19 January 2022
EU court addresses Blocking Statute's Catch-22, but important questions remain
The Blocking Statute prohibits EU persons from complying with certain US sanctions against Cuba and Iran. In its first ever preliminary ruling on the topic, the CJEU found that the termination of a contract that violates this prohibition does not necessarily need to be annulled if this would have a disproportionate effect on the terminating party. This ruling seems to somewhat ease the dilemma of EU companies that want to end contracts to avoid potentially severe US sanction enforcement measures. How this will work out in practice remains to be seen. But companies terminating contracts to comply with US sanctions may still face other measures, such as monetary penalties, that aim to protect the interests of the affected counterparties to a contract.18 January 2022
New debt restructuring scheme in Netherlands now automatically recognised EU wide
A recent amendment of the European Insolvency Regulation recast (EIR recast) means that the public version of the "WHOA", also known as the Dutch scheme, falls in the regulation's scope as of 9 January 2022. This is relevant for cross-border restructurings, most notably because the effect of a public Dutch scheme will be automatically recognised in the EU (except for Denmark and Ireland, which are not parties to the amendment). Given that the Dutch scheme provides great flexibility in the design of the restructuring plan and offers various tools to reach a consensual deal with a qualifying majority of creditors, automatic recognition will make the public version a powerful cross-border restructuring tool. The Dutch scheme's private version remains outside of the EIR recast's scope, but might be recognised based on other treaties or domestic private international law.22 December 2021
Monitoring Committee report: a new perspective on "comply-or-explain" reporting?
The Corporate Governance Monitoring Committee has published its report on compliance with the Corporate Governance Code by Dutch listed companies for financial year 2020. This year, the Monitoring Committee has focused on the quality of reporting on the Code's five key themes. The Committee investigated to what extent companies provide insight in how they have complied with the Code's principles and best practices when it comes to these themes. Based on the advice the Committee seems to provide about the scope of the Code's "reporting provisions", companies are expected to also provide insight on how they complied with the Code's "conduct-related provisions" that apply on a comply-or-explain basis. The Committee encourages boards to provide more insight into the relevant dilemmas and challenges they faced in complying with the conduct-related provisions, how these were addressed, and how this has impacted the business.