Domain names are assets that can be attached

On 16 January 2024, the Brussels Court of First Instance rendered an interesting decision about the right of a creditor to attach the domain names of his debtor and to sell them to the highest bidder.

We all know that the value of domain names can be very high. According to the American domain name and web hosting company GoDaddy, the 25 most expensive domain names publicly reported are valued between USD 5 million and USD 49 million. The most expensive domain name ever sold, Cars.com, had a price tag of USD 872 million, according to SEC files accessed by GoDaddy.

A good domain name is a valuable asset and if the domain name owner cannot pay an outstanding debt, his creditors may attach the domain name and sell it to the highest bidder. This was the outcome of a dispute that was decided recently by the Brussels Court of First Instance.

The domain name holder was a Maltese gambling company that was ordered by the Austrian courts to reimburse an Austrian online poker player for an amount of almost EUR 1.5 million. The Austrian court found that the Maltese gambling company was not entitled to offer online gambling services to Austrian consumers and that it had to refund the money spent by the poker player. The first instance decision was confirmed by the Court of Appeal and by the Austrian Supreme Court. The Maltese gambling company, however, refused to pay, and it was able to protect its assets in Malta against the claim of the online poker player.

The poker player then looked at assets outside Malta and he found the .eu domain names of the gambling company. The .eu domain names are granted by the .eu domain name registry EURid, the non-profit organisation established in Belgium that obtained the right from the European Commission under Regulation (EU) 2019/517 to manage the .eu top-level domain.

A Belgian bailiff attached the .eu domain names, but the gambling company filed an opposition, stating among other things that domain names cannot be attached. The Brussels seizure judge ruled that a domain name is in essence a temporary right to use a name that is granted by the domain name registry to the registrant (the domain name holder). It has a commercial value and can be attached in the hands of the registry via a garnishment in Belgium.

The Maltese gambling company also argued that the recognition of the Austrian judgment should be refused by the Belgian courts, because such recognition would be manifestly contrary to public policy in Belgium (art. 45.1(a) of the Brussels I-bis Regulation (EU) 1215/2012). They stated that the Austrian court decision constitutes a breach of EU law, in particular to the right to offer services in the whole EU. The Brussels seizure judge stressed that, as a general rule, a judgment given in a Member State must be recognised in the other Member States without the requirement for any special procedure (art. 36.1 of the Brussels I-bis Regulation). He stated that there are no reasons why the Austrian court decision would be contrary to the public order. The Austrian courts have ruled that the Austrian gambling legislation complies with EU law and, unless this is manifestly incorrect, the Belgian court must respect this decision.

Seizure Judge at the Dutch-speaking Court of First Instance of Brussels, 16 January 2024, docket number 2023/2044/A

Tom Heremans