reward the Cofilux entities for their share in the total financing of the activities of Benelux Wonen by entitling the Cofilux entities to a percentage in future capital gains equal to their share in the total financed amount: in principle 30%, but subject to review depending on the actual share of financing by the bank. Since the percentual component of the variable interest is not fixed but subject to review on the basis of the actual share of the Cofilux entities in the total financing, it is consistent with the remuneration principle as intended by the parties that the phrase “prorent to the lent amount” relates to the division of the variable interest between the Cofilux entities only. An interpretation of this phrase to the effect that the finance share of the bank is (again) included in the calculation of the proportionate entitlement of Ilka would contravene the intention of the parties to reward the Cofilux entities proportionate to their share in the total financing. 
       
     
     
       6.20. 
       The parties agree that the share of the Cofilux entities in the total financing was in fact 30% (and the bank 70%). Therefore, the net capital gain is to be divided 30/70 between Ilka and Warando on the one hand and the bank on the other hand, and subsequently 40/60 between Ilka and Warando based on their 40/60 ratio of contribution.  
       
     
     
       6.21. 
       The parties agree in appeal on the amount of the net capital gain. This leads to the following calculation of the variable interest:  
       
       
         Asset valuation         21,837,262.00 
         
           Purchase price        - 15,598,044.00 
         
         Gross capital gain       6,239,218.00 
         Costs                            - 470,245.00 
         
           Taxes (25%)             - 1,442,243.00 
         
         Net capital gain           4,326,730‬.00 
       
       
       
         30%		          1,298,019.00 
         Ilka (40%)                     519,207.60 
         
           Already paid               - 148,000.00 
         
         Amount due                  371,207.60 
       
       
     
     
       6.22. 
       Benelux Wonen will be ordered to pay an amount of EUR 371,207.60 to Ilka, being Ilka’s share of the variable interest due. Ilka’s claim under b will be awarded to this extent.    
       
       
         
           Delay interest 
         
       
       
     
     
       6.23. 
       
         The District Court held that Benelux Wonen must pay 5% plus 2% = 7% interest over the amount of variable interest due as of 15 February 2022. The parties disagree as to whether the delay interest over the amount of variable interest is 7% (Ilka) or 2% (Benelux Wonen).  
         The Court considers that article 7 of the Loan Agreement provides for a delay interest to be due with respect to late payments, which can be late interest payments but also any other amounts contractually due. For all these late payments, article 7 provides for the delay interest to be “the rate” referred to in article 3 increased by 2%. This implies that “the rate” to which article 7 refers is an interest rate of the same kind as the 2% mentioned by article 7. Article 3 mentions only one such rate, which is the 5% interest rate per year. When the text of article 7 was agreed on (before the Loan Agreement was amended), this was also the only rate that article 3 mentioned. The 15% (later 30%) mentioned in article 3 is a percentage used to calculate the principal amount of variable interest, and is therefore of a different kind than the 2% interest rate mentioned in article 7. It follows that article 7 of the Loan Agreement provides for a delay interest of 7% per year over the amount due. Therefore, the delay interest of 7% will be awarded from 15 February 2022.  
       
       
       
         
           Legal costs  
         
       
       
     
     
       6.24. 
       Ilka also claims an amount of EUR 33,299.04 as compensation of the legal costs it incurred, invoking the Loan Agreement. Ilka submitted a number of invoices for legal services, from which it appears that the amount claimed relates to legal costs in the period from October 2021 to December 2022, allocated to Ilka for 40% (and to Warando for 60%). The amount claimed therefore, apparently, relates only to part of the proceedings in first instance. Ilka has not increased its claim in appeal.  
       
     
     
       6.25. 
       Benelux Wonen disputes Ilka’s claim on the basis that the Loan Agreement only provides for compensation if and to the extent that Benelux Wonen is in default and that the costs are insufficiently substantiated. Benelux Wonen also points out that Ilka makes a separate claim for costs for the legal proceedings under (i), essentially claiming legal costs twice. 
       
     
     
       6.26. 
       The Court follows Benelux Wonen’s argument that Ilka cannot be awarded these costs twice. The claim based on the Loan Agreement will therefore be considered to relate to legal costs exceeding the costs that will be awarded in accordance with Article 237 of the Dutch Code of Civil Procedure (DCCP) and Section 10 and Annex III of the NCCR. 
       
     
     
       6.27. 
       The Loan Agreement stipulates that Benelux Wonen is obliged to pay all costs, charges and expenses following a default. The Court established above that Benelux Wonen defaulted in paying the variable interest, which became due on 15 February 2022. This means that only costs that are incurred after this date in relation to this particular default can be taken into account. As Ilka submitted a number of invoices and descriptions that do not specify which costs/invoices pertain to which claim/asserted default and Ilka has not provided an overview of such costs, the Court has to estimate the part of the costs that can reasonably be attributed to the established default. The Court estimates these costs at 50% of the total legal costs claimed by Ilka. In view of these considerations, the amount of legal costs incurred by it in the relevant period does not exceed the amount that will be awarded in accordance with the NCCR, as will be calculated below under the heading ‘costs’. The claim for legal costs based on the Loan Agreement will therefore be dismissed. 
       
       
         
           Alternative claims 
         
       
       
     
     
       6.28. 
       Ilka has brought alternative claims if its arguments pertaining to the variable interest are not successful. These alternative claims aim to get insight into the financial documentation regarding the purchased real estate objects in order to determine the variable interest due by Benelux Wonen, to be assessed later in separate follow-up proceedings. As Ilka’s claim for payment of variable interest will be awarded, it no longer has a legitimate interest in its alternative claims. These claims, under f to h, will be dismissed.  
       
       
         
           Conclusion  
         
       
       
     
     
       6.29. 
       In conclusion, the grounds of appeal brought forward by Ilka partially succeed. Ilka’s claim for payment of the variable interest and delay interest will be granted as stated in the decision. The other claims will be denied. For the sake of clarity, the Court will set aside the judgment in the original action and render a new judgment.  
       
       
         
           Costs 
         
       
       
     
     
       6.30. 
       Benelux Wonen will be ordered to pay the costs of the proceedings in appeal. Pursuant to the NCCR, these costs will be set as follows: 
       
       
         ­ cost of service	EUR       132.42   
         ­ court fee		EUR  24,382.00 
         ­  lawyer’s fees 	EUR  18,000.00  (3 x EUR 6,000.00) 
       
       total			EUR  42,514.42 
       
     
     
       6.31. 
       Benelux Wonen will also be ordered to pay the costs of the proceedings in the original action in first instance, which are set at: 
       
       
         ­ cost of service	EUR       131.18  
         ­ court fee		EUR  18,287.00 
         ­  lawyer’s fees 	EUR  12,000.00  (3 x EUR 4,000.00) 
       
       total			EUR  30,418.18 
       
     
     
       6.32. 
       Ilka also claims compensation for the attachments costs as part of the costs of the proceedings. As Benelux Wonen has not demonstrated that the attachment was void, unnecessary or unlawful, these costs can be awarded pursuant to Article 706 DCCP. The costs amount to EUR 1,258.98, to be paid by Ilka.  
       
     
     
       6.33. 
       The costs following judgment will, as requested by Ilka, be quantified as stated in the decision. The statutory interest claimed over the costs of the proceedings will be awarded as stated in the decision.  
       
       
     
   
   
     
       7 The decision  
     
     
       The NCC Court of Appeal: 
     
     
     
       7.1. 
       sets aside the judgment in the original action of the NCC District Court dated 19 April 2023; 
       
     
     
       7.2. 
       orders Benelux Wonen to pay to Ilka EUR 371,207.60, to be increased by contractual delay interest of 7% per year as of 15 February 2022 until the date of full payment; 
       
     
     
       7.3. 
       orders Benelux Wonen to pay to Ilka EUR 1,258.98, to be increased by statutory interest (pursuant to Article 6:119 DCC), if the order has not been paid within 14 days after this judgment until payment is made in full; 
       
     
     
       7.4. 
       orders Benelux Wonen to pay the costs of these proceedings, set at: 
       
         ­ EUR 30,418.18 in first instance; 
         ­ EUR 42,514.42 in appeal; 
         ­ the costs following judgment of EUR 178.00; 
         ­ if the orders are not complied with within 14 days after this judgment and this judgment is served: plus EUR 92.00 for costs following judgment and the costs of the writ of service; 
         ­ to be increased by statutory interest (pursuant to Article 6:119 DCC), if the costs order has not been paid within 14 days after this judgment or after the post-judgment costs have become due, until payment is made in full; 
       
       
     
     
       7.5. 
       declares this judgment with regard to the orders enforceable notwithstanding any remedy; 
       
     
     
       7.6. 
       dismisses any other claim. 
       
       
       
       
         Done by S.C.H. Molin, P. Glazener and A. Metzelaar, appeal judges, assisted by M.A. Kloppenburg, Clerk of the Court.  
       
       
       
         Issued in public on 24 September 2024.  
       
       
       
         
           APPROVED FOR DISTRIBUTION IN eNCC