Attribution of a director's knowledge to the company
What a director knows counts, in principle, as the company's knowledge. In special circumstances, the position may be different. That rule defeated a Curaçao company that wanted to escape a remuneration package its director had agreed with himself. It argued that it had been mistaken, but what he knew, it knew too. The Supreme Court upheld that ruling on 9 October 2026. The case shows how far the rule reaches, and when a director's knowledge does not count.
Director agrees a remuneration package with himself on the sale
Seguros Muskus N.V. runs an insurance brokerage in Curaçao. Its managing director was also its ultimate owner. On 26 September 2014 all shares were transferred to a new owner. On the same day that new shareholder recorded in a resolution that the director would become an adviser for two years on his old salary. After that he would receive his pension with fixed allowances. The company would continue to pay the health insurance for him and his wife for life, and he kept a right to a car. According to the court, he had also agreed that package orally with the company while he was still its director. He stepped down as director at the end of September 2014; his work as an adviser ended in 2016. He later claimed performance. The company invoked mistake and claimed that he was liable for mismanagement (opinion of the Advocate General 19 June 2026, paras 1.6-1.8 and 2.1-2.2; Joint Court of Justice 27 August 2024, paras 3.9-3.10).
Court of appeal: the director's knowledge was the company's
The court of first instance declared the resolution void and ordered the director to repay more than NAf 676,000; it dismissed the claim for mismanagement (Joint Court of Justice 27 August 2024, para. 3.5). The Joint Court of Justice, the appeal court for the Caribbean parts of the Kingdom, ruled otherwise on the arrangement, giving brief reasons. The arrangement had been made between the director and the company while he was its director. What he knew at the time therefore also counted as the company's knowledge. Mistake could then only be common mistake (wederzijdse dwaling): both parties must have proceeded on the same incorrect assumption. The company did not argue that the director himself had proceeded on a wrong assumption, so the claim of mistake failed (Joint Court of Justice 27 August 2024, para. 3.11).
In its final judgment the Joint Court added the standard: in principle, a director's knowledge counts as the knowledge of the legal entity according to prevailing views in society (maatschappelijk verkeer), but in special circumstances the position may be different. The company argued that it had only discovered the mistake later, by which, according to the Joint Court, it meant that the new owner discovered it later. That circumstance alone was not special enough, partly because it had not been established that the director had failed to inform the new owner adequately (Joint Court of Justice 27 May 2025, paras 3.8 and 3.10).
The director had a conflict of interest, as he stood on both sides of the arrangement. The Joint Court considered that he therefore had to inform the general meeting of shareholders, and found that this had happened: the resolution of the sole shareholder recorded the arrangement itself (Joint Court of Justice 27 August 2024, para. 3.14). That statutory duty to report had already been abolished in Curaçao in 2012, Advocate General Assink noted. That did not help the company: without that duty the director was bound to do less, and he had informed the shareholder in any event (opinion of the Advocate General 19 June 2026, paras 3.49-3.52). The Joint Court further assumed that, as director, he was entitled to represent the company; the company did not dispute this (Joint Court of Justice 27 August 2024, para. 3.10).
Under Dutch law, a director of a private limited company (BV) who has a conflicting personal interest does not take part in the deliberations and decision-making. If the board cannot decide as a result, the supervisory board decides or, if there is none, the general meeting (Section 2:239(6) DCC). That rule leaves his authority to represent the company unaffected.
The Joint Court also rejected the claim that he was liable for mismanagement. In its interim judgment it had been critical of the director, but the company then asserted too little to support a finding of serious reproach. It had to pay more than 162,000 Caribbean guilders and continue to perform the arrangement (Joint Court of Justice 27 May 2025, para. 3.8 and operative part). The Supreme Court dismissed the appeal in cassation with the summary reasoning it uses when assessing the complaints requires no answer to questions of importance for the uniformity or development of the law. Advocate General Assink had explained in his opinion why the Joint Court's ruling should be upheld (Supreme Court 9 October 2026; opinion of the Advocate General 19 June 2026, paras 3.34-3.37).
