We successfully represented the interests of a group of companies in a dispute with a minority shareholder in the Supreme Court of Lithuania (SCL). The minority shareholder, in defence of the company’s interests, brought a claim against the group seeking to prohibit the group from carrying out transactions that allegedly threatened the company’s interests. The SCL rejected the cassation appeal by the minority shareholder, ruling that he had no right to bring such a claim and that the dispute should be resolved by arbitration.
Shareholder may bring action only against company management bodies and their members
After the court of first instance and the court of appeal refused to accept the shareholder’s claim, he appealed their decisions in cassation.
Having rejected the appeal in cassation, SCL explained that in the interest of the company a shareholder may sue only the company management bodies and their members for damage caused to the company. However, a shareholder has no right to bring such a claim on behalf of a company against third parties, as that right is vested solely in the company’s management bodies. Nor does a shareholder have the right to take preventive action when damage is likely to occur. Additionally, the SCL stated that the dispute should not be settled in the general court, but by arbitration, as it arises from a contract in which the parties entered into an arbitration clause.
Our team representing the client