It is clear that a shareholders’ agreement has its effects within the formal regulations of a company. These effects imply that stipulations in the shareholders’ agreement operate within the corporate sphere.
This is particularly important if company decisions conflict with the shareholders’ agreement. The court has repeatedly confirmed that a shareholders’ agreement has a company law effect. This means that decisions which are in conflict with the shareholders’ agreement are annullable, according to the principles of reasonableness and fairness.
Recently, the question has been submitted to the court of Zeeland-West Brabant about how corporate law relates to contractual agreements other than those of a shareholders’ agreement.
A family company
This case is about a family company. The shares in the family company are certified and are held by three children. The contractual arrangements between them are included in a settlement agreement. Two of the children made a decision that was in conflict with the stipulations of the settlement agreement.
As a reaction to this decision, the third child has initiated a legal procedure at the court and claims that the decision is illegal because of a breach of the principles of reasonableness and fairness. The third child claimed that the settlement agreement has the same corporate law effect as a shareholders’ agreement.
In this case the court of Zeeland-West Brabant concludes that the settlement agreement does indeed have corporate law effect and that the decision must be annulled.