Shareholders' meeting abroad: abuse of rights?

Setting a location abroad as the place of the meeting of shareholders of a Russian company can be considered as an abuse of rights, confirmed the Supreme Arbitrazhniy Court.

Shareholders of a joint stock company applied to the Arbitraznhiy Court to set aside the decision of the general meeting of shareholders to include in the company's charter a provision that the meetings of shareholders can take place in one of two towns outside of the Russian Federation.

The case was lost in the court of the first instance. The Court of Appeal and the Court of Cassation, however, supported the claimants and stated that when setting a place of the meeting of shareholders creates restrictions for shareholders to attend the meeting such a decision constitutes an abuse of rights and is therefore void.

 

December 10, 2008.

 

 

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