The conflict: a joint venture at a standstill
In this case, Shareholders A and B each own 50% of a Dutch private limited company (BV) that operates a small-scale care home. Both act as jointly authorized statutory directors. A fundamental disagreement arose regarding the management of the company, leading the claimant to argue that the business had become unmanageable.
In anticipation of full proceedings before the Enterprise Chamber, the claimant sought an interim solution: the temporary suspension of the co-director and the appointment of an independent director.
When facing such an impasse, two primary legal routes are available: summary proceedings and inquiry proceedings. While both can lead to drastic measures, such as the suspension or appointment of directors, the choice depends on the nature and urgency of the dispute.
Inquiry Proceedings: Restoring the Entity
The inquiry procedure is designed to remediate and restore healthy professional relations within a legal entity. Its primary goals are to ensure transparency and establish accountability for potential mismanagement. The focus is on the "health" of the company itself. If there are well-founded reasons to doubt the integrity of the company’s policies or conduct, the Enterprise Chamber may order an investigation and grant interim measures during the process.
Summary proceedings: immediate injunctive relief
Summary proceedings are different in nature. This is a dispute-resolution process between parties where a judge issues a ruling based on the underlying legal relationship. Instead of focusing on "mismanagement," the judge in summary proceedings determines whether an interim measure is necessary pending a final judgment on the merits (bodemprocedure).
The court must be cautious when intervening in matters of corporate governance. However, the suspension or appointment of directors is possible in exceptional cases—for instance, when the Enterprise Chamber cannot act quickly enough or when an inquiry is not yet an option, but immediate action is vital.
Key dfferences between summary proceedings and inquiry procedures
While inquiry and summary proceedings are distinct legal avenues, there is often no substantial difference in effect between the immediate injunctions issued by the Enterprise Chamber and the interim relief granted in summary proceedings. The primary distinctions lie at the procedural level, specifically regarding:
-
The Enterprise Chamber can only intervene when there are "well-founded reasons" to doubt company policy. In contrast, a judge in summary proceedings can act without such doubts, provided there is an urgent necessity
-
Interim measures in the Enterprise Chamber are strictly tied to an inquiry request. Summary proceedings can stand alone, even if no main proceedings on the merits are pending.
-
The right to request an inquiry is limited to specific parties defined by law (e.g., shareholders meeting certain thresholds). In summary proceedings, any interested party with a legitimate interest can initiate action.
-
Enterprise Chamber decisions can only be appealed in cassation (Supreme Court). Judgments in summary proceedings can be fully appealed in a Court of Appeal, allowing for a complete de novo review of the facts.
The choice for summary proceedings
In the proceedings before the Rotterdam District Court, the plaintiff opted for summary proceedings. The plaintiff argued that the company had become de facto unmanageable because the co-director remained aloof for extended periods, was unreachable, and failed to respond to matters concerning day-to-day operations. The court observed that since both directors held joint authority, the plaintiff could not make decisions independently. As a result, critical actions, such as hiring new staff, entering into contracts, and adopting financial statements, had come to a standstill.
The court noted that in this situation, internal decision-making and external representation had become conflated. The true "pain point" was not so much the internal decision-making process itself, but rather the external representation of the company, as that power was jointly vested in both directors.
This situation necessitated immediate action. This stalemate necessitated immediate action. Consequently, in anticipation of an inquiry procedure before the Enterprise Chamber, summary proceedings were initiated to obtain a temporary measure aimed at restoring the company's manageability. The judge in summary proceedings granted the claims. Significant weight was given to the small scale of the healthcare facility, the vulnerability of its clients, and the risk that continued unrest would lead to client departures, posing a serious threat to business continuity. Against this backdrop, the judge deemed it justified to temporarily suspend the co-director so that stability and administrative order could be restored.
Interestingly, the court addressed the relationship between summary proceedings and the Enterprise Chamber. It clarified a common misconception: the power of a judge in summary proceedings to grant interim measures is not limited to cases that are "previews" of an inquiry procedure. The legislator never intended to curtail the authority of the summary relief judge when the Enterprise Chamber gained the power to grant immediate injunctions (see, inter alia, Parliamentary Papers II 1991/92, 22400, no. 3, p. 15; and more extensively JOR 2025/255).
Need help with impasse?
This ruling confirms that summary proceedings are a powerful tool when a situation is too urgent to wait for the Enterprise Chamber, or when an inquiry is not the appropriate route. If you are facing a management impasse or want to explore the best legal strategy for a conflict within your organization, our team is here to help.
