Exit rights of minority shareholders in a private limited company (IVOR nr. 72) 2010/2.2.3.5:2.2.3.5 Art. 6 ECHR and the exit proceedings

Exit rights of minority shareholders in a private limited company (IVOR nr. 72) 2010/2.2.3.5

2.2.3.5 Art. 6 ECHR and the exit proceedings

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Another requirement that can be derived from Art. 6 ECHR is the right to receive a judgment within a reasonable time. Whether the reasonable time requirement is met is examined by the court by taking into consideration: (a) the complexity of the case, (b) the conduct of the parties involved, (c) the conduct of the relevant authorities, and (d) the interests of the parties involved.1

The requirement to receive a judgment within reasonable time is expressly contained in Art. 6 ECHR. Inter alia, this requirement implies that the legislator must organize proceedings in such a way that judgments can be obtained within a reasonable amount of time. If specific proceedings do not offer the possibility of receiving judgment within reasonable time, it is up to the legislator to take measures. In the case of Scordino, the court observed:

"The Court (...) has stated on many occasions that Article 6 § 1 imposes on the Contracting States the duty to organise their judicial systems in such a way that their courts can meet each of its requirements, including the obligation to hear cases within a reasonable time (...). Where the judicial system is deficient in this respect, a remedy designed to expedite the proceedings in order to prevent them from becoming excessively lengthy is the most effective solution."2

The reasonable time requirement is of specific importance with respect to the Dutch exit proceedings. The exit proceedings, at least the former exit proceedings, are notorious for their length of time.3 In the light of the aforementioned observation, further streamlining of the exit proceedings is desirable.

Currently, the exit proceedings have a two-instance system. In first instance, proceedings must be started at the District Court. Appeal to the judgment of the District Court is merely to the OK.4 As appears from the literai wording of Art. 6 ECHR as well as case law, from a European legal perspective it is not required to adhere to a two-instance system. Already in 1970, in the Delcourt case, the European Court of Human Rights firmly stated:

"Article 6 para. 1 (art. 6-1) of the Convention does not, it is true, compel the Contracting States to set up courts of appeal or of cassation. Nevertheless, a State which does institute such courts is required to ensure that persons amenable to the law shall enjoy before these courts the fundamental guarantees contained in Article 6 (...)."5

Since 1970, the ECHR has rendered many judgments in which the view is repeated that Art. 6 ECHR does not compel States to set up proceedings that consist of two instances.6 Therefore, from a European legal perspective the exit proceedings can be limited to one instance. The only relevant question is whether the exit proceedings as a whole meet the requirements of Art. 6 ECHR, in other words whether the fundamental guarantees of the parties involved are sufficiently safeguarded.

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