In our previous Newsletters of December 15, 2016 and July 5, 2017, we already discussed the inquiry procedure in Curaçao that was initiated for several state-owned companies. The inquiry (investigation proceedings) was ordered by the Dutch Caribbean Joint Court of Justice, since it found that there were, prima facie, justified reasons to question the correctness of the company’s policy, including amongst others violation of the law, financial reporting or accounting irregularities, insufficient disclosure of information to shareholders or other stakeholders, and conflicts of interest involving the company, its management and/or its stakeholders.
On June 13, 2017, the Joint Court of Justice rendered its final decision. It ruled, for two of the government owned companies, that in the period between October 10, 2010 and September 29, 2012, the rules and practices of good corporate governance have not been applied. It was concluded, inter alia, that others such as the Board of Supervisory Directors and the shareholder (being the Government of Curaçao) of the company had – de facto – taken over the role and accompanying duties of the Board of Managing Directors and thus de management of the company, and that decisions were taken that were not in the interest of the company, due to conflicts of interest. This has led, according to the Joint Court of Justice in its ruling, to mismanagement.
A cassation appeal was brought before the Supreme Court. The question arose to what extent a Curaçao inquiry could relate to facts that occurred prior to January 1, 2012, i.e. the date on which the inquiry legislation came into force. The Joint Court of Justice had, also previously, answered this question in the affirmative.
In its judgement of July 6, 2018, the Supreme Court confirmed that anterior facts can also form the basis for an inquiry procedure and the decisions to be taken by the Joint Court of Justice. According to the Supreme Court, this does not bring about retroactive effect. After all, the legal consequences of an inquiry do not focus on the past but on the present, the legal entity of today. The fact that the qualification of mismanagement and the identifying of responsible persons can have negative consequences – such as directors’ liability – does, in the opinion of the Supreme Court, not alter this legal point of view. The Supreme Court rejected the cassation appeal.