Sorainen successfully represented Nasdaq CSD SE, the defendant in litigation initiated by AS Grindeks. Grindeks was seeking a court order to recover funds from Nasdaq CSD that had been accrued for shareholder dividend payments.

About the case

In 2020, Grindeks shareholders resolved to delist the company’s shares from the regulated market – the Nasdaq Riga stock exchange – and, in 2021, converted the company’s bearer shares into registered shares. A number of Grindeks shareholders still had their shares registered in Nasdaq CSD’s initial register, which list shares acquired through privatisation before being transferred to shareholders’ individual securities accounts. Grindeks demanded that Nasdaq CSD provide the list of shareholders recorded in the initial register and simultaneously return the dividends that had previously been paid to those shareholders and accumulated by Nasdaq CSD.

Our client refused to return the accumulated dividends to Grindeks, maintaining that the funds rightfully belong to the individual shareholders, not to Grindeks, and that Nasdaq CSD holds them on behalf of the rightful beneficiaries in accordance with specific provisions in the Financial Instrument Market Law (FIML).

The courts of both first and second instance entirely rejected Grindeks’ claim, ruling that:

  • Under FIML, dividends transferred to the central depository become the property of the shareholders, and Nasdaq CSD holds and distributes them to shareholders – not to the issuer.
  • Grindeks has no right to demand the return of the accumulated dividends, as these funds no longer constitute assets of the company but are instead the property of the individual shareholders, who are entitled to receive them directly from the depository.

Finally, in April 2025, the Supreme Court declined to initiate cassation proceedings, emphasising that by transferring the dividends to the central depository, Grindeks had fulfilled its obligations to shareholders. The depository holds these funds for the benefit of the shareholders, not Grindeks. This case marks the first time that a court has conducted an in-depth analysis and interpretation of Latvia’s unique legal framework concerning the initial register and the role of Nasdaq CSD in the administration of such shares and funds.

Our team

Legal assistance to the client was provided by sworn attorneys Rūdolfs Eņģelis and Andris Tauriņš.