Provisional measures

Traditionally, the investigation was the central element in the inquiry procedure. Since 1994, however, it has also been possible – if there are ‘well-founded reasons to doubt proper policy or the proper course of affairs’ – to request the Enterprise Chamber, in addition to the investigation, to intervene by means of so-called provisional measures.

General

Article 2:349a(2) BW provides that the Enterprise Chamber, if – having regard to the interests of the legal entity and those involved in its organisation by virtue of the law and the articles of association – a provisional measure is required in view of the state of the legal entity or in the interests of the investigation, may at any stage of the proceedings, at the request of the inquiry applicants, impose such a measure for a maximum of the duration of the proceedings. A separate counter-application by the respondent or an interested party may also include a request for provisional measures.

Who may request provisional measures

A provisional measure may be requested by the inquiry applicants, interested parties who have appeared in the proceedings and the legal entity itself, provided the request relates to the subject of the original application. The persons entitled to submit a request for provisional measures in the second phase of the inquiry procedure are the original inquiry applicants, the Advocate General and, insofar as the report is available for their inspection, those who meet the requirements of Articles 2:346 and 2:347 BW.

When provisional measures can be imposed

Provisional measures can be imposed at any stage of the proceedings at the request of one of the parties. Such a request may therefore be made during the first phase, during the investigation itself or in the second phase. A request will only be granted if it is required in view of the state of the legal entity or if it is in the interests of the investigation.

When assessing a request for provisional measures, the court must always weigh the interests at stake. A provisional measure may only be imposed if the Enterprise Chamber considers it proportionate, giving due consideration to and making a fair assessment of the interests of the parties involved.

Provisional measures may deviate from the articles of association and from mandatory law.

The Enterprise Chamber is free to impose such provisional measures as it deems necessary in view of the state of the legal entity, even if this temporarily infringes the legal relationships within the legal entity. The Skygate judgment makes clear that such measures may also have irreversible consequences, provided the measure is by its nature provisional and that, in imposing it, due consideration is given to and a fair assessment is made of the interests of the parties involved.

What measures can be imposed?

In contrast to the final measures set out in Article 2:355 BW, provisional measures are not exhaustive and the Enterprise Chamber may impose measures other than those requested. The most common measures in practice are:

• suspension of a board member or supervisory board member, usually combined with the appointment by the Enterprise Chamber of one or more temporary board members or supervisory board members (sometimes with a casting vote);
• temporary transfer of shares in the company for management purposes to an administrator appointed by the Enterprise Chamber;
• temporary deviation from provisions of the articles of association.

The Enterprise Chamber may not impose measures of its own motion, but it may impose measures other than those requested. This is generally discussed during the oral hearing. The Enterprise Chamber must, however, comply with Article 24 of the Dutch Code of Civil Procedure (judicial passivity) and avoid surprise decisions.

Duration of measures

Provisional measures are imposed for a maximum of the duration of the proceedings. Measures imposed on a preliminary basis therefore lapse if no investigation is ordered (Article 2:349a(3) BW). If, after filing of the investigation report, no request is made to determine mismanagement and impose measures, the provisional measure lapses (Article 2:355(2) BW). If the second-phase request is submitted in time, the provisional measure remains in force until the final order becomes irrevocable or until the end of the measures imposed under Article 2:356 BW.

Any interested party and the legal entity may, while the proceedings are ongoing, request the termination, extension or amendment of provisional measures already imposed (Novero judgment). Officers temporarily appointed by the Enterprise Chamber may also request the termination, extension or amendment of measures, as they too are entitled to request new and additional measures.

Provisional measures without an inquiry

The starting point is that provisional measures are imposed only in combination with an inquiry. In urgent cases, however, the Enterprise Chamber may choose to impose provisional measures without ordering an investigation. This is possible only if, in its provisional opinion, there are well-founded reasons to doubt proper policy or the proper course of affairs and the Enterprise Chamber decides on the request for an inquiry within a reasonable period (depending on the case and extendable by agreement with the parties).

Relationship with interim relief measures

The preliminary relief judge of the ordinary court is also authorised under Article 254 of the Dutch Code of Civil Procedure to impose provisional measures, but must act with restraint when such a measure is sought in connection with an inquiry. In principle, they must limit the duration of any measure they impose to the time at which the Enterprise Chamber will have decided on a request for provisional measures, in order to avoid contradictory or incompatible decisions.