# A conflict of interest was not declared before the vote with bank financing already in place
A resolution adopted with an undeclared conflict of interest can be repaired by ratification or challenged before the competent Dutch court; the choice narrows once a bank has already advanced funds on the strength of it. This brief sets out both routes, what each costs in time and fees, and the deadline that is now running.
What happens if you do nothing
If nobody acts, the resolution stands and the drawn financing continues to run on that footing. The conflicted party keeps whatever benefit the resolution conferred, and the corporate file keeps an unresolved defect at the heart of a decision the bank relied on. A shareholder, a fellow director, or in some structures the company's own supervisory body, may later invoke the defect, and the further the financing has progressed, the more there is to unwind if that happens. Doing nothing is a decision in itself: it fixes the current position as the baseline against which every later step is measured, and it leaves the exposure sitting inside a Dutch entity's corporate governance and bank financing arrangements at once.
This is squarely a question for corporate law and governance, not a bank-facility question alone, because the defect sits in the resolution, not in the loan documentation.
The routes
| Route | What it takes | Time | Cost driver | What it gives you |
|---|---|---|---|---|
| Ratify with full disclosure | Reconvene the corporate body, disclose the conflict in full, re-adopt the resolution | Weeks, entirely internal | Internal governance time, no court fee | A clean resolution; the financing continues undisturbed |
| Contest the resolution before the courts | A shareholder or director brings the resolution before the competent Dutch court on grounds of the undeclared conflict | Months, longer where the bank or the conflicted party contests the claim | Court fee for a civil claim plus counsel's time, conducted with Dutch-qualified counsel of record | A binding ruling on validity, which the facility documents then have to accommodate |
| Inquiry request to the Enterprise Chamber (Ondernemingskamer) | An eligible shareholder, or the company itself, asks the Chamber to examine the policy and conduct behind the resolution | Longer horizon, and the proceedings become public once opened | Court fee plus the cost of the onderzoeker (investigator) appointed by the Chamber, usually advanced by the company | An independent finding on the conduct, and interim measures where the Chamber grants them |
What decides between them
The first question is whether the bank has already relied on the resolution to advance funds, and whether the facility agreement's representations assume the resolution is valid. If the conflicted director still sits on the board, correction without removal leaves the same person voting on the next related matter, which points toward the court route rather than a quiet ratification. Where the resolution is one instance in a broader pattern, for example alongside a director appointed without the right formalities under the same financing, the inquiry route addresses the pattern rather than the single vote. Where the shareholders simply want the financing to continue on a sound footing and have no wider grievance, ratification is the faster and cheaper answer under Dutch law.
The deadline that runs
A short limitation period applies to challenging a corporate resolution on grounds of an undeclared conflict, and the clock is generally understood to start running from adoption or from the point the affected party became aware of the defect. This has been the subject of interpretation in practice, so check the current position under the applicable Dutch rules before you rely on any specific date. A lapsed period closes the litigation route even where the underlying conflict is not in doubt, which makes the date itself, not the merits, the first thing to fix.
Evidence to secure now
Before choosing a route, gather the minutes of the meeting and any correspondence circulated before it, the record showing whether disclosure was made and in what terms, the facility agreement's representations and conditions precedent tied to the resolution, correspondence with the bank around drawdown, and a register extract showing who sat on the board at the relevant date. Each of these either supports ratification or feeds directly into a court filing, so nothing here is wasted whichever fork you take.
Cost drivers
Ratification carries no court fee, only internal time to reconvene and re-adopt. A court challenge carries the court fee for the type of claim and the time of Dutch-qualified counsel of record, who conducts the matter; an inquiry adds the cost of the onderzoeker's work, typically advanced by the company. None of these costs scale with the size of the financing itself; they scale with how contested the underlying facts turn out to be.
What we would do in the first week
We would pull the full paper trail, minutes, disclosure record and facility conditions, check whether the facility agreement's representations are still accurate given the defect, establish whether the conflicted party still votes on the board, and fix the limitation date before advising on a route. A structure report against the commercial register gives the ownership and board picture that this decision depends on, and it is the natural first order once the paper trail is assembled.
What this does not cover
- The foreign parent's own conflict-of-interest rules, where a cross-border holding move raises separate exit-charge questions of its own.
- The bank's own remedies under the facility agreement, including covenant breach and acceleration, which sit outside Dutch corporate law entirely.
- Any criminal exposure of the conflicted director, which follows a different route from the corporate-law fork set out here.
- Sector-specific director exposure, addressed separately for structures such as those covered in the director exposure position for energy and renewables.
Questions
Does the bank need to be told before you choose a route?
Not as a matter of Dutch corporate law itself, but most facility agreements require notice of anything affecting the validity of the resolution behind the drawdown. Check the facility agreement's own notice and representation clauses before you act, independently of which corporate-law route you choose.
Can the resolution be fixed without touching the financing?
Ratification with full disclosure is designed to do exactly that: it repairs the resolution going forward without reopening the drawdown, provided the facility agreement does not separately require notice of the original defect once discovered.
What if the conflicted director has since left the company?
Departure does not cure the defect in the resolution itself; the same routes remain open. The practical urgency changes, since the conflicted party no longer has ongoing influence over the board, but the limitation clock keeps running regardless.
Reviewed by Eva Kuipers, governance and the Enterprise Chamber (Ondernemingskamer). Eva works on board disputes, resolution defects and inquiry proceedings for Dutch entities with foreign shareholders or foreign-facing financing.
If ratification or a court challenge changes the ownership or board picture, that is also the point to revisit the entity's structure through the holding formation service before the next resolution is drafted. A worked answer on the specific fork facing your entity, and what a Dutch court would need to see, is available as a route note once the paper trail above is assembled. Where the ownership chain sits partly outside the Netherlands, a comparable ownership chain report for Belgium shows what a parallel register check would add.
Last legal review: 2026-09-30