In the complex world of corporate law, internal conflicts and disputes within companies can have serious consequences for a company’s continuity and success.
In the complex world of corporate law, internal conflicts and disputes within companies can have serious consequences for a company’s continuity and success.
Internal conflicts and legal disputes within companies can pose a serious threat to the continuity and success of a business. These conflicts—often between shareholders, directors, supervisory board members, or other stakeholders—require a careful approach to prevent escalation and protect the interests of all parties involved. Corporate litigation focuses on resolving such disputes through consultation, strategic planning, and, where necessary, legal proceedings.
An important legal instrument within corporate litigation is the inquiry procedure before the Enterprise Chamber of the Amsterdam Court of Appeal. This specialized judicial body offers an efficient way to break deadlocked situations within a company and to investigate possible mismanagement. In this procedure, it is first examined whether there are well-founded reasons to doubt proper policy within the company. If that is the case, the Enterprise Chamber can appoint an independent investigator to establish the facts. Based on the report, the Enterprise Chamber can take measures, such as the dismissal of directors, the annulment of decisions, or even the dissolution of the company. This makes the inquiry procedure a powerful tool to manage conflicts and create a stable foundation for the future.
With the introduction of the Act Amending the Disputes Settlement Scheme and Clarifying the Admissibility Requirements for the Inquiry Procedure (Wagevoe) as of 1 January 2025, corporate litigation is further modernised. The Wagevoe introduces significant changes. For instance, the disputes settlement procedure will now be handled via an application procedure instead of a summons procedure, which increases efficiency. Additionally, conduct by shareholders in other capacities, for example as directors, may be taken into account in expulsion proceedings. The scope of the exit arrangement is extended to include holders of depositary receipts, including those without meeting rights in private and public limited liability companies (BVs and NVs). Furthermore, the disputes settlement scheme now applies to all non-listed BVs and NVs, while for listed companies new admissibility requirements are introduced in the inquiry procedure. These changes expand the possibilities for shareholders and holders of depositary receipts to protect their position and offer greater clarity in corporate disputes.
One of the most effective aspects of the inquiry procedure is the possibility of imposing immediate relief measures.These are temporary measures that provide swift results, such as the suspension of directors or supervisory board members, the appointment of a temporary director, or the limitation of the powers of certain corporate bodies within the company. These measures serve to prevent further harm to the company and offer stability during the investigation.
Corporate litigation covers a broad range of situations, such as breaches of trust between shareholders, suspected mismanagement including conflicts of interest or fraud, and disputes arising during mergers or acquisitions. It also includes disputes regarding the appointment and dismissal of directors or supervisory board members, and disagreements within joint ventures or partnerships. These conflicts require a strategic and thorough approach that takes into account both legal and commercial interests.
In addition to resolving conflicts, prevention plays an important role. Sound corporate governance, with clear agreements in articles of association, shareholders’ agreements, and internal regulations, can prevent many problems. Applying governance codes and providing training to directors and supervisory board members helps ensure transparency and stability within the company.
For companies with international structures and foreign shareholders, corporate litigation presents additional challenges. Applying the inquiry procedure in an international context requires knowledge of jurisdiction, applicable law, and cultural differences. With experience in cross-border matters, it is possible to act effectively in such complex situations.
Corporate litigation offers powerful legal instruments to manage internal conflicts and resolve business disputes. With the recent changes introduced by the Wagevoe, the available options are further expanded and clarified, contributing to a more efficient and effective approach to disputes. Through a strategic approach and the timely establishment of clear agreements and governance structures, conflicts can not only be addressed efficiently but also prevented.
