6.6.1 System of two instances

In first instance, a case under the exit proceedings must be brought before the District Court. The court of the district in which the company has its registered seat (statutaire zetel) has exclusive jurisdiction.1 If the case is brought before another District Court, this court must declare the claim inadmissible.2 Appeal to the judgment of the District Court is merely open to the OK. In principle, no other Courts of Appeal are competent.3 The judgment of the OK can be appealed in cassation before the Dutch Supreme Court.

Although statute basically provides for proceedings in two instances, there are two options for prorogation of jurisdiction (prorogatie). As mentioned before, parties may agree otherwise in the articles of association or in a shareholders' agreement. Moreover, it is open to shareholders to waive first instance at the District Court with mutual consent and consequently apply in first instance to the OK.4

Art. 2:339 paragraph 2 DCC in conjunction with Art. 2:343 paragraph 2 DCC stipulates that the judgment that awards the exit claim can only be jointly appealed with the judgment with respect to the determination of the price of the shares (as referred to in Art. 2:340 paragraph 1 DCC), unless the court provides otherwise. This rule prevents that parties significantly delay proceedings by appealing with respect to each judgment separately, as was the case under the former exit proceedings. For this reason, the court should be reticent in allowing exceptions on this rule.

As mentioned in § 6.2.5.1 under recommendation 6, the Company Law Committee advised to concentrate cases with the OK and to abolish the first instance at the District Court. The legislator did not adopt this recommendation, for the reason that he introduced the option to combine proceedings for settlement of disputes with related claims (samenhangende vorderingen). Related claims could be, for instance, for damages. The provisions that enable a combination of an exit claim and related claims are found in Art. 2:336 paragraph 5 DCC in conjunction with 2:343 paragraph 2 DCC.

The Minister of Justice held that, generally, proceedings involving civil liability are shaped in two instances. In his opinion, such claims are usually of major impact on the fortune of the defendant, which justifies two instances to adhere.5 Therefore, a departure from this general rule in the situation that a claim for damages is combined with exit proceedings would not be desired. Concentrating cases in only one instance at the OK would only be possible if a combination with related claims is abolished. The Minister preferred the option of combining the exit claim with related claims above speeding up the proceedings by abolishing one instance. This choice has the advantage of preventing various court proceedings:

I concur with the Minister, that when it comes down to jurisdiction with respect to (related) claims for damages a system of two instances is preferred. In the Netherlands, District Courts are used to dealing with claims for damages. There is no good justification to treat civil liability in a different way in the field of company law than it is generally treated in law.

Secondly, I refer to Timmerman who puts forward that a system of two instances involves useful checks and balances when dealing with legal disputes regarding corporate law.7 Timmerman asserts:

Nevertheless, the abovementioned arguments do not seem convincing in the situation where a claimant chooses not to combine an exit claim with related claims for damages. I expect that, as a rule, parties do not wish to combine an exit claim with related claims, taking into consideration that the court is already authorized to increase the price of the shares in the case of reflective loss. As will be explained in § 6.7.4, it is far easier to have the price of the shares fürly increased than to have a claim for reflective loss granted by the court. Therefore, I recommend limiting the exit proceedings to only one instance at the OK.9

One could object to the aforementioned view by stating that one instance could be unhealthy. However, as experience has shown, almost all cases dealt with in proceedings for the settlement of disputes eventually have been brought before the OK.10 Moreover, currently most of the disputes between shareholders are already assessed by the OK in the inquiry proceedings, which has a oneinstance system as well.

In addition, I refer to the research performed under the supervision of Klaas sen with respect to the quality of specialised courts for litigating complex (international) business disputes.11 One of the findings of this research is that the users of the inquiry proceedings do not favour extending the inquiry proceedings from one instance to two instances.

In § 2.2.3.5, I explained that Art. 6 ECHR does not prohibit the Dutch legislator to introduce exit proceedings with merely one instance. For clarity reasons, I do not plead abolishing the option to appeal a judgment in cassation.