The general rule: what the director knows, the company knows
The Joint Court took the rule from the Supreme Court's judgment in Treston/HDI: in principle, the nature of the position of director of a legal entity means that his knowledge counts, according to prevailing views in society, as the knowledge of the legal entity, although in special circumstances the position may be different (Supreme Court 11 September 2020, para. 3.2.2). Where the counterparty's reliance is at issue, the question is whether it was entitled to assume that the company knew (Supreme Court 11 March 2005, para. 3.4.2). For a director, attribution is the starting point; for others, it depends on the circumstances. According to Advocate General Valk, the purpose of the rule for which the knowledge matters, and the interests at stake, also count (opinion of the Advocate General 6 March 2020, para. 3.5).
Knowledge can reach the company in two ways. The first is the statute: in a juridical act performed through an authorised representative, the knowledge of the principal, of the representative or of both counts, depending on each one's share in bringing about the act and determining its content (Section 3:66(2) DCC). That may also apply where the counterparty could only rely on the representative's apparent authority (Supreme Court 29 March 2019, para. 3.3.2). For a director, that rule applies at most by analogy, because Section 3:78 DCC refers only to paragraph 1 (opinion of the Advocate General 6 March 2020, para. 3.7). The second way is the standard of prevailing views in society, and for that, authority to sign is not a requirement. In the 2019 case, the knowledge of someone without formal authority, who according to the counterparty in fact ran the advisory firm, could thus count as well (Supreme Court 29 March 2019, para. 3.4.2).
Conversely, authority to represent does not automatically lead to attribution, Valk wrote in relation to the limitation of a damages claim (opinion of the Advocate General 6 March 2020, para. 3.7). A useful distinction comes from Katan's 2017 doctoral thesis, as summarised by Advocate General Wissink. In a standard case, the person with the knowledge acted for the legal entity himself, or was involved in the act. The knowledge of a director or of a person who in fact determines policy (feitelijk beleidsbepaler) can then in principle be attributed automatically. In a case of fragmented knowledge, the person acting does not know, but someone else within the organisation does. The position is then more nuanced, and the duty to organise is decisive above all: should the legal entity have managed the risk that knowledge becomes fragmented through the division of tasks (opinion of the Advocate General 11 January 2019, para. 3.12.1)? In the Curaçao case, the director who knew made the arrangement himself.
When the director's knowledge does not count
Treston/HDI also shows when the exception applies. Two directors and a supervisory director of the insurer HDI had a financial interest of their own in the structure under which Treston took over HDI's Aruban portfolio for 1 Aruban florin. They reported this to neither their fellow directors, the supervisory board nor the shareholder. Treston knew of those interests and, for its own advantage, helped keep the rest of HDI unaware of them, to prevent HDI from taking action. The Supreme Court upheld the ruling of the court of appeal that, in that relationship, the knowledge of the three did not count as HDI's knowledge, so that limitation of its claim against Treston had not yet begun (Supreme Court 11 September 2020, paras 2.1 and 3.2.3-3.2.4). The opposite view, according to Advocate General Valk, would amount to a facility for directors who act improperly and for third parties who act unlawfully with them (opinion of the Advocate General 6 March 2020, para. 3.4).
The Curaçao case differed materially, Advocate General Assink wrote, partly because the director had reported his conflict of interest to the shareholder (opinion of the Advocate General 19 June 2026, para. 3.37). A conflict of interest alone was not enough there. In Treston the exception rested on concealment from the rest of the company, with a counterparty that cooperated in it for its own advantage. Whether the exception applies must be examined case by case (opinion of the Advocate General 19 June 2026, para. 3.34).
What does this mean for companies, buyers and counterparties?
A company that wants to challenge an agreement because it did not know something must first look at what its director knew. If he knew it, then in principle it knew it too. That remains the case, in principle, after a takeover: in the Curaçao case a later discovery by the new owner was not enough on its own. A buyer would therefore do well to check before the transfer what the departing director has agreed with himself, and to negotiate warranties on it. The Joint Court also attributed to the company what its new ultimate owner knew or ought to have known after proper investigation, at least from the takeover. It did so when assessing whether the director was seriously to blame, and the Advocate General saw no error of law in this (Joint Court of Justice 27 May 2025, para. 3.7; opinion of the Advocate General 19 June 2026, paras 3.81-3.82).
A counterparty that invokes the company's knowledge need, in principle, show no more than that a director knew. It is then for the company to put forward special circumstances. Treston shows what these may look like: directors who hid something from the rest of the company, with a counterparty that cooperated in it. This also matters for limitation. A claim for damages becomes time-barred five years after the injured party has become aware of both the damage and the person liable, and at the latest twenty years after the event (Section 3:310(1) DCC). For a company, what its directors know in principle counts for that purpose.
What a director knew when he himself acted for the company remains, in principle, its knowledge, also after a takeover. Anyone who wants that knowledge left out of account must point to special circumstances, such as directors who, together with the counterparty, hid something from the company.
Frequently asked questions
Does the knowledge of an employee or intermediary also count as the company's knowledge?
Not automatically. The decisive question is whether, according to prevailing views in society, that knowledge counts as the company's knowledge, and that depends on the circumstances, including what the counterparty was entitled to assume. When a commercial agent heard something in an exploratory conversation and did not pass it on, his principal did not automatically bear the risk of that failure of internal communication (Supreme Court 11 March 2005, paras 3.4.2-3.4.3). For someone who runs the business in practice, that may be different (Supreme Court 29 March 2019, para. 3.4.2).
Does the limitation period start to run if only the director knows of the damage and the person liable?
In principle, yes, because his knowledge counts as the company's knowledge. In Treston/HDI an exception was upheld: the directors who knew kept it hidden from the rest of the company with the cooperation of the counterparty, and the period for the claim against that counterparty therefore did not run (Supreme Court 11 September 2020, para. 3.2.4). For a claim by the company against its own director, a period that would expire during his term or within six months after it continues until six months after he leaves (Sections 3:320 and 3:321(1)(d) DCC). That extension does not make his knowledge the company's knowledge (Supreme Court 11 September 2020, para. 3.3).
Can a company annul an arrangement with its own director for mistake?
In principle only if the director himself was also mistaken, because his knowledge counts as the company's knowledge, unless special circumstances prevent attribution. In the Curaçao case only common mistake therefore remained, and the company did not argue that the director had been wrong (Joint Court of Justice 27 August 2024, para. 3.11).
Cited case law
Supreme Court: ECLI:NL:HR:2026:1634 (Seguros Muskus, 9 October 2026; appeal in cassation dismissed under Section 81 of the Judiciary Act); ECLI:NL:HR:2020:1413 (Treston/HDI, 11 September 2020, paras 3.2.2-3.2.4 and 3.3; a director's knowledge counts in principle as the legal entity's knowledge; the ruling that this did not apply against a counterparty that cooperated in concealing the conflict of interest, so that the limitation period against it did not start to run, was upheld; the extension ground of Section 3:321(1)(d) DCC does not make a director's knowledge the legal entity's knowledge); ECLI:NL:HR:2019:467 (29 March 2019, paras 3.3.2 and 3.4.2; attribution through Section 3:66(2) DCC or through prevailing views in society, also without authority to represent); ECLI:NL:HR:2005:AR7344 (Idee 2, 11 March 2005, paras 3.4.2-3.4.3; knowledge of a commercial agent, the principal does not automatically bear the risk of a failure of internal communication).
Opinions: ECLI:NL:PHR:2026:614 (Advocate General Assink, 19 June 2026, paras 3.34-3.37 and 3.49-3.52; the Treston exception requires a case-by-case examination, and this case differs materially, partly because the director had informed the sole shareholder); ECLI:NL:PHR:2020:283 (Advocate General Valk, 6 March 2020, paras 3.4-3.7; the Supreme Court followed the outcome; attribution of knowledge is not a uniform doctrine, the purpose of the rule and the interests involved also count, and Section 3:66(2) DCC applies to directors at most by analogy); ECLI:NL:PHR:2019:127 (Advocate General Wissink, 11 January 2019, paras 3.10-3.13; framework and factors from the literature on attribution of knowledge; the Supreme Court did not follow the opinion); ECLI:NL:PHR:2005:AR7344 (Advocate General Verkade, 19 November 2004, para. 4.7; the test is whether the counterparty was entitled to assume, in the light of prevailing views, that the officer's knowledge was also the organisation's knowledge).
Courts of appeal: ECLI:NL:OGHACMB:2024:162 (Joint Court of Justice, 27 August 2024, paras 3.11 and 3.14; the knowledge of a director in an arrangement with himself counts as the company's knowledge, so that only common mistake remains); ECLI:NL:OGHACMB:2025:116 (Joint Court of Justice, 27 May 2025, paras 3.8 and 3.10; a later discovery by the new owner alone is not a special circumstance; directors' liability claim dismissed for want of sufficient factual assertions).