International Law

RIGHT OF INQUIRY TO BE INTRODUCED IN THE DUTCH CARIBBEAN

By Karel.Frielink

The bill grants far-reaching powers to the Common Court

A proposal for amendments to Book 2 of the Civil Code (’BW‘) is pending before the Parliaments of Curacao and Sint Maarten as well as the Dutch Parliament as far as Bonaire, St. Eustatius and Saba are concerned. The proposed amendments will hopefully come into force in 2011. One amendment will be described here briefly.

A right of inquiry (?recht van enquête?) applicable to all legal entities will be introduced in a new Title (Article 2:270-286 BW). In this connection the provisions applicable to the foundation (Article 2:54 et seq. BW) will be adjusted. At the written request of those having the authority to do so the Common Court of Justice can appoint one or more investigators with instructions to investigate the policy of and the course of affairs in legal entities, either comprehensively or with regard to a certain part or during a certain period (Article 2:271 paragraph 1 BW). The Court may determine on request that the investigation also covers the policy of and course of affairs in one or more closely affiliated legal entities provided they are called as interested parties (Article 2:271 paragraph 2 BW). The Court will only award the right to inquiry if there appear to be good reasons to doubt whether a proper policy is being conducted (Article 2:274 paragraph 1 BW). It is not possible to appeal but appeal in cassation is possible.

One or more shareholders of the NV or BV representing alone or jointly one/tenth of the equity capital are entitled to submit the request or at least one/tenth of the shareholders who can cast a vote with regard to all subject matters. It is not apparent from the Explanatory Memorandum whether it has been considered, as I would like to advocate, to grant this authority to any interested person with regard to government owned companies.

In an association, cooperation or mutual insurance association as many members will be entitled to do this if they form at least one tenth of the membership figure. In a foundation any interested party is authorized to do this. However, if a foundation or association is involved which never owned an enterprise within the sense of the Trade Register Decree within a period of three years prior to the submission of the request, the Public Prosecutor and the trustee in bankruptcy will have the exclusive authority to do so as well as those to whom this authority was given in the Articles or in an agreement with the legal entity (Article 2:272 paragraph 1 BW).

The Court may at any stage of an action give a preliminary injunction including suspension of the effect of a resolution by a body of the legal entity or an order to withdraw an order in full or in part, to suspend the execution of it in whole or in part or to undo in whole or in part the consequences of it, suspension of one or more Managing Directors or Supervisory Directors or temporary appointment of one or more Managing Directors or Supervisory Directors (Article 2:276 BW).

If in the opinion of the Court it appears from the report that mismanagement has taken place, the Court can make one or more provisions if this has been requested and if the Court itself also considers it required in the light of the outcome of the investigation (Article 2:282 paragraph 3 BW). For instance the annulment of a resolution by a legal entity of which the provisional execution cannot be ordered anyway (Article 2:285 BW) or the dissolution or splitting of a legal entity (Article 2:283 BW) comes to mind.

The proposed amendments take into account the wishes and comments of the users of the current Book 2 BW and are therefore welcomed.

Karel Frielink
Attorney (Lawyer) / Partner

(27 October 2010)

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Full post as published by Karel's Legal Blog on October 27, 2010 (boomark / email).