Minority Shareholders’ Enforcement of Corporate Governance in Takeovers: An English Law Perspective on the Belgian Fortis Bank Case

The Fortis Bank takeover court case demonstrates how shareholders’ claims can make a merger and takeover case less speedy and, indeed, more costly. The case also raises a number of legal issues relating to corporate governance in a takeover situation such as the role of minority shareholders, the role of the state vis-à-vis the board in a financial rescue plan, the effectiveness of a soft law-based corporate governance code, and the balancing role of the judiciary between economic-market efficiency and social-legal justice in intervening in a financial takeover. The case reveals the divergent views taken by the two Belgian courts — the Commercial Court of Brussels and the Court of Appeal — towards shareholders’ enforcement of corporate governance in a takeover.

This article uses a comparative method, by examining the legal issues related to corporate governance raised in this case from the English law perspective. The objectives are to 1) determine whether the issues would have been dealt with differently under English law; 2) whether such differences would be the results of different legal bases such as legal principles or rules; 3) whether such differences would be the results of different applications of the principle; and 4) finally, whether there are lessons to be learned from the comparative study of this case