Wagevoe: new ways to resolve shareholder disputes

The Act on the Adjustment of Dispute Settlement Regulations and the Clarification of Admissibility Requirements for Inquiry Proceedings (Wet aanpassing geschillenregeling en verduidelijking ontvankelijkheidseisen enquêteprocedure, or "Wagevoe") entered into force on 1 January 2025. Its legislative purpose is to make current dispute settlement more effective and versatile. Dispute settlement serves to resolve disputes among shareholders of unlisted private or public companies and may involve a forced transfer of shares ('squeeze-out') or a forced takeover of shares ('exit').

The Wagevoe introduces a number of key changes. In this News Update, we discuss the ones most relevant to the field.

Squeeze-out capacity criterion has been eliminated

First of all, the scope of the squeeze-out rules has been considerably expanded. A squeeze-out application can be submitted if a co-shareholder's conduct prejudices or has prejudiced the interests of the company to such an extent that the continuation of that co-shareholder's shareholding cannot reasonably be tolerated. Under the former rules, only conduct performed in the capacity as shareholder could justify a shareholder squeeze-out. This restrictive criterion made squeeze-out often difficult to accomplish in practice. 
The Wagevoe has eliminated this 'capacity criterion', allowing, for example, conduct of a shareholder as a director or private individual to be considered in the assessment of whether there are any grounds for a squeeze-out. This could apply, for instance, if a shareholder operates another business that competes with the company. 

Application proceedings with the Enterprise Chamber and limitation to one fact-finding instance from now on

In addition, squeeze-out and exit proceedings are now initiated by application instead of by summons. They have also been limited to one fact-finding instance, the Enterprise Chamber, which is highly experienced in shareholder dispute settlement and share valuation. The introduction of application proceedings also promotes efficiency and allows more actors to join the proceedings as interested parties, who moreover will also benefit from any preliminary relief granted. The Enterprise Chamber can furthermore examine related actions that are connected with or ensue from the same dispute that gave rise to the exit or squeeze-out application.

Lastly, an exit or squeeze-out application can be combined with an inquiry application. In this connection, it will be particularly interesting for practitioners to see how the Enterprise Chamber can offer even more tailored solutions under the new rules. The legislature has left it up to the field to work out the practical details. 

Expansion of inquiry proceedings access requirement

Finally, the Wagevoe expands shareholders' and depositary receipt holders' access to inquiry proceedings by introducing a separate access requirement for listed companies. 

Solving shareholders' disputes 

Better safe than sorry. As before, it is possible to prevent application of the dispute settlement rules by regulating dispute settlement by contract or in the articles of association. Alternative resolution methods include arbitration, a private settlement or mediation, while another possibility is to make prior contractual arrangements on the valuation and pricing of shares. We will be pleased to assist you in drawing up your own settlement regulation or, in case a shareholder dispute has escalated, in determining your position as a shareholder. 

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