Right of Inquiry Enterprise Chamber
Written by:
Jack Leeman
The inquiry procedure at the Netherlands Enterprise Chamber
Dutch law has a special procedure for resolving disputes within companies. The right of inquiry entitles shareholders, holders of depository receipts, works councils and trade unions to request the Enterprise Chamber of the Amsterdam Court of Appeal to investigate the affairs of the company. This inquiry procedure focuses on restoring stakeholders'relations within companies. Starting an inquiry procedure at the Enterprise Chamber can help resolve conflict situations within the company or break deadlocks.
The Inquiry Procedure
The Inquiry Procedure owes its name to the fact that it focuses on an investigation, the inquiry. Inquiry procedures are conducted before the Enterprise Chamber, a special chamber of the Amsterdam Court of Appeal with national jurisdiction. The Enterprise Chamber has more than 30 tasks spread over various Netherlands laws, but the vast majority of cases are dealt with in the context of the right of inquiry (Article 2: 344 and following Dutch Civil Code).
Two phases
The inquiry procedure consists of two phases. The first phase that provides for the possibility of requesting an investigation. If the request is granted and the investigation shows that there is maladministration, the Enterprise Chamber can be requested to make provisions in the second phase.
The first phase of the Inquiry Procedure
A request for an investigation into the policy and the course of affairs within a legal person can be made by certain interested parties designated by law. Authorized to request an investigation into a B.V. or N.V., for example, are the shareholders if they jointly represent 10% or more of the shares. Certificate holders, the board and the Company itself can also request an Inquiry Procedure.
A shareholder of a B.V. who makes a request must have made his objections to the policy or the course of affairs known in writing to the management board and the supervisory board. The objections should concern the question whether there are good reasons to doubt the right policy. The shareholder who believes that this is the case must therefore make his objections known in writing and the shareholder must observe a reasonable period in which the company can still meet its obligations.
If that yields insufficient results, the road to the Enterprise Chamber is open. The test is then also the same. The Enterprise Chamber orders an investigation if there are valid reasons to doubt the right policy. An important extra is that the Enterprise Section can take immediate measures for the duration of the proceedings. Asking for a provisional provision makes it possible to quickly get out of a deadlock.
Examples of provisional provisions are the suspension of directors and the temporary withdrawal of voting rights from certain shareholders.
If the Enterprise Section orders an investigation, an investigator is appointed who will conduct the investigation. The costs of the investigation are generally for the legal person. The researcher issues a report and the first phase of the inquiry procedure ends.
The second phase of the Inquiry procedure
If the applicant or other parties involved with the right of inquiry find that the report shows maladministration, they can file a request at the Enterprise Chamber within two months after the report has been filed. In addition, the Enterprise Chamber can also take a number of (far-reaching) measures, such as cancellation of a decision, dismissal of a director, or dissolution of the company. In addition, mismanagement can of course also entail liability. In short, the inquiry procedure can be a powerful means of correcting situations that need to be corrected.
Consult us today
Do you want to know more about breaking a deadlock within a company? We at Minerva Advocaten think in solutions. Ask us today without obligation what we can do for you in your case. We are happy to help you. Our motto is not for nothing: "Your problem, our concern."
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