SEE YOU IN COURT?
Arbitration as an alternative for settling disputes in Curacao
Parties with a legal dispute can turn to the public court system to settle the dispute; however, instead of bringing a lawsuit in a public court, they can also opt for arbitration. Arbitration is a form of private dispute settlement in which the parties instruct one or more persons (arbitrators) to render a binding decision on their dispute. The arbitrators may be jurists, but they can also be laypersons. People with specific expertise or experience in a certain branch or industry are often chosen as arbitrator.
Parties …
Read the rest »
CELEBRATING THE 5TH ANNIVERSARY OF THIS WEBLOG
A cartoon has been drawn by Mike Flanagan for the 5th anniversary of the launch of Karel’s Legal Blog
June 1st, 2010 marks the 5th anniversary of my legal blog. This is an important milestone for me. Back in May 2005 I only had a rough idea about blogging and what it would take to create a successful legal blog a.k.a. blawg. Now, five years and some 350,000 page views later, I know that despite …
Read the rest »
COMMENCING PROCEEDINGS AGAINST MULTIPLE DEFENDANTS IN THE DUTCH CARIBBEAN
Non-residents can be sued
A general rule under the Netherlands Antilles code of civil procedure is that the Curacao court (or another court in the Dutch Caribbean as the case may be) has jurisdiction over defendants which are (in this example) Curacao residents or companies with an office in Curacao. In the case of multiple defendants, there is a general rule to the effect that if a Netherlands Antilles court has jurisdiction over one of the defendants (i.e., where the defendant has its corporate seat or domicile) it has jurisdiction over all defendants, including non-Netherlands Antilles residents or companies in cases …
Read the rest »
INADEQUATE CAPITALIZATION OF AN ARUBAN COMPANY
Liability for thin-capitalization?
In terms of ‘piercing the corporate veil’, thin or inadequate capitalization usually means capitalization that is not in proportion to the nature of the risks the business of the corporation necessarily entails; in other words it is based on likely economic needs rather than legal requirements.
Shareholders of a company in Aruba are under an obligation to pay to the company what is due with respect to the shares, i.e. the shareholder’s capital contribution, and such contribution may not be withdrawn without due process. This is the only financial obligation of a shareholder towards the company, unless …
Read the rest »
SUPERVISION OF TRUST COMPANIES IN THE DUTCH CARIBBEAN
Trust companies render management services
The supervision of trust companies is dealt with in the National Ordinance on the Supervision of Trust Service Providers 2003 (‘Landsverordening toezicht trustwezen’, the ‘NOST’). Supervision of trust companies (a.k.a. fiduciary or company service providers) falls in the category integrity supervision and not in the category prudential supervision. The supervisor is the Central Bank of the Netherlands Antilles. The ordinance prohibits anyone from rendering fiduciary or trust services without a license.
According to Art. 10 of the NOST, trust services means: (a) establishing an international company or causing it to be established when such is …
Read the rest »
THE THREE STAGES OF LEGAL PROCEEDINGS IN THE DUTCH CARIBBEAN
General observations regarding adversarial proceedings
All adversarial proceedings in the Dutch Caribbean shall be initiated by means of a petition to the Court of First Instance of the Netherlands Antilles or Aruba. Claims will be denied or rejected (afgewezen) by the Court if ruled that they are unfounded. If a claim is denied for reasons other than the merits of the claim then the claimant’s complaint will be declared non-admissible (niet-ontvankelijk). In exceptional cases the petition will be declared void and in some cases the court may rule that it is not competent to hear the case.
An appeal can …
Read the rest »
LECTURE ON GOOD CORPORATE GOVERNANCE IN CURACAO
Corporate Governance Adviser must be a strong and independent watchdog over the executive also
On April 13, 2010 a seminar on Good Corporate Governance with respect to Curacao-owned enterprises and foundations was held in Curacao, and organized by Certa Legal. I was one of the keynote speakers and delivered my presentation in the Dutch language (click here for the presentation or click here for the coverage of the event by the Antilliaans Dagblad).
I argued that government-owned companies should be left out of the political sphere as much as possible, so they can benefit …
Read the rest »
ORDINARY ADVERSARIAL VERSUS SUMMARY PROCEEDINGS IN THE DUTCH CARIBBEAN
The court only considers the key issues
According to Article 110 and 111 of the Netherlands Antilles Code of Civil Proceedings (NACCP), all adversarial proceedings shall be initiated by means of a petition to the Court of First Instance. Proceedings so initiated are ordinary proceedings, unless the petitioner expressly opts for preliminary relief proceedings (kort geding) under article 226 NACCP. This article provides that in urgent cases which require an immediate decision the plaintiff may request a provisional decision (beslissing bij voorraad).
Article 229 NACCP provides that a provisional decision rendered as a result of this special type of proceeding …
Read the rest »
OBITER DICTUM OR NOT?
Litigating twice on the same matter is not allowed
The Netherlands Antilles Code of Civil Procedure prevents parties from litigating twice on the same legal issue. The principle that a final judgment of a competent court is conclusive upon the parties in any subsequent litigation involving the same cause of action is known as ‘res judicata’. A Dutch court case is described below illustrating this principle: Utrecht District Court of 19 March 2009 (NJF 2009/291).
In initial litigation, the claimant had sought payment of certain contractual penalties. The Court of Appeals rejected the claim on two separate grounds, the first …
Read the rest »
DUTCH CARIBBEAN LITIGATION AND THE ESTABLISHMENT OF FACTS
Failing to contest may make a fact true
Facts play an important role in civil litigation. Facts are established by the Court in First Instance of the Netherlands Antilles or Aruba and by the Joint Court of Appeal of the Netherlands Antilles and Aruba, not by the Supreme Court. A review by the Supreme Court is not a full review, but is limited to verifying that the Court whose judgment is under review has not breached Netherlands Antilles laws (or Aruban laws as the case may be) and that there have been no defects in the proceedings resulting in the …
Read the rest »
PREJUDICED INTERESTS OF MINORITY SHAREHOLDERS IN THE NETHERLANDS ANTILLES
They may force the company to take-over their shares
Article 2:251(1) of the Netherlands Antilles Civil Code reads as follows: “A shareholder of registered shares, whose rights or interests are prejudiced to such an extent, by the conduct of the company or one or more co-shareholders, that a continuation of his shareholding cannot reasonably be required of him, may institute a claim against the company for withdrawal, demanding that his shares be acquired against payment in cash”.
This provision may only be successfully triggered in exceptional circumstances. This could be the case if the company or co-shareholders have a structural policy …
Read the rest »
ORDINARY VERSUS SUMMARY PROCEEDINGS IN ARUBA
Interlocutory or summary proceedings provide for immediate relief
Article 110 of the Netherlands Antilles and Aruba Code of Civil Procedure (‘the Code’) provides that all adversarial proceedings shall be initiated by means of a petition to the court of first instance. Proceedings so initiated are ordinary proceedings a.k.a. proceedings on the merits.
A petitioner may opt for preliminary relief proceedings (a.k.a. interlocutory proceedings; ‘kort geding’). Article 226 of the Code provides that in urgent cases which require an immediate decision, the plaintiff may request a provisionally enforceable judgment (‘beslissing bij voorraad’).
Article 229 of the Code provides that a provisional …
Read the rest »