Legal Blog

Tuesday, July 23, 2013

No derivative action in Curacao

Curaçao law does not provide for a derivative action

According to Section 2:3 subsection 1 of the Curaçao Civil Code, for the purposes of patrimonial law (i.e. the law of property, rights and interests and the law of obligations) a legal person (e.g. an NV or BV) is equated with a natural person, except where this would be contrary to the law. 

This Section prevents (majority and minority) shareholders from claiming damages from a third person (including current or former members of the Board of Directors and co-shareholders) for any damage that this third person has caused the corporation. Only the corporation itself, as a subject under the law, can claim damages from such third person; the mere fact that the shareholders’ shares have declined in value is not grounds for a separate action by the shareholders.

This matter was first decided in the cases of Poot v. ABP, Hoge Raad (Dutch Supreme Court) 2 December 1994, NJ 1995, 288, and Constance et al. v. Noro et al., Gemeenschappelijk Hof van Justitie van de Nederlandse Antillen en Aruba (Joint Court of Appeal of the Netherlands Antilles and Aruba) 13 December 1994, SJD 1994, 498.

A shareholder suffering derivative damage may commence proceedings against, for instance, the Board of Directors of the corporation or co-shareholders based on tort. An important requirement for a direct action by the shareholder suffering derivative damage, is that the wrongdoer committed a tort vis-à-vis the shareholder (i.e., violated a specific duty of care towards that shareholder).

Filed under: Corporate by Karel Frielink.



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