On June 4, the Dutch Senate adopted a bill that introduces significant changes to corporate law: the Law on Dispute Resolution Adjustment and Clarification of Admissibility Requirements for Inquiry Procedures, also known as Wagevoe. This law amends Book 2 of the Dutch Civil Code and aims to improve the effectiveness of the dispute resolution mechanism and clarify the admissibility requirements for inquiry procedures. The Minister decided on June 14 that this law will come into effect on January 1, 2025.
Dispute resolution: an overview
The Dutch statutory dispute resolution mechanism has existed since 1989 and offers a structured way to resolve disputes between shareholders. This mechanism includes four different procedures for situations where shareholders cannot resolve a dispute amicably:
Expulsion procedure: A shareholder can be forced to sell their shares.
Procedure for the transfer of voting rights: The voting rights of a shareholder can be transferred.
Withdrawal procedure: A shareholder can sell their shares to the other shareholders or the company.
Petition procedure for price determination: The court can be asked to determine the price of a share.
Changes in the dispute resolution mechanism
With the new law, all these procedures will be converted into petition procedures, conducted in a single instance at the Enterprise Chamber. This replaces the previous summons procedures at the district court. The main changes are:
Acceleration of procedures: By transitioning to petition procedures at the Enterprise Chamber, it is expected that disputes will be resolved more quickly.
Expansion of scope: The procedures now also apply to certificate holders whose position is comparable to that of shareholders. Additionally, the scope is expanded from all private limited companies (bv’s) and non-publicly traded public limited companies (nv’s) to all bv’s and nv’s, except publicly traded companies.
These changes are intended to improve the effectiveness of the dispute resolution mechanism and provide a broader range of shareholders and certificate holders access to these procedures.
Temporary suspension of dispute filings
In the run-up to the new law taking effect on January 1, 2025, no new shareholder disputes are expected to be filed in the coming six months. Disputes can be handled in a more efficient manner at the Enterprise Chamber from January 1, in line with the new legislation.
Inquiry procedure: clarification of admissibility requirements
The inquiry procedure offers capital providers of companies the opportunity to ask the Enterprise Chamber to investigate the policy and conduct of a company. This can result in the Enterprise Chamber intervening with the aim of restoring healthy relations within a company.
New access criteria for publicly traded companies
An important change introduced by Wagevoe is the clarification of the conditions for access to the inquiry procedure, specifically for capital providers of publicly traded companies. Previously, capital providers had to meet certain capital requirements to request an investigation. The new law introduces separate access criteria for publicly traded companies, ensuring that the right of inquiry remains accessible to capital providers in these companies.
Conclusion
The Law on Dispute Resolution Adjustment and Clarification of Admissibility Requirements for Inquiry Procedures (Wagevoe) brings important improvements and clarifications to Dutch corporate law. By speeding up procedures and expanding the scope, it is expected that disputes between shareholders and certificate holders can be resolved more effectively. Additionally, the new access criteria for the inquiry procedure ensure that capital providers of publicly traded companies have better access to legal means to address misconduct within a company. With the entry into force of this law on January 1, 2025, no new shareholder disputes are expected to be filed in the coming six months, as from that date disputes can be handled in a more efficient manner at the Enterprise Chamber.
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