ARBITRATION AND CORPORATE DISPUTES UNDER NETHERLANDS ANTILLES LAW
The articles of association may contain an arbitration clause
The articles of Royal Dutch Shell plc (an English company headquartered in The Hague) provide for a peculiar dispute resolution: disputes between shareholders and the company (or its subsidiaries) but also disputes between shareholders and professional service providers of the company, like accountants, shall be exclusively and finally resolved under the Rules of Arbitration of the International Chamber of Commerce (ICC). Whether this clause will be upheld in any and all jurisdictions is questionable.
It is believed that the clause was inserted in an attempt to avoid US class actions (recently Shell has been forced to pay out $ 9.2 million in legal fees and make changes to its corporate governance structure as part of a settlement with disgruntled shareholders). It is not very likely that the US courts shall honor said arbitration clause. Also, ICC arbitration proceedings are very expensive and may prevent shareholders from initiating legal action. From a corporate governance perspective this is not desirable.
The articles of association of a Netherlands Antilles NV or BV may provide that all or specific disputes between two or more shareholders, or between shareholders and the company, or between two board members, as well as similar disputes, may be settled by arbitration.
This possibility is limited to disputes between persons involved in the organization of the company and limited to disputes between them in that capacity. If, for example, there is a dispute between two neighbors about a tree, while they are both shareholders of one and the same company too, the arbitration clause will not be applicable.
Karel Frielink
Attorney (Lawyer) / Partner
