15.2.1.4 The friction between Book 2, Section 19(4) and (5) and Book 2, Section 23c(1) of the Dutch Civil Code

When a wrongful turbo-liquidation takes place, a bizarre situation ensues. It is then that both paragraphs 4 and 5 of Book 2, Section 19 of the Dutch Civil Code apply, as a result of which the company has ceased to exist, but continues to exist nonetheless. This is susceptible to intrinsic contradiction and raises an important question for the company’s creditors: do they have to instigate a claim to reopen the windingup proceedings under Book 2, Section 23c(1) of the Dutch Civil Code in order to restore the company and to be able to institute legal proceedings against it or is this not required because the company continues to exist under Book 2, Section 19(5) of the Dutch Civil Code?

Two views of this issue are evident in the jurisprudence and literature. In the first, the provisions laid down in Book 2, Section 19(5) of the Dutch Civil Code prevail over Book 2, Section 23c(1) of the Dutch Civil Code (the doctrine of essentia), with which the drawback of legal uncertainty is associated. In the second, the provisions laid down in Book 2, Section 23c(1) of the Dutch Civil Code prevail over Book 2, Section 19(5) of the Dutch Civil Code (the doctrine of resuscito), whereby the creditors are as it were disadvantaged compared with the board of the company.

In my view the solution to the intrinsic contradiction of Articles 2:19(5) of the Dutch Civil Code and 2:19(4) in conjunction with 2:23c(1) of the Dutch Civil Code can be found in a middle path (the doctrine of solutio), in which a distinction must be made between, on the one hand, the situation in which the board was unaware and could not reasonably have been aware of the asset existing at the time of dissolution and, on the other, the situation in which the board was aware of it or reasonably should have been. In the first situation the doctrine of resuscito will prevail, so that the company is regarded as no longer existing and the only possibility of restoration exists in proceedings under Book 2, Section 23c(1) of the Dutch Civil Code. In the second situation the doctrine of essentia will prevail, so that the company has never ceased to exist. Through this middle path a balance is found between the provision of legal certainty, on the one hand, and the protection of creditors, on the other.