Netherlands – Courts Voting Rights’ Agreement

Netherlands – Courts Voting Rights’ Agreement

On 24 August 2022, NLD Courts ruled shareholders' voting agreement legal.

  • NLD Courts ruled on agreement between shareholders to exercise their voting rights in the event of a tie in accordance with advice to be obtained from third parties.
  • Supreme Court ruled the above in context of action re legality of the said agreement.


  • In context of claimant seeking cassation of judgment rendered on October 1943 by Court of Appeal in Arnhem between the parties; parties represented at the High Council.
  • Decision challenged by ground of appeal: violation and misapplication of articles of Law of May 1829, Civil Code, Civil Procedural Code, Commercial Code; more details.

Reasoning and Decision

  • 2 shareholders with equal rights (as hold same number of shares, other shareholders do not exist, since these holdings are entire capital of public limited company) can commit themselves in advance in event of a tie in their votes at the general meeting.
  • To follow binding advice on difference that arose between them, cast vote accordingly.
  • In circumstances outlined it is extremely practical arrangement that law does not ban.
  • The plea was based on the assumption that conclusion of all agreements concerning exercise of voting rights must be regarded as immoral but that is inadmissible.
  • If assumed, as plea does, shareholder should exercise voting right in limited liability company's interest and not own, commitment in event of tie towards binding advice, indicates they assumed if own interests clashed company should not suffer as result.
  • Court stated fact that free exercise of shareholder's voting rights in general meeting is indirectly restricted by contractual obligation does not automatically mean is immoral.
  • Shareholder in voting rights granted to him is not entrusted with a right in the interest of others but has been given a right of his own to serve his interest in the company.
  • Entails, per freedom to exercise right to vote as sees fit, provided does not degenerate into abuse of rights, is also free to contractually bind his right to vote towards others.
  • If not done in way or per circumstances that would lead to socially unseemly results.
  • Plea merely has incorrect assertion, that agreement in itself, already because it serves to nullify shareholder free voting right would be invalid on account of illicit cause.
  • The plea is unfounded and cannot lead to cassation thus it was dismissed; plaintiff was ordered to pay the costs of proceedings in cassation until this judgment; more details.