5.1 Introduction

The Dutch winding-up remedy has not been shaped into separate legal proceedings. The winding-up remedy is one of the final remedies (definitieve voorzieningen) that can be ordered under the inquiry proceedings (enquêterecht). The inquiry proceedings are found in Artt. 2:344-359 DCC. The inquiry proceedings are of major importance in Dutch company law and are used frequently. The inquiry proceedings can be described as the right of shareholders and trade unions to request the Enterprise Chamber of the Court of Appeal of Amsterdam (in Dutch: Ondernemingskamer, hereafter abbreviated as OK) to order an inquiry into the policy and the course of business of a legal entity executed by an investigator. Additionally, the inquiry proceedings hand the OK the opportunity to intervene within the legal entity by way of immediate and final remedies.1

In short, the inquiry proceedings consist of two stages, or, more precisely, the inquiry proceedings consist of two proceedings. The period starting with the petition for application of the inquiry proceedings up to and including the inquiry itself is indicated as the first stage. In the first stage, the OK may intervene by way of immediate remedies (onmiddellijke voorzieningen). The first stage ends with the deposition of the inquiry report with the registry (griffie) of the High Court of Amsterdam. After the first stage, a second stage may follow. In the second stage, a petition can be started in order to request the OK to conclude mismanagement on the basis of the inquiry report and to request the OK for final remedies.2

As considered by the Dutch Supreme Court in its landmark judgment in the Ogem case, the objectives of the inquiry proceedings are:

The winding-up remedy plays a role in relation to the objective mentioned under (a), although it will not lead to improved and restored relationships within the legal entity concerned. Moreover, the threat of application of the winding-up order aligns with the objective mentioned at (d). As appears from the objectives, the inquiry proceedings principally focus on the protection of the interest of the company. In this respect, the proceedings differ from the discerned exit proceedings in this study, because exit proceedings principally focus on the protection of the interests of minority shareholders. In this respect, the winding-up remedy better fits in with exit proceedings whereas eventually a winding-up will be in the interests of the shareholders and not in the interest of the company involved.

For the object of this research, it would go too far to deal with the subject of the inquiry proceedings entirely.4 In this chapter, the focus is on a specific remedy, included in the inquiry proceedings, concerning the order for winding-up of the legal entity, and in particular of its application with respect to BVs. This winding-up order is one of the final remedies the OK may provide for after closure of the inquiry and provided that mismanagement has been established on the report of the investigator. The order itself is contained in Art. 2:356 sub f DCC, which provision forms part of the regulation on the inquiry proceedings. At the outset, it is worth mentioning that under the inquiry proceedings the OK is not entitled to issue an order for the transfer of the shares.

Before starting to further investigate the winding-up remedy, it is worth noting how in a regular way shareholders can achieve dissolution of the company. As follows from Art. 2:19 paragraph 1 sub a DCC, dissolution requires a resolution of the general meeting of the BV concerned. In principle, such resolution can be adopted by an ordinary majority of votes cast. The articles of association may require a higher threshold for such a resolution.5 Therefore, a minority shareholder will not be able to initiate dissolution of a BV. As a majority shareholder usually is able to reach the threshold required for a shareholders resolution for dissolution, it is hard to imagine that a majority shareholder requests the OK for a winding-up order onder the inquiry proceedings. Consequently, the winding-up remedy is typically a remedy for minority shareholders and shareholders of a 50%-50% joint-venture.

The history of the winding-up remedy is outlined in § 5.2. In this paragraph, two developments are explored. The first of these is the effort of the legislator to introduce a winding-up remedy outside of the inquiry proceedings. A further development concerns the introduction of a winding-up remedy within the inquiry proceedings. The empirical report of Cools and Kroeze is discussed in § 5.3. This interesting empirical report reveals how the inquiry proceedings work in practice. In § 5.4, the procedural rules of the inquiry proceedings are concisely described especially with respect to the order to wind up the company. The scope of the winding-up remedy is the topic of § 5.5. How shareholders' disputes are often settled amicably by using the inquiry proceedings, instead of using the proceedings for the settlement of disputes, is elaborated in § 5.6. In § 5.7, attention is paid to the debate about the introduction of the order for legal demerger (splitsing) of the company, as one of the available orders in the inquiry proceedings. This demerger order forms an attractive alternative for dissolution of the company, though has not been introduced yet. In § 5.8, the conclusion of this chapter is found.