Netherlands Supreme Court Clarifies Rules on Setting Off Time-barred Claims Against Debts

On January 23, 2026, the Netherlands' Supreme Court clarified when a debtor is able to set-off a time-barred claim against its debts. The case arose from a dispute between a claim foundation and an energy supplier providing district heating in the city of Tilburg. The foundation, which represented customers in Tilburg, initiated a collective action under the old article 3:305a of the Dutch Civil Code.

Beginning in 2012, the supplier's invoices began itemising a separate "connection contribution." In 2017, the foundation initiated a collective action, arguing there was no legal basis for charging residents connected before January 1, 2014. The energy supplier countered that these claims were time-barred and could not be set-off against the customers' payment obligations. The Court of Appeal rejected the supplier's defence, but the Supreme Court overturned that judgment, ruling that a time-barred claim cannot be set-off against a counterclaim that arose after the original claim had already become time-barred.

Dutch legal framework on the set-off of time-barred claims

Based on article 6:127 (2) of the Dutch Civil Code, a debtor has the right to set-off if he has a claim that corresponds to his debt to the same counterparty and is entitled both to pay and enforce payment of the claim. In principle, this means a debtor is not entitled to set-off his claim against a debt when his claim is time-barred because the debtor cannot enforce payment of a claim. After the limitation period has expired, a 'natural obligation' remains (i.e. an obligation that is not legally enforceable based on article 6:3 (1) of the Dutch Civil Code). Therefore, the debtor may not set-off a claim arising from a natural obligation, which is, in the case at hand, a time-barred claim by the customers represented by the claim foundation against the energy supplier with the energy supplier's claim against the customers for payment for the heat supplied. The set-off requires a "set-off declaration” (article 6:127 (1) Dutch Civil Code).

Article 6:131 (1) of the Dutch Civil Code stipulates, however, that the right to set-off does not lapse due to the expiry of the limitation period for legal action. The claim foundation claimed that time-barred customer claims could be set-off against debts owed by the customers to the energy supplier even if the debts arose after the moment the customer claims became time-barred.

Ruling of the Supreme Court

The Supreme Court ruled that the rationale behind article 6:131 (1) Dutch Civil Code is that the person who is entitled to set-off will often consider himself discharged and will only consider making the set-off declaration referred to in article 6:127(1) of the Dutch Civil Code when the creditor demands performance of the obligation. The provision allows an existing right of set-off to continue to exist after the claim to be set-off has become time-barred. This, however, does not create a right to set-off an already time-barred claim against a debt that arose after the expiry of the limitation period. In the latter case, the requirement set out in article 6:127 (2) of the Dutch Civil Code applies in full –that the person who wishes to invoke set-off is entitled to enforce payment of the claim which he wants to set-off against the debt.

Conclusion and key takeaway

This ruling provides clarity for parties involved in set-off situations. A right to set-off can survive a limitation period, but only if the conditions for set-off were met before the claim became time-barred. This case underscores the importance of proactively managing claims, debts, and risks in legal relationships.

For businesses in the Netherlands navigating complex disputes or facing a potential dispute, feel free to contact these CMS experts: Aukje Haan, Akin Aslan.