4.6.3 Enterprise Chamber procedure:• right of inquiry

The right of investigation into the dealings of corporations was introduced into Dutch law in 1928, following the example of the UK Companies Act of 1862. In 1971 the specialised Enterprise Chamber was set up. This is a division of the Amsterdam Court of Appeal and consists of judges specialised in this field. There were a few lengthy proceedings between 1971 and 1994. Since 1994 shareholders, trade unions and the public prosecutor may request an order for an investigation and at the same time seek an immediate temporary injunction, such as a blocking decision or agreement and the appointment or dismissal of directors. There is a right of appeal to the Supreme Court.1 The procedure is described in articles 2:345 to 359 DCC.

One of the first major cases was the OGEM case,2 which was decided in 1990. It described the aims of the right of investigation:

The procedure in Enterprise Chamber proceedings takes place in two steps. First, someone — usually a shareholder — wares the company of mismanagement in a letter to the management board and, in the absence of a satisfactory response, applies to the Enterprise Chamber for a ruling on whether there are "good reasons to doubt that the company is being properly managed" (gegronde redenen om aan het juiste beleid te twijfelen).3 Often, an order for a temporary injunction is requested at the same time. The second step, after an investigation has been made by experienced businessmen, accountants or lawyers appointed by the Enterprise Chamber, is for the original applicant to ask the court to determine whether there has been mismanagement (wanbeleid)4 and to issue final injunctions. The threshold for mismanagement is a breach of "elementary principles of reasonable entrepreneurship" (elementaire beginselen van verantwoord ondernemerschap).5 These terms are broad enough to give management and supervisory board members a certain amount of discretion. This comes close to the "business judgment rule", except that in some cases (e.g. HBG,6 ABN AMRO7 and ASM/8) it could be said that the Enterprise Chamber has possibly broadened its remit to include correcting the business judgment of the board. However, in each of these cases the Supreme Court reversed the Enterprise Chamber decision.

It is important to note that the Enterprise Chamber does not deal with liability of directors for which the claimant has to approach the regular District Courts. The Enterprise Chamber sometimes seems to apply a higher standard for good management than the ordinary courts do in liability cases. Owing to the media coverage of the cases mentioned above, the standard of behaviour expected of directors has risen, notwithstanding the final judgments of the Supreme Court. When the Enterprise Chamber declares mismanagement by the company, its decisions usually apply to all board members and no distinction is made between the management board and the supervisory board. In most Enterprise Chamber cases, whether an outside director is supervisory board member in a two-tier system or a non-executive director in a one-tier system is unlikely to make much of a difference. Although the standards of conduct for supervisory board members are different, they too are always subject to investigation.