Exit rights of minority shareholders in a private limited company (IVOR nr. 72) 2010/2.2.3.1:2.2.3.1 Introduction

Exit rights of minority shareholders in a private limited company (IVOR nr. 72) 2010/2.2.3.1

2.2.3.1 Introduction

Deze functie is alleen te gebruiken als je bent ingelogd.Deze functie is alleen te gebruiken als je bent ingelogd.Deze functie is alleen te gebruiken als je bent ingelogd.

The second provision relevant to this study on statutory exit rights is Art. 6 ECHR. This provision embodies the right to a für trial. Article 6 paragraph 1 first sentence ECHR stipulates:

In the determination of his civil rights and obligations or of any criminal charge against him, everyone is entitled to a für and public hearing within a reasonable time by an independent and impartial tribunal established by law.

Judgment shall be pronounced publicly but the press and public may be excluded from all or part of the trial in the interests of morals, public order or national security in a democratic society, where the interests of juveniles or the protection of the private life of the parties so require, or to the extent strictly necessary in the opinion of the court in special circumstances where publicity would prejudice the interests of justice.

Art. 6 ECHR has interaal effect within Dutch law. This article has a generally binding character and can be directly invoked by civilians against Member States, as has been established in Dutch case law.1

Similar to other elements of Art. 6 ECHR, the phrase civil rights and obligations in Art. 6 ECHR is interpreted autonomously and extensively.2Civil rights and obligations include, inter alia, the existing rights and obligations under the national laws of individual Member States. These rights and obligations must have a civil character in order to fall within the scope of Art. 6 ECHR. For instance, this section clearly regards actions in tort and contract.3 The European Court of Human Rights repeatedly decided that the property right as referred to in Art. 1 First Protocol ECHR also qualifies as a civil right within the meaning of Art. 6 ECHR.4 In the case of Lithgow and Others, the European Court of Human Rights decided that the determination of the right for compensation for the loss of shares in a company considers the determination of a civil right:

"The Court notes in the first place that the applicants' right to compensation under the 1977 Act, derived from their ownership of shares in the companies concerned, is without doubt a "civil right" (...)."5

In the case in question, the shares were expropriated under statute, in order to realize nationalization of the company. In the case of Trippel, the court held that the determination of the right to own and sell shares represents the determination of a civil right as referred to in Art. 6 ECHR.6

The provision requires for its application, as cited in the French version of Art. 6 ECHR, acontestation sur (des) droits et obligations de caractère civil. Therefore, in order for Art. 6 ECHR to apply, there must be a certain dispute about the determination of a civil right. The requirement of the presence of a dispute is interpreted liberally by the European Court of Human Rights. In its Benthem judgment the court considered, amongst others:

"The `contestation' (dispute) may relate not only to 'the actual existence of a (...) right' but also to its scope or the manner in which it may be exercised (...) It may concern both questions of fact and questions of law."7

Accordingly, the determination of the right to shares as well as the determination of the right to receive compensation for the loss of shares falls within the scope of Art. 6 ECHR. The view that the determination of compensation for the loss of shares signifies the determination of a civil right is of particular relevance to this study on exit rights. Art. 6 ECHR has an impact on the way exit rights must be implemented into national law, as an exit right requires the determination of the compensation offered to the exiting shareholder. It is worth noting that the determination of the compensation affects both the person obliged to provide the compensation and the person entitled to the compensation, so both parties are entitled to invoke Art. 6 ECHR.

Deze functie is alleen te gebruiken als je bent ingelogd.