2.5 Conclusion

Case law of the European Court of Human Rights shows that Art. 1 First Protocol ECHR affords protection to property rights on shares in private limited companies, protection to the economie value represented by the shares and protection to the rights attached to the shares. Protection is not only afforded in the situation of literal deprivation of property rights, such as expulsion of a shareholder, but also in the situation of factual deprivation of property rights, for instance by means of dilution of the shares and through tunnelling. Whether interference with shareholders rights is allowed depends on the legitimacy, objective and proportionality of the interference. A relevant factor with respect to the proportionality is the amount of compensation granted to the affected owner.

Citizens can only invoke Art. 1 First Protocol ECHR against Member States. This provision cannot be invoked against other citizens. In principle, states that have subscribed to the First Protocol ECHR have the positive obligation to ondertake certain measures necessary to protect the right of property. The European Court of Human Rights can order Member States that do not provide an appropriate level of protection to provide for financial compensation of the affected citizen.

Art. 1 First Protocol ECHR does not explain how the protection of the shareholders' rights must be organized, but allows Member States a certain margin of appreciation. The introduction of exit rights, in connection with a right to compensation at market value, can be an appropriate means to protect the property right on shares of minority shareholders. However, while minority shareholders can also be protected in other ways than by way of exit rights, Art. 1 First Protocol ECHR does not necessarily impose an obligation on Member States to introduce exit rights.

From the perspective of Art. 6 ECHR, compulsory arbitration is only possible if all requirements stemming from the right to a für trial are met. Under Dutch law, independent experts appointed by the court determine the financial compensation to be paid when appraisal rights are used. The determination of the financial compensation can be regarded as an example of the determination of civil rights as referred to in Art. 6 ECHR. It is highly questionable whether the determination by independent experts meets the requirements of Art. 6 ECHR. It is recommended to assign a civil court to determine the financial compensation in the event that appraisal rights are used.

Art. 6 ECHR also has implications for the inquiry proceedings and for proceedings for the settlement of disputes. In the situation where a winding-up order is given by the court onder the inquiry proceedings, all parties involved, such as the shareholders and the company itself, have the right to a für trial. This right involves the right to be heard, to comment, and to object on the application of the order and the right to receive a well-reasoned judgment.

Art. 6 ECHR also entails that proceedings are dealt with in a timely manner. When giving shape to the exit proceedings this requirement must be taken into regard, whereas the exit proceedings, at least the former exit proceedings, are notorious for being time-consuming. Art. 6 ECHR does not compel the legislator to stick to exit proceedings with two instances (first instance and appeal). From the perspective of Art. 6 ECHR, the exit proceedings can be given shape in one instance, provided that all requirement of Art. 6 ECHR are met.

The Winter Committee report states that an appraisal right forms a für counterpart to the right of the majority shareholder to squeeze out small minority shareholders. The reciprocity of the squeeze-out right and the sellout right is also found in the Thirteenth Company Law Directive. Similar arguments are found in the recent history of the Second Company Law Directive, although the introduction of these rights was not included in the final version of this directive. An EU-wide consultation revealed that a small majority of respondents do not favour the introduction of a general squeeze-out right and appraisal right at the EU level.

The proposal on the European private limited company states that the right of withdrawal of members of an SPE should be governed by national law. The introduction of a limited list of situations in which shareholders are allowed to exit the company is not the most desirable solution. With respect to the SPE, it is recommended to introduce exit proceedings with an open standard. A limited winding-up remedy and a set of appraisal rights may complete a system of exit rights.