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Scope of Investigation in Inquiry Proceedings under Curaçao Law

Pursuant to the Curaçao Corporate Code the Enterprise Chamber of the Joint Court of Justice may, at the request of an interested party such as a shareholder, order an inquiry (investigation proceedings) into the policy and affairs of a corporation. Such an order will be given if the Enterprise Chamber finds that there are, prima facie, justified reasons to question the correctness of the company’s policy. Examples of such justified reasons include allegations of violation of the law, financial reporting or accounting irregularities, insufficient provision of information to shareholders or other stakeholders, and conflicts of interest involving the company, its management and/or its shareholders.

In a case earlier this year before the Supreme Court, the legal question was whether the investigation to be ordered can only relate to (and must be limited to) these justified reasons, as established by the Enterprise Chamber, and which deal with the correctness of the company’s policy. This question was recently answered, by the Supreme Court.

According to the Supreme Court, the investigation need not be limited to the objections to the policy of the company or the conduct of its business, as established by the Enterprise Chamber in the order for the investigation and which form the basis for its opinion that there are good reasons to doubt a correct policy. The Enterprise Chamber is free to instruct, or to allow, the appointed investigator to include other objections as part of the investigation. This is in line with the great degree of freedom that the Enterprise Chamber has in determining the scope of an investigation. However, in this respect the condition applies that the other objections to be investigated must be sufficiently related with the objections that form the basis for the opinion that there are justified reasons to doubt a correct policy.