Demanding access: the lesson learned from Essilux/GrandVision

It is not unusual in disputes that one party knows that the other party has a certain document in its possession that it will not allow the other party to inspect: a document containing information that might improve its negotiating position if it had access to it. But how can that access be obtained if the other party is uncooperative?

The law offers a solution. Article 843a of the Dutch Code of Civil Procedure sets out the obligation to produce exhibits. That article allows a party to demand access to documents in the other party’s possession. This submission obligation is an ideal way of gaining an impression of, for instance, the chances of success in a legal action or the outcome of an investigation.

But the claimant must have a legitimate interest in accessing those documents. Moreover, the party that has the documents in its possession is not required to comply with the demand if compelling reasons so oppose, in light of the risk of a party fishing for information, known as the “fishing expedition”. The abovementioned judgment passed in August in the case of eyeglass companies Essilux and GrandVision answered the question whether a fishing expedition was involved.

Essilux is a listed company that operates on the optics market. It acquired a majority share in GrandVision (the parent company of Pearl, among others) in 2019. The share transfer was subject to the fulfilment of certain conditions. The agreements provided, for instance, that GrandVision required Essilux’s permission to enter into contracts that did not form part of the customary operations.

The coronavirus forced GrandVision to change its day-to-day policy in order to safeguard its continuity. It requested Essilux to approve certain measures. Essilux refused to give that approval because it wished to receive a great deal of (additional) information first. Essilux ultimately sought  access to that information on the basis of the obligation to present exhibits.

GrandVision argued that Essilux’ request amounted to an unlawful fishing expedition because almost all the documents in question are related to vital divisions of Grandvision. They were furthermore strategically relevant, sensitive and confidential documents. If the claim was granted, Essilux would have access to the business practice of a competitor’s business, as a result of which the acquisition might have been called off.

The court accepted GrandVision’s defence and ruled that Essilux would be unreasonably advantaged if its claim was granted. If it were given access to the documents, sensitive and confidential information might be disclosed, which could not be undone. In addition, Essilux had insufficiently explained which documents it needed, therefore, the court could not assess the impact that the measures would have on the share transaction. The court therefore found that the claim amounted to a fishing expedition and dismissed the claim.

The obligation to present exhibits set out in Article 843a of the Dutch Code of Civil Procedure can be an excellent means of gaining access to documents. But the success of the claim is dependent on various factors and on a specific definition of the request, as the dismissal of Essilux’ claim has shown.

If you wish to gain access to certain documents but are uncertain of the chances of success, please contact Pieter Verloop (+31-6-57891113) and Sara Karem (+31-6-53271319).

This article was published in the Newsletter Vestius of October 2020