DIRECTORS’ LIABILITY IN CURACAO
Quasi-director may be held liable too
The members of the board of managing directors are personally and severally liable towards the limited liability company (NV or BV) for any loss caused by the improper performance of duties. Each member of the board who proves that he cannot be blamed for such improper performance and that the activities concerned fall outside the scope of activities addressed to him, and that he has not been negligent in taking steps to avert the related consequences, is not liable (Section 2:14 subsection 4 Curaçao Civil Code; “CCC”). Therefore, a division of tasks among such …
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ORDER OF THE COMMON APPEAL COURT OF CURACAO CONCERNING THE RIGHT TO INSTITUTE AN INQUIRY
The Appeal Court has taken several fundamental decisions
On 5 March 2013 the Common Court of Justice of Aruba, Curacao, Sint Maarten and of Bonaire, Sint Eustatius and Saba (case: Ghis 55769 – HAR 28/12) issued an order in connection with inquiry proceedings. This order contains three major considerations.
The right of legal entities (including public limited companies [NV] and private companies with limited liability [BV]) to institute an inquiry was introduced in Curacao on 1 January 2012. Almost immediately after this introduction an application for instituting inquiry proceedings was submitted to the Appeal Court. The facts …
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BESCHIKKING INZAKE ENQUETERECHT GEMEENSCHAPPELIJK HOF CURACAO
Het Hof neemt enkele principiële beslissingen
Op 5 maart 2013 heeft het Gemeenschappelijk Hof van Justitie van Aruba, Curaçao, Sint Maarten en van Bonaire, Sint Eustatius en Saba (zaak: Ghis 55769 – HAR 28/12) een beschikking in het kader van een enquêteprocedure gegeven. Drie belangrijke overwegingen worden hier genoemd.
Het enquêterecht voor rechtspersonen (waaronder naamloze en besloten vennootschappen) is in Curaçao op 1 januari 2012 ingevoerd. Vrijwel direct na de invoering is een enquêteverzoek bij het Hof ingediend. De feiten die aan dat verzoek ten grondslag zijn gelegd hebben betrekking op de jaren voorafgaande aan de invoering van het enquêterecht. …
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LECTURE ON GOOD CORPORATE GOVERNANCE
Looking back on the future: the further development of corporate governance in Curaçao
A seminar on Checks and Balances in Corporate Governance on Curacao, was held on Thursday February 21st, 2013. More than 125 interested managing directors, supervisory directors, lawyers, accountants and other participants were in attendance.
The seminar was organized by the Board of financial supervision (College financieel toezicht – Cft), the Foundation Bureau for Supervision and Standardization Government Entities (Stichting Bureau Toezicht en Normering Overheidsentiteiten – SBTNO) and the Dutch Caribbean Accountants Association (DCAA). I had the honor to speak on the present and future of the Corporate …
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TAKING OVER CONTROL OF A CURACAO COMPANY THROUGH A FOREIGN COURT DECISION
The powers of a foreign appointee will not be recognized
According to Curacao private international law, the appointment and dismissal of board members of a company as well as decisions limiting their powers is governed by the laws of the jurisdiction under which the company is incorporated. Accordingly, the appointment and dismissal of a board member of a Curacao limited liability company (NV or BV) as well as any limitation in respect of his powers must take place in accordance with Curacao law.
In the event a Curacao company has a foreign branch, e.g. in the United States, such company …
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FATUM HOLDING ACQUIRES ROYAL & SUN ALLIANCE (ANTILLES)
Press release
Fatum Holding N.V. (Fatum), today announced the acquisition by Fatum of 100% of the issued share capital of Royal & Sun Alliance Insurance (Antilles) N.V. from the RSA Group and Maduro & Curiel’s Bank.
The financial terms of the transaction are not being disclosed at this time. The successful completion of this transaction is subject to all necessary approvals from the Regulators in Curacao, Sint Maarten, Aruba and the islands of Bonaire, Sint Eustatius and Saba.
RSA (Antilles) is a major provider of General Insurance products and services in the Dutch Caribbean, and is jointly owned by the …
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INADEQUATE CAPITALIZATION OF A CURACAO COMPANY
Liability for thin-capitalization?
A shareholder is not personally liable for acts performed in the name of the company and is not liable to contribute to losses of the company in excess of the amount which he must pay to the company as contribution for his shares.
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. In almost all jurisdictions, undercapitalization as such is …
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GOVERNMENT AND CORPORATE GOVERNANCE (V)
Government drafted model articles of association
The first model articles of association date from March 15, 2011.
For criticism see: K. Frielink, Visie Land op overheids-NV’s verkeerd [Vision Country on government-owned NVs incorrect], Antilliaans Dagblad 15 April 2011, p. 16 and M.L. Alexander, F.B.M. Kunneman, L.G. Santine and R.J. in ’t Veld, Modelstatuten ten sterkste afgeraden [Model articles of association strongly discouraged], Antilliaans Dagblad 20 September 2011, p. 14-15. See also K. Frielink, Stop politieke benoemings- en ontslagcarrousel [Stop politicial appointment and dismissal merry-go-round], Antilliaans Dagblad 14 September 2010, p. 14-15.
In the meantime, the models for …
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GOVERNMENT AND CORPORATE GOVERNANCE (IV)
Code Corporate Governance Curacao
On January 1, 2010, the National Ordinance regarding corporate governance came into effect. Based on this the Code Corporate Governance Curacao came into being, that also came into effect on January 1, 2010. In it, reference is still made to the Executive Council and the island territory of Curacao, but as from October 10, 2010 these are understood to mean the government of Curacao and the Country Curacao.
The National Ordinance does not only undertake to establish a corporate governance code, but also to implement the Code in the government-owned companies. In 2011, this implementation obligation …
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GOVERNMENT AND CORPORATE GOVERNANCE (III)
The government is not automatically an ‘ordinary’ shareholder
It is obvious that in a small community such as that of Curacao, with only a limited choice when it comes to directors and supervisory directors to be appointed, and in which (family, social) networks seem to play an important role in making choices, there is a field of tension. It is even more important therefore that government has a clear vision regarding its shareholdership and that there are good and transparent procedures, e.g. regarding the appointment of directors and supervisory directors.
Does the obligation exist for the government to, briefly stated, …
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GOVERNMENT AND CORPORATE GOVERNANCE (II)
Government (not) at a distance?
Being a director of a government-owned company is certainly not always as easy. Neither is being a shareholder in a government-owned company. The directors will usually complain about too much influence from politicians, while the politicians will usually find that they have too little grip on government-owned companies. In this connection, there are two important topics we will have to consider briefly.
I will ignore cultural aspects here. In that respect see e.g. chapter 8 of the dissertation of A. van Marrewijk, Internationalisation, cooperation and ethnicity in the telecom sector, Delft: Uitgeverij Eburon 1999, 340 …
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GOVERNMENT AND CORPORATE GOVERNANCE (I)
For Hobbes, it is certain that there must be a sovereign
According to Thomas Hobbes we all have natural passions that carry us to, among other things, partiality, pride, and revenge. The laws of nature, as Hobbes sees them, including ‘justice’, ‘equity’, ‘modesty’, and ‘mercy’, are contrary to our passions. Therefore, we will only observe the laws of nature if we have fear of some power to cause them to be observed. According to him, covenants, without the sword, are but words that lack every strength to protect a person.
See Thomas Hobbes, Leviathan, Amsterdam: Boom 2007, p. 207 and …
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