THE ARTICLES OF ASSOCIATION OF A DUTCH CARIBBEAN LEGAL ENTITY (II)

November 09, 2009 4:17 AM

Limitations on the applicability of provisions

As a general matter of Netherlands Antilles law, the interpretation of terms contained in legal documents, such as the articles of association and the by-laws, however only to a certain extent, inter alia subject to the intention of the parties, and the enforcement thereof, is subject to the overriding principle of “fairness and reasonableness” (in Dutch: “redelijkheid en billijkheid”) meaning that under certain circumstances a term of the articles of association or by-laws may not be applicable in so far as this term would in such circumstances be contrary to this principle.

According to article 2:7 paragraph 2 Netherlands Antilles Civil Code, any rule or decision imposed on a person involved in the organization of the legal entity by law, custom, the articles, by-laws, a resolution or contract will not apply to the extent, in the given circumstances, that this would be unacceptable according to the principles of reasonableness and fairness.

The concept of good faith (principles of reasonableness and fairness) permeates all branches of the Netherlands Antilles law on obligations, contract law and corporate law. According to the Explanatory Memorandum, a thorough investigation into the legal regulations and the factual circumstances is required in each case.

Karel Frielink
Attorney (Lawyer) / Partner

November 2009