NO DERIVATIVE ACTION IN CURACAO

A claim based on tort is possible though

Curaçao corporate law does not provide for any derivative suit mechanism (and neither do the laws of Aruba, St. Maarten and the BES-islands). This matter was first decided in the cases of Poot v. ABP, Hoge Raad (Dutch Supreme Court) 2 December 1994, NJ 1995, 288, and Constance et al. v. Noro et al., Gemeenschappelijk Hof van Justitie van de Nederlandse Antillen en Aruba (Joint Court of Appeal of the Netherlands Antilles and Aruba) 13 December 1994, SJD 1994, 498.

However, a shareholder suffering derivative damage may commence proceedings against, for instance, the board of directors of the corporation or co-shareholders based on tort. An important requirement for a direct action by the shareholder suffering derivative damage, is that the wrongdoer committed a tort vis-à-vis the shareholder (i.e., violated a specific duty of care towards that shareholder).

An example of a situation in which a third party has breached a specific standard of due care against shareholders, and those shareholders therefore had an individual claim for damages, can be found in the case of Kip and Sloetjes v. Rabobank, Hoge Raad (Dutch Supreme Court) 2 May 1997, NJ 1997, 662. In this case a bank negligently withdrew credit from a group of corporations, and subsequently forced the shareholders – who personally had granted security for the obligations of the corporations – to sell their shares. The Supreme Court did allow the shareholders to initiate an action against the third party (the bank) because it had breached a specific standard of due care against the shareholders.

What seems to have played an important, and in my opinion: decisive, role in this Supreme Court decision is that the bank forced the shareholders to sell their shares, meaning that even if the corporation reclaimed the loss, the shareholders would not benefit from this. In other words, if the bank would not have forced the shareholders to sell their shares, given the ABP v. Poot-doctrine the outcome of this case probably would have been quite different. In the case of Kip and Sloetjes v. Rabobank the Supreme Court first discusses the Poot v. ABP-doctrine and subsequently considers (par. 3.6):

“The basis of the claim of Kip and Sloetjes is however of a completely different nature. Their assertions come down to this, that the Bank has committed tortuous acts towards them personally and that the damage they incurred is the result of a coherent complex of tortuous acts on the part of the Bank, which lead not only to a serious devaluation of their shares (…), but also resulted in a situation whereby they subsequently had to sell said shares – being pressurized by the bank – at a highly unfavorable moment, so that the damage due to the devaluation conclusively impaired their assets and cannot any longer be undone by a possible compensation paid by the bank to the companies”.

In my opinion, based on case-law, the requirement that a specific duty of care towards the shareholders must have been violated, means that, for instance, a claim by a shareholder against members of the board of directors based on the argument that they entered into a transaction on behalf of the NV or BV that caused a financial loss for the company, resulting in a decrease of the value of the shares, will not be awarded by a Curaçao court.

Karel Frielink
(Attorney/Lawyer, Partner)

(2 September 2015)

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