STATE-OWNED ENTERPRISES AND GOOD CORPORATE GOVERNANCE
Speech by Karel Frielink at the 8th Biennial Conference of the Caribbean Ombudsman Association
Ladies and Gentlemen!
First of all, I would like to thank the Curaçao Ombudsman, Alba Martijn, for inviting me to speak at this conference. Unfortunately, she will leave office in about a month. She did an excellent job, and her professionalism, dedication and impartiality leave a lasting legacy. Thank you Alba!
I have only half an hour, so I won’t travel back in time to the early days of mankind. I just start with Plato (427 – 347 B.C.E.). You may have heard of this philosopher. …
Read the rest »
DUTCH CARIBBEAN BANKS AND REGULATORY ISSUES
A bank has less freedom than an ordinary legal entity
What would be the requirements, from a regulatory point of view, if a Curaçao or St. Maarten bank wished to sell its entire business or a substantial part thereof? Would it require approval from the Central Bank of Curaçao and St. Maarten (‘Centrale Bank van Curaçao en St. Maarten’)?
Generally, if the activity at a bank is characterized as some form of financial reorganization, for example, the prior approval of the Central Bank is required. The bank is also obliged to immediately inform the Central Bank in writing of any …
Read the rest »
THE COURT OF LAST RESORT
Curaçao court as court of last resort for civil matters
An attachment on assets located in Curaçao generally establishes jurisdiction over the cause of action for which the attachment is made, also if neither of the parties involved are domiciled in Curaçao.
According to Section 767 of the Curaçao Code of Civil Procedure, the Curaçao court is competent to hear a case on the merits (i.e. has (international) jurisdiction) if there are no other means of obtaining an enforceable order in Curaçao (first condition).
This condition will not be met if, for instance, in respect of a claim an arbitrator …
Read the rest »
150 JURIDISCHE PUBLICATIES
Een persoonlijke mijlpaal
Afgelopen donderdag was het dan zo ver: mijn 150e juridische publicatie zag het levenslicht. Het gaat om mijn bijdrage aan het Liber Amicorum ‘Christels Koers’ dat toen werd aangeboden aan prof.mr. drs. C.M. Grundmann-van de Krol: “Openbaarmaking door de financiële toezichthouders”. De volledige lijst met publicaties is hier te vinden.
Nummer 151 is overigens al geschreven en is in het komende nummer van het Caribisch Juristenblad te vinden. De meer dan 850 stukken die op deze weblog staan heb ik uiteraard niet meegeteld…
Karel Frielink Attorney (Lawyer) / Partner
(2 December 2013)
.
INDEPENDENT SUPERVISORY BOARD IN ST. MAARTEN
Should be mandatory for government-owned entities
Under the laws of St. Maarten, the main task of a board of supervisory directors is to supervise the board of managing directors of a limited liability company (NV or BV).
The St. Maarten Corporate Code provides for two different kinds of boards of supervisory directors, a “regular” board of supervisory directors and the so-called “independent” board of supervisory directors (Section 2:139 Civil Code). Within this context the word independent means that the supervisory directors are independent of the shareholders, interest groups (“belangengroepen”) and to a certain extent from the shareholders’ meeting.
An independent …
Read the rest »
THE ARTICLES OF ASSOCIATION OF A CURAÇAO COMPANY (III)
Controlling minority?
Such a situation (i.e. example 2) is possibly less desirable from the company’s perspective, certainly where the more essential decision-making is concerned. Although decisions should be taken on the basis of a discussion of content and it will not always be possible to predict how the meeting of shareholders will vote, the possibility of ‘accidental’ majorities (whereby a minority shareholder nevertheless has the majority through the absence of others at the meeting of shareholders) leads to less predictability, or at least to greater uncertainty.
If a company has, for example, one 30% shareholder and the remaining 70 shareholders …
Read the rest »
THE ARTICLES OF ASSOCIATION OF A CURAÇAO COMPANY (I)
Comparable with a constitution
The articles of association of a Curaçao company (a public [NV] or private [BV] limited liability company) are somewhat comparable with a constitution or state regulations: the articles of association comprise – like the law, but also additionally to the law and, where permitted, unlike the law – the rules of play (rights, obligations and powers) to which all the organs of the company (managing board, supervisory board, shareholders’ meeting) and the members of those organs must adhere or on which they can rely.
The law of Curaçao does not prescribe that a special (or qualified) …
Read the rest »
VALIDLY REPRESENTING A CURACAO COMPANY
Extract and Articles are of importance
Limited liability companies like the Curaçao NV or BV are legal entities. Whether or not a managing director has the authority to validly represent a company can be derived from the extract from the Trade Register of the Chamber of Commerce of Curaçao together with the articles of association of the company.
However, it could be the case that the company has further regulations from which representation limitations follow. This should be assessed on a case by case basis.
A counterparty may rely on a written statement from the board of managing directors or …
Read the rest »
THE COSTS OF LITIGATION
Parties have to bear their own attorney costs
Under the laws of Aruba, Bonaire, Curaçao, St. Maarten, St. Eustatius and Saba, generally speaking, each party has to bear its own attorney costs, except if there is an agreement in place between the parties providing for such compensation. Other costs related to proceedings are for instance bailiff costs and court fees.
The extent to which the aforementioned costs of litigation are to be borne by the party losing the case are determined by the court. The costs will in fact not compensate the actual costs and attorneys fees incurred. They are …
Read the rest »
A CURACAO COMPANY WITH NEGATIVE EQUITY AND FINANCIAL SUPPORT
Restrictions for providing financial support to a party acquiring shares in its capital?
A company cannot purchase its own shares if it has a negative equity capital or when this equity capital becomes negative by purchasing them, whereby the nominal capital applies as the lower limit (Section 2:114 subsection 2 of the Curaçao Civil Code in conjunction with Section 2:118 subsections 5 to 7 of the Curaçao Civil Code).
The question is, however, whether a Curaçao NV (public limited company) or BV (private limited liability company) with negative equity is allowed to provide financial support to a third party acquiring …
Read the rest »
THE INDEPENDENT SUPERVISORY BOARD IN CURACAO
Should be mandatory for government-owned entities
Under the laws of Curaçao, the main task of a board of supervisory directors is to supervise the board of managing directors of a limited liability company (NV or BV).
The Corporate Code provides for two different kinds of boards of supervisory directors, a “regular” board of supervisory directors and the so-called “independent” board of supervisory directors (Section 2:139 Curaçao Civil Code). Within this context the word independent means that the supervisory directors are independent of the shareholders, interest groups (“belangengroepen”) and to a certain extent from the shareholders’ meeting.
An independent board of …
Read the rest »
THE REPAYMENT OF SHARE PREMIUM IN CURACAO
Net equity may not be or become negative
From the legal point of view in Curaçao, share premium (’agio’) forms part of the company’s free reserves (Curaçao law does not provide for statutory reserves), and does not qualify as share capital. If share premium is to be repaid, the company’s financial condition should at the time allow for it, i.e. the net equity of the company may not be or become negative as a result of such repayment.
If the company has shares with a nominal value, the repayment may not result in the nominal capital exceeding the net equity …
Read the rest »