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Your power to winCorporate Disputes
Safe and successful management of economic activities significantly depends on the availability of effective means to protect the rights of participants in corporate relations. However, it is not uncommon for disagreements and misunderstandings to arise between partners during joint business operations, leading to corporate disputes. Such disputes also develop when the interests of business owners, managers, and shareholders diverge or were not settled in advance. Often, one party to the conflict abuses their rights, which can result in the company's bankruptcy, a raider takeover, or a hostile takeover.
Corporate law is a field with a limited number of experienced lawyers and attorneys due to the complexity of corporate disputes and the large volume and imperfections in the legislation governing corporate relations. Therefore, to succeed in a corporate conflict, it is essential to engage true professionals with practical experience in resolving complex corporate disputes, as the outcome often determines the fate of an entire business—a lifetime endeavor.
Legal support for resolving corporate disputes includes, among others, the following types of cases:
- Challenging decisions made by governing bodies of a company, including those related to the creation, operation, management, or liquidation of the company; exclusion of a participant; or redistribution of ownership shares among participants.
- Appointment, election, dismissal, or termination of the powers of individuals within the company’s governing bodies.
- Takeover of a company through manipulation of corporate rights (raider attacks, hostile acquisitions).
- Buying and selling corporate rights, including transferring buyer’s rights and obligations in cases of breach of a participant's preemptive right to purchase a share in the company’s authorized capital; invalidation of agreements on the alienation of shares in the authorized capital.
- Compensation for the value of a company’s property shares and profits.
- Contesting the provisions of a company’s charter.
- Challenging decisions on the issuance of shares and other securities.
- Violation of the right to receive timely and full dividends.
- Challenging transactions with affiliated parties or significant agreements.
- Recovery of damages caused by the actions of company officials.
- Challenging registration actions, including the registration of property and property rights; invalidation of acts violating property rights if such claims are derivative from corporate disputes.
If a decision of the general meeting of a joint-stock company or the procedure for adopting such a decision violates the requirements of legislation or the company’s charter, a shareholder whose rights or legally protected interests are violated by that decision may challenge it in court within three months from the date it was made.
A participant in a limited liability company may demand, through the court, the transfer of the buyer’s rights and obligations to themselves if their preemptive right is violated. The statute of limitations for such claims is one year.
An extraordinary general meeting of the joint-stock company must be convened at the request of shareholders (a shareholder) who, on the day of submission of the request, collectively own 10 percent or more of the voting shares. The request for convening an extraordinary general meeting is submitted in writing to the executive body at the company's address, indicating the names of the shareholders requesting the convening of the extraordinary general meeting, the reasons for the convening, and the agenda. A decision to refuse the convening of an extraordinary general meeting of shareholders may be appealed to the court by the shareholders.
Measures to secure a lawsuit must not violate the rights of other shareholders (participants) of a business entity who are not parties to the dispute. In particular, except in cases provided by law, the prohibition on taking actions should relate only to shares or corporate rights directly connected with the subject of the dispute. At the same time, securing a lawsuit in disputes arising from corporate relations by prohibiting the following is not allowed:
- holding general meetings of shareholders or participants of a business entity and making decisions, except for the prohibition of making specific decisions determined by the court, which are directly related to the subject of the dispute;
- the issuer, custodian, or depository from providing the register of holders of registered securities, information about shareholders or participants of the business entity for conducting general meetings of the company;
- participation (registration for participation) or non-participation of shareholders or participants in the general meetings of the company, determination of the quorum of the general meetings of shareholders or participants of the business entity;
- state authorities, local self-government bodies from performing the powers vested in them by law, except for the prohibition of making specific decisions determined by the court, performing specific actions directly related to the subject of the dispute.
Disputed decisions of the general meeting of the company's participants adopted in connection with the conclusion of a share purchase agreement that has been terminated are subject to invalidation in the part concerning the exclusion of the claimant from the company's participants, the distribution of shares in the authorized capital and the corresponding amendments to the charter.
Disputed decisions of the general meeting of the company's participants, made in connection with the conclusion of a purchase agreement for a share that has been terminated, regarding the exclusion of the plaintiff from the list of the company's participants, the distribution of shares in the company's authorized capital, and the corresponding amendments to the Charter concerning these actions, are subject to being declared invalid.
As a general rule, disputes arising from corporate relations are considered by the commercial court at the location of the legal entity.
The parties to a corporate dispute may conclude a settlement agreement at any stage of the court proceedings.
Cases in disputes arising from corporate relations and in disputes over transactions with corporate rights (shares) cannot be considered under simplified claim proceedings.