Company Law versus Competition Law – Minority shareholder successfully defends against the adoption of a resolution (6 Ob 105/19p)

6 Ob 105/19p

For the first time following a longer break, the Supreme Court examined in depth the interplay between company law and antitrust law in case 6 Ob 105/19p – CERHA HEMPEL was involved in the proceedings.

The legal dispute started when a motion to approve the budget and investment plan was tabled and put to a vote at the general meeting of a limited liability company. The majority shareholder (68%) voted in favour of accepting the motion, whereas the minority shareholder (32%) voted against it. According to the company’s articles of association, a three-quarters majority would have been required for the motion to be accepted, meaning the minority shareholder represented at the meeting had a blocking minority of 32% of the share capital. The chairman of the meeting noted neither that the motion had been accepted nor that it had been rejected.

The minority shareholder – represented by CERHA HEMPEL – therefore brought an action for declaratory relief, calling upon the court to rule that the motion had been rejected because the three-quarters majority had not been reached. The majority shareholder objected that the minority shareholder