Preliminary hearing of witnesses on appeal

Why this topic matters to your business

Acquisition of a business is all about information. As a buyer, you want to know exactly what you are buying, and as a seller, you guarantee the accuracy of certain facts. But what if, after the takeover, it turns out that essential information was withheld? And what if the court in first instance rejects your claim without giving you a chance to hear witnesses? The Amsterdam Court of Appeal handed down an order on 27 January 2026 that shows that the preliminary witness examination on appeal can be an effective means of strengthening your evidentiary position, even when the first court did not allow for it. This ruling is important for any company involved in an acquisition dispute or proceedings concerning warranties and liability from a purchase agreement.

The case: a €75 million takeover and a concealed risk

The order of the Amsterdam Court of Appeal of 27 January 2026 revolves around the purchase of all shares in a company for over €75.4 million. The buyer and seller had entered into a share sale and purchase agreement on 20 October 2020. Under that purchase agreement, the seller had provided certain information guarantees to the buyer. In addition, the buyer had taken out so-called Warranty & Indemnity insurance (W&I insurance) with three foreign insurers. With that insurance, the buyer had insured the risk of breaches of the warranties by the seller, up to a maximum coverage amount of €40 million.

After the acquisition, it turned out that the acquired company's largest customer had plans to carry out certain activities itself, so-called insourcing plans. Those plans eventually led to this customer terminating its relationship with the acquired company in 2023. The buyer argued that the seller was aware of these plans and their serious financial consequences prior to the conclusion of the purchase agreement, but that the seller had failed to share this information. According to the buyer, this constituted a breach of the information guarantee in the purchase agreement, resulting in the shares being worth significantly less than the purchase price paid.

First instance: claim dismissed, no opportunity for witness evidence

The buyer commenced court proceedings in April 2023 and claimed, among other things, a declaratory judgment that there was a breach of guarantee, plus payment of the full cover amount of €40 million. The insurers refused payment and sued the seller in indemnity. By judgment of 26 March 2025, the court dismissed all claims. The court ruled that the seller had not breached the warranty and therefore there was no claim against the insurers. Interestingly, the court did not give the buyer the opportunity to further prove its contentions by hearing witnesses.

Appeal and request for preliminary witness hearing

The buyer appealed and also filed a petition under Article 196 of the Code of Civil Procedure (Rv). Since 1 January 2025, the Simplification and Modernisation of Evidence Act has been in force. Under this new regulation, a party can request the court to order a preliminary examination of witnesses, including at the stage before the substantive debate on appeal. The application was filed on 9 May 2025, well before the main case was registered on the court's roll on 22 July 2025. The application was thus timely.

The buyer's main objective with the witness hearing was to obtain clarity on what exactly the seller knew about the insourcing plans, what impact those plans had on the acquired company and why the seller had not shared this information. The aim was to use the witness statements to better formulate the grievances on appeal and strengthen the evidential position.

The court's verdict: award with bounded evidentiary issues

The insurers and the seller opposed the application. They argued that the buyer had no interest in the witness examination, that the request was contrary to due process and that there was an abuse of discretion. In their view, the preliminary examination of witnesses would amount to a disguised appeal against the court's ruling that the offer of proof was passed.

The court rejected these principled objections. The legal starting point is that a request for a preliminary examination of witnesses is granted unless one of the grounds for rejection mentioned in Section 196(2) Rv arises. The court held that the buyer had a legitimate interest in the requested witness examination. The instrument fits within the retrial function of appeal and allows a party to better assess its procedural position. Moreover, the outcome of the hearings could even result in the buyer not pursuing the case, contributing to efficient litigation.

At the same time, the court ruled that in the specific circumstances of this case, the themes of proof had been formulated too broadly. In the interest of due process and to avoid a so-called fishing expedition, the court delimited the themes. The witness examination should only cover the exact content of the insourcing plans and what was communicated about them to the seller before the delivery date, the seriousness and impact of those plans on the acquired company and the cognisable negative consequences in the pre-acquisition period. Two other lines of evidence proposed by the buyer, namely on the seller's decision to withhold information, the court left out of the witness examination.

The court granted the request to hear five named witnesses and stipulated that the hearings will take place in the period from March to May 2026.

What does this ruling mean for your business?

This decision is relevant to companies facing litigation following an acquisition or other transaction for several reasons.

First, the court confirms that the preliminary examination of witnesses is also a fully-fledged tool on appeal, especially under the new law of evidence applicable from 1 January 2025. If the court has ignored your offer of proof or you were not given sufficient opportunity to hear witnesses, the appeal offers a second chance. The preliminary examination of witnesses can help you focus on the relevant facts prior to the substantive debate on appeal.

Second, the ruling makes it clear that the court does set limits on the scope of witness examination. Evidence themes must be sufficiently defined and may not be formulated so broadly as to constitute fishing expedition. It therefore pays to formulate evidentiary themes carefully and in a focused manner.

Third, the case underlines the importance of good information guarantees in a purchase agreement in an acquisition. S&I insurance plays a crucial role in this type of litigation, but the success of a claim hinges on proof that a guarantee has actually been breached. The timely and strategic securing of evidence is key in this regard.

What can you do?

With every acquisition, ensure clear and well-defined warranty provisions in the purchase agreement. Keep all correspondence and documentation related to disclosures around the transaction. If it does come to a dispute over the fulfilment of warranties or coverage under an S&I insurance policy, it is important to immediately determine a strategy for securing and gathering evidence. This applies not only at first instance, but also if you want to strengthen your evidentiary position on appeal.

More information.

TK has extensive experience in takeover disputes, proceedings on warranty claims and W&I insurances, and conducting complex evidence proceedings including preliminary witness hearings. We are happy to think with you about the best approach for your case. Feel free to contact Michiel or one of the professionals from the team to discuss what we can do for your company.