6.11.3 Exit proceedings

As appears from case law, exit proceedings have been applied in interlocutory proceedings. The frequency of application of the expulsion proceedings in the interlocutory proceedings is higher.1 First, I will pay attention to an expulsion case in which the considerations of the court can also be relevant for the exit proceedings.

In the case of Wichgers/De Jong, the Court of Appeal of 's-Hertogenbosch held that the nature of proceedings for the settlement of disputes does not fundamentally oppose to application in interlocutory proceedings, in the sense that application in interlocutory proceedings is not excluded under all circumstances.2 The court considered that exceptional cases may occur in which interlocutory proceedings can be used.

In addition, there are some cases in which the court refused expulsion in interlocutory proceedings. In de Zegers case, the court refused expulsion of a shareholder in interlocutory proceedings, inter alia because of the complexity of the case.3 Moreover, the Court of Appeal of Amsterdam denied an expulsion claim in interlocutory proceedings, whereas no urgent interest was present.4

As far as I can see, only once a court has been requested to reward an exit of a shareholder in interlocutory proceedings. This request, done in the case of BOM/Alpinvest, was not very successful. In this case, one of the shareholders claimed an exit further to the fact that his right of binding nomination (bindende voordracht) of a supervisory director was denied. The President of the Court held that this case was not exceptional enough to justify the reward of an exit claim in interlocutory proceedings. I agree with this judgment. Although this minority shareholder undeniably wishes to end a situation of oppression as soon as possible by exiting the company, it is hard to imagine what urgent circumstances would justify rewarding his exit in interlocutory proceedings.

It is questionable whether exit proceedings can be dealt with appropriately in interlocutory proceedings. Judgments based on the exit proceedings are farreaching, similar to those under the expulsion proceedings. These judgments can be partly punitive, but are predominantly constitutive of nature. In legal literature, it is widely acknowledged that in principle a constitutive judgment cannot be given in interlocutory proceedings.5 This stance forms a significant hick-up for application of the exit proceeding in interlocutory proceedings. Secondly, rewarding an exit claim (or expulsion claim) in interlocutory proceedings seems to conflict with the mandatory nature of proceedings for the settlement of disputes, as exposed in § 6.4.1.6

Apart from that, because of the complexity of exit cases, it will often be very difficult, if not impossible, for the court to determine whether an exit claim should be rewarded. This is further complicated by the fact that the price of the shares must be determined by the court. Except for limited exceptions, proceedings for the settlement of disputes prescribe a valuation by experts. In interlocutory proceedings, there is often not enough time to address all these issues. If the court is of the opinion that the case is unfit to be handled in interlocutory proceedings, it ought to refuse the request for exit on the basis of Art. 256 RV.

Further to the aforementioned reasons, I think that in general application of the exit proceedings (or expulsion proceedings) in interlocutory proceedings is highly objectionable. Nonetheless, I do not assume that application in interlocutory proceedings should be excluded altogether. It is reasonable to assume that rewarding expulsion claims or exit claims in interlocutory proceedings is possible, but only in very exceptional cases.7 With respect to expulsion claims, this could especially lead to a reasonable result in a situation like in Wichgers/De Jong. In this case, shares had become worthless, the company was at serious risk of insolvency, and risk-bearing capital could only be injected into the company if the obstructionist-shareholder would leave. In my view, it is useless to protect a holder of worthless shares, if expulsion of that shareholder could avert the insolvency of the company. In this situation, it is crystal clear which way the balance should tip. The interest of the continuation of employment by the company may justify rewarding expulsion claims or exit claims in interlocutory proceedings as well.8 With respect to exit claims, it is conceivable that a case arises in which the exit claim is rather clear and the oppressed shareholder is in urgent need of money.9 In this situation, application of the exit proceedings in interlocutory proceedings may be reasonable.

By way of conclusion, in the same spirit as the aforementioned, I do not think that the interlocutory proceedings should be used when a deadlock between shareholders is present.10 In this situation, the usual proceedings must be adhered. However, an exception must be made if urgent measures are needed.