WILLEMSTAD – The Dutch Supreme Court (Hoge Raad) has overturned a ruling that allowed First Curaçao International Bank (FCIB) to withhold 15% of customer balances from account holders who did not cooperate with the settlement of their funds. The Supreme Court found that the Joint Court of Justice had not adequately justified whether all withheld costs were reasonable. As a result, the case has been sent back to the court in Willemstad for reassessment.
Legal Dispute Over Bank Fees
The case involves FCIB customers, including several foreign trust companies, who objected to the high fees imposed by the bank when distributing funds after its banking license was revoked in 2006 due to its involvement in a major VAT fraud case. Since then, the Central Bank of Curaçao and Sint Maarten has been responsible for FCIB’s administration and settlement.
The dispute centers on two key measures taken by FCIB:
Raising monthly account maintenance fees from $50 to $250
Withholding 15% of customer balances as a fee for non-cooperation in a required verification process
The Supreme Court ruled that the Joint Court of Justice failed to properly distinguish between reasonable settlement costs and other expenses, such as legal fees, personnel costs, and charges from FCIB’s affiliated companies. Trust companies, led by Corbiere Trust Company, argued that FCIB had passed on costs related to its own legal cases to its customers.
Dispute Over Interest Payments
Additionally, the Dutch Supreme Court found that the Joint Court had not sufficiently justified why FCIB was not obligated to pay interest on balances after December 2006. The court had ruled that FCIB could no longer generate interest after its license was revoked. However, Corbiere Trust Company pointed out that the bank continued to earn income from loans, interest payments, and other financial activities after that period.
Communication Issues
Another key issue was FCIB’s method of informing customers. The Dutch Supreme Court ruled that the Joint Court did not adequately support its conclusion that FCIB had properly notified customers by only posting updates on its website. Many account holders may have missed critical information due to limited use of the website during that time.
The case will now return to the Joint Court of Justice in Willemstad for a new assessment regarding the withheld funds and FCIB’s interest obligations.