A conflict of interest was not declared — 50/50 JV

# A conflict of interest was not declared before the vote in a fifty-fifty joint venture

When a director's conflicting interest was not declared before a vote in a fifty-fifty joint venture, you have two statutory routes and one contractual route open to you: challenge the resolution's validity, bring the matter to the Enterprise Chamber, or trigger the deadlock or exit mechanism in the joint venture agreement. Which one fits depends on whether you need the vote undone or the governance itself changed.

This page is written for the party on the other side of that vote under Dutch law: the co-shareholder, the director who was outvoted, or the fund holding the minority-in-substance half of a nominally equal structure. It does not tell you who will win. It tells you the fork, what each branch costs in time, and the clock that is already running against you.

What happens if you do nothing

The resolution stands. Until it is set aside, a resolution passed with an undeclared conflicting interest remains valid and binding on the joint venture and on both shareholders. The conflicted director's vote continues to count toward every subsequent decision built on it, and the counterparty's practical control over the venture consolidates with every board meeting that follows. Meanwhile the period within which you can still challenge the resolution keeps running, and the paper trail that proves when you found out about the non-disclosure gets thinner the longer you wait, because emails get deleted and memories fade in exactly the way courts discount.

The three routes

Route	What it takes	Time	Cost driver	What it gives you
Challenge the resolution's validity	A claim against the joint venture company, addressed to the civil court with jurisdiction (or an arbitral tribunal if the joint venture agreement provides for one), setting out the undeclared interest and the defect it caused	Months to over a year, longer if the other side contests the facts around disclosure	Court registry fee tied to the value of the claim, and the volume of evidence work needed to reconstruct what was and was not disclosed	The resolution set aside or upheld, with retroactive effect on what was decided
Enterprise Chamber inquiry proceedings	A request to open an inquiry into the joint venture's policy and the conduct of those running it, with immediate measures if the situation cannot wait for a full inquiry	Weeks for interim measures, months for the substantive inquiry	The scope of relief requested and whether immediate measures are sought alongside the inquiry itself	An independent evidentiary record, and governance measures such as suspension of the director or appointment of an independent manager
The deadlock or exit mechanism in the joint venture agreement	Notice under whatever deadlock, put-call, or expert-determination clause the agreement actually contains	As fast as the agreement's own notice periods allow, if the clause is well drafted	The valuation exercise the exit mechanism triggers, and the negotiation it generates	An exit from the venture rather than a ruling on the vote itself

What decides between them

Start with what you actually need. If the resolution's subject matter still matters, a distribution, a capital call, a sale of an asset held inside the venture, the route that reverses it is the challenge to its validity. If what matters is that the conduct not repeat, the Enterprise Chamber route produces a governance measure that a private annulment claim cannot.

The strength of your evidence on the non-disclosure itself decides the timeline you should expect. A documented disclosure obligation that was plainly not met moves faster than a dispute over what counted as a conflicting interest in the first place.

Check whether the joint venture agreement gives you a workable deadlock or exit clause before you assume you need a court at all. Where the governance structure already provides a buy-sell or Russian-roulette mechanism, triggering it is often faster and cheaper than litigating the vote, though it ends the venture rather than correcting it. Where the relationship is not salvageable regardless of who is right about this vote, the exit route is often the honest answer even when you would win a challenge.

The deadline that runs

Under the applicable Dutch rules, an action to have a defective resolution annulled must be brought within a limited period that starts running from the moment you knew, or reasonably should have known, of the resolution and of the ground on which you challenge it. No confirmed period is available to state here as a figure. Treat this as a short window, calendar the date you first learned of the non-disclosure now, and have that date verified against the current position before you rely on it in any filing.

Evidence to secure now

Preserve the board minutes and the agenda for the meeting at which the vote was taken, together with whatever was circulated to shareholders and directors beforehand. Secure any correspondence, email or otherwise, that shows what the conflicted director knew and when, and whatever record exists of the disclosure that should have been made and was not.

Pull the shareholders' register and the joint venture agreement itself, with particular attention to its conflict-of-interest, deadlock and exit clauses. Gather the calendar entries and correspondence that fix the date you personally became aware of the non-disclosure, because that date is what starts the limitation clock running against you and is the first fact any counterparty will contest.

Cost drivers

No published figure is available for this row, and none is estimated here. What drives the total is structural rather than a fixed number: the court registry fee is set against the value attributed to the claim, the volume of hours needed to reconstruct the disclosure record grows with how contested the facts are, and a request for immediate measures before the Enterprise Chamber adds a separate procedural track. Where documents sit in Dutch, translation adds a further, separate line. None of these convert into a rate: hours are a volume, not a price.

What we would do in the first week

Fix the date you learned of the non-disclosure and diarise it, because that date decides how much runway remains. Pull and preserve the minutes, the disclosure trail, and the joint venture agreement's governance and exit clauses before any of it becomes harder to obtain.

Form a preliminary view on whether the vote's outcome is worth reversing or whether an exit is the better commercial answer regardless of the legal merits. If the position looks urgent, prepare the ground for immediate measures rather than waiting for the substantive route to run its course. Any court step from here is conducted with Dutch-qualified counsel of record.

What this does not cover

The tax consequences of unwinding a resolution or of an exit under a deadlock clause.
Any jurisdiction other than the Netherlands, even where the joint venture holds assets abroad.
Criminal exposure connected to the non-disclosure, which is a separate question from the resolution's validity.
A damages claim against the conflicted director personally for breach of duty, which runs on its own footing.
The specific wording of your joint venture agreement, which this page has not seen and cannot assume.

Questions

What counts as a conflicting interest that had to be declared before the vote?

Under the applicable Dutch rules, a director with a personal interest that conflicts with the joint venture's interest in the matter being decided is expected to disclose it and, depending on the governance structure in place, to abstain from the deliberation and the vote. Whether a given interest crosses that line is fact-specific and is assessed case by case.

Can the other shareholder ratify the resolution after the fact and close off the challenge?

A subsequent confirmation by the shareholders can, in some circumstances, cure a defect in how a resolution was reached, but this depends on the nature of the defect and on the governance route chosen, and it does not automatically extinguish a claim already accrued. Treat any purported ratification as a fact to be tested, not a bar to be assumed.

Does the Enterprise Chamber route work for a private joint venture that is not listed?

Yes. The Enterprise Chamber's inquiry jurisdiction is not limited to listed companies and regularly deals with disputes inside privately held structures, including fifty-fifty joint ventures, where the conduct of those running the entity is in question.

Author

Sanne de Wit, Structures, holding and tax. She works on how joint venture and holding structures are documented, governed and unwound when the paper and the practice diverge.

For governance disputes of this kind, our board and governance service sets out the route in writing before you commit to one. A related governance question, a director appointed without the right formalities in a joint venture, often surfaces alongside this one. Where the venture also sits inside a wider group, a group reorganisation triggering real estate transfer tax can be the reason the vote mattered in the first place. Before any step, a structure report sets out the current ownership and governance chain of the joint venture as it is recorded, which is the first document any of the three routes above will need.

Last legal review: 2026-09-30