SCU. Jurisdiction of corporate disputes between JSC participants

The Ukrainian Supreme Court answered the question, in which courts are considered disputes arising from corporate relations between current and retired members of companies, regarding invalidation of decisions of general meetings, amendments to statutes, as well as in which courts the termination of contracts for the sale and purchase of parts in authorized capital and valuable papers.

Thus, the Supreme Court of Ukraine (the judicial chamber of the CCC) considered the case on claims combined into one proceeding, during which the securities sale and purchase agreements were declared invalid.

The plaintiffs were represented by one of the shareholders. The buyer of the shares was a company acting on the basis of an order under a stock market brokerage agreement.

The regional court and the appeal court refused to satisfy the claim to invalidate the securities purchase and sale agreements!

Motivated by the fact that the disputed securities purchase and sale agreements were concluded on the basis of notarized powers of attorney issued personally by the plaintiffs and valid at the time of the contested transactions. The latter are concluded in accordance with the conditions prescribed in the powers of attorney.

“The civil court of cassation did not agree with such conclusions of the courts of previous instances! Court analyzed the arguments of the parties and concluded that such disputes are economic and legal, respectively, are considered in the order of economic proceedings”!

Key points of the decision in case No. 760/23870/17-c from 05.01. 2020 (case No. 61-1155cv19) of this body of justice:

1. Clause 4 of Part 1 of Art. 12 in the current edition of the EPCU at the time of filing the claim indicated that economic courts are subject to cases “generated” by corporate legal relations in disputes between a legal entity and its current or retired participants (founders, members, shareholders), as well as between participants related to the creation , activities, management and termination of the legal entity, the rights and obligations of the participants in the legal entity, with the exception of labor disputes.
2. The dispute being analyzed arose regarding the disposal of shares, therefore, it is corporate and should be considered in the course of economic proceedings. In this case, the decisions of the courts of the previous instances are subject to cancellation, and the proceedings on the case are closed on the basis of “non-jurisdictional”.

Legal entities that do not use complex legal support of business in their business should know all the legal conclusions governing this area in order to know which authority they should contact to resolve disputes.

The list of conclusions of the Supreme Court of Ukraine on the topic: No. 359/10663/18 (case No. 14-537ts19) dated 11.12.2019, No. 756/10182/16-c (case No. 12-226cc18) dated 13.02.2019, No. 331/2533/17 (case No. 14-315cc18) dated 03.10.2018 and No. 911/1437/17 dated 18.12.2018.