This article discusses the unprecedented Supreme Court judgment rendered on 17 July 2020 that answers the question whether an act of interruption of a limitation period against a general partnership also constitutes the interruption of a limitation period towards its individual partners.
In a recent ruling dated 17 July 2020, the Supreme Court rendered an unprecedented judgment on the application of the statute of limitation on claims against a Dutch general partnership (“vennootschap onder firma” or “VOF“) and its individual partners. In these proceedings, the claimant asserted a liability claim against a former partner of an insurance advisor, exploited through a Dutch VOF, to recover all damages incurred due to incorrect insurance advice. Prior to said proceedings, the claimant had also held the VOF liableby operation of a liability claim notice only sent to the (management of the) VOF in 2008. At that time, the claimant did not send individual notifications to each partner of the VOF. In 2013, one of the former partners was also held personally liable for the damages suffered.
Both the District Court and the Court of Appeal rejected the claim based on the reasoning that it was time-barred. Both courts essentially reasoned that claims against the VOF and its partners personally are each separate claims, which are individually time-barred and should have required individual notices of interruption. Since the notification in 2008 was not specifically directed to the individual partners, the liability claim vis-à-vis the partners personally was time-barred, according to the Court of Appeal. The claimant successfully challenged that judgment before the Supreme Court. The Supreme Court decided that a claim notice sent to the VOF, also interrupts the limitation period for legal actions against its individual partners.
Background: Limitation periods and the notification of interruption
The ground rule on the statute of limitation entails that a claim is time-barred on the expiration of five years from the beginning of the day following the day on which the prejudiced person becomes aware of both (i) the damage, and (ii) the identity of the person who caused the damage. The claim is in any event time-barred, on the expiration of twenty years following the event that caused the damages. This five year limitation period may be interrupted if a party initiates litigation with regard to its claim or by a written notice of interruption in which the claimant unequivocally reserves its rights and shall commence thereafter for the same period. This notice should in essence make clear to the debtor that, for example, a claim may still be brought. In determining whether a written notice can be construed as such, settled case law shows that it is essential not only to take account of the notice’s text (i.e., a linguistic interpretation) but also of the context and other relevant circumstances of the case.
Background: Liability of the general partnership and its partners
A general partnership, such as the VOF, may be formed by two or more partners that are either private individuals or legal entities. A general partnership is not a legal entity, implying that the individual partners are jointly and severally liable for all obligations of the partnership to the extent that the general partnership fails to meet its obligations, even if those obligations resulted from legal acts of another partner. Settled case law shows that, for example, a creditor of a VOF may bring a claim both against the VOF and its’ partners individually. This implies that the creditor has two rights of action: one against the VOF, which is enforceable against the separate assets of the VOF, and one against the partners personally, which is enforceable against the private assets of the partners. For each of these actions, it must be ascertained separately whether the claim is time-barred or whether the limitation period was interrupted timely.
The Supreme Court Judgement: Accumulated claims against the general partnership and its partners according to the Dutch Supreme Court
The basis of the Supreme Court’s reasoning is that a creditor of a VOF may bring a claim both against the VOF and against each partner individually. Thus, a creditor has two separate rights of action; (i) one against the joint partners (recoverable from the separate assets of the VOF), and (ii) one against each of the partners personally (recoverable from the partners’ private assets). Each of these claims may be individually time-barred. The Supreme Court now ruled that a notification vis-à-vis the VOF also deems to address its partners and in principle should be interpreted as being intended to constitute an interruption notification for claims against the individual partners. The individual partners should treat a notice of interruption addressed to and received by the VOF in such a way that it also covers claims against each of them personally, unless exceptional circumstances apply (e.g., when the notification is explicitly limited to certain partners). On the basis of this reasoning, the Supreme Court concludes that the liability claim against the individual partner is not time-barred and it overturns the Court of Appeal.
In principle, a notice of interruption sent to the VOF is sufficient to interrupt the limitation period of a claim against both the VOF and the individual partners. The notice does not have to be directed expressly to each of the individual partners. Nevertheless, to avoid discussions on, for example, the interpretation of the notice of interruption, it is advisable to specifically direct the notice not only to the VOF but also to its partners individually. On the contrary, the general partners of a VOF should carefully review any claim notification generally directed to the VOF and, in the case of multiple partners, inform each other immediately.
 Albeit with some limited exceptions to this rule.
 One of the key differences with the Dutch limited liability partnership for instance is that, save for exceptional situations (e.g., director’s liability), creditors can only hold the limited liability partnership liable for its obligations and debts.