(NON)MANDATORY RULES INDUTCH CORPORA TE LAW in breach of mandatory statutory provisions, public policy and/or mora lity are null and void(art. 3: 40 BW). Whilst art. 2: 25 BW lays down a fomal cri terion establishing the manda tory nature of statutory prov isions, the ratio for mandatory orporate la w especally lies in the protection of creditors, (minority) shareholders Ind employees. 19 As these notions are incorporated into statutory law, there seems to be little room left for public policy and morality as a separate category is does not apply, however, to the notion of reasonableness and faimess ofart 2: 8 BW. It is the comerstone of the protection of m inority shareholders under dutch corporate law.0 First, as mentioned above, a minority shareholder may apply for nnulment of a resolution of a company s organ if it is in breach of reasonableness and fairness, according to which the company and all involved have to behave. This may even set aside a resolution which is in compliance with prov isions in the company s articles. Secondly, acting in breach of reasonableness and faimess may constitute or contribute to mismanagement, whereupon the Enterprise Chamber may take the above-mentioned measures aga inst the company 21 Thirdly, there is a certain notion of reasonableness and fa iness incorporated in the dispute settlement procedure(artt. 2: 335-343 BW). One or more shareholders of a private company who represent at least one third of the share capital may instigate proceedings at a district court (rechtbank)against any other shareholder who conducts hm self in a manner unfairly prejudicial to the company s interest in order to obtain a ompulsory transfer of his shares. Reversely, a shareholder whose interests are damaged by the conduct of one or more other shareholders in such a way that he can no longer reasonably be required to continue being a shareholder, may demand to be bought out at a fair price Whereas Dutch corporate law is visibly permeated with reasonableness and iness, public policy and morality lead a more hidden existence. The latter notions do arise when the validity of shareholders agreements is at stake The different status of clauses in the articles and of shareholde agreements A general statutory provision on shareholder agreements does not exist in Dutch corporate law. Just as the articles of association, shareholder agreements find their limits in art. 3: 40 BW: mandatory law, public policy and morality. Shareholder agreements are subject to contract aw provisions such as fraud, duress and mistake Whereas the articles of association have to comply with mandatory corporate law, it Is uncertain how far mandatory corporate law affects the valid ity of shareholder Cf. TIMMERMAN, Waarom hebben w dwngend vennootschapsrecht?, n: Ondememingsrechtelijke Contracten, uitgave vanwege het Instituut voor Ondemem ingsrecht deel 1991,p.If DE KLUIVER, The European Pivate Company? A Dutch Perspective, in: The European Private Compay?, De Kluver, Van Gerven(eds ) Antwerp 1995, p 122 ff. Ondememngskamer Il March 1999, Nederlandse Junispndentie 1999, 351(Breevast Ondememingskamer 27 May 1999, Nederlandse urisprzdentie 1999, 487( Gucci). Implicit Hoge Raad 9 July 1990, Nederlandse Jurispnudentie 1991, 51(Sluis) Crit DORRESTEIJN, t.ap.. p 648(NON) MANDATORY RULES IN DUTCH CORPORATE LAW 7 in breach of mandatory statutory provisions, public policy and/or morality are null and void (art. 3:40 BW). Whilst art. 2:25 BW lays down a formal criterion for establishing the mandatory nature of statutory provisions, the ratio for mandatory corporate law especially lies in the protection of creditors, (minority) shareholders and employees.19 As these notions are incorporated into statutory law, there seems to be little room left for public policy and morality as a separate category. This does not apply, however, to the notion of reasonableness and fairness of art. 2:8 BW. It is the cornerstone of the protection of minority shareholders under Dutch corporate law.20 First, as mentioned above, a minority shareholder may apply for annulment of a resolution of a company s organ if it is in breach of reasonableness and fairness, according to which the company and all involved have to behave. This may even set aside a resolution which is in compliance with provisions in the company s articles. Secondly, acting in breach of reasonableness and fairness may constitute or contribute to mismanagement , whereupon the Enterprise Chamber may take the above-mentioned measures against the company.21 Thirdly, there is a certain notion of reasonableness and fairness incorporated in the dispute settlement procedure (artt. 2:335-343 BW). One or more shareholders of a private company who represent at least one third of the share capital may instigate proceedings at a district court (rechtbank) against any other shareholder who conducts himself in a manner unfairly prejudicial to the company s interest in order to obtain a compulsory transfer of his shares. Reversely, a shareholder whose interests are damaged by the conduct of one or more other shareholders in such a way that he can no longer reasonably be required to continue being a shareholder, may demand to be bought out at a fair price. Whereas Dutch corporate law is visibly permeated with reasonableness and fairness, public policy and morality lead a more hidden existence. The latter notions do arise when the validity of shareholders agreements is at stake. 5 The different status of clauses in the articles and of shareholder agreements A general statutory provision on shareholder agreements does not exist in Dutch corporate law. Just as the articles of association, shareholder agreements find their limits in art. 3:40 BW: mandatory law, public policy and morality. Shareholder agreements are subject to contract law provisions such as fraud, duress and mistake. Whereas the articles of association have to comply with mandatory corporate law, it is uncertain how far mandatory corporate law affects the validity of shareholder 19. Cf. TIMMERMAN, Waarom hebben wij dwingend vennootschapsrecht?, in: Ondernemingsrechtelijke Contracten, uitgave vanwege het Instituut voor Ondernemingsrecht deel 14, Deventer 1991, p. 1 ff. 20. DE KLUIVER, The European Private Company? A Dutch Perspective, in: The European Private Company?, De Kluiver, Van Gerven (eds.), Antwerp 1995, p. 122 ff. 21. Ondernemingskamer 11 March 1999, Nederlandse Jurisprudentie 1999, 351 (Breevast). Ondernemingskamer 27 May 1999, Nederlandse Jurisprudentie 1999, 487 (Gucci). Implicit Hoge Raad 9 July 1990, Nederlandse Jurisprudentie1991, 51 (Sluis). Crit. DORRESTEIJN, t.a.p., p. 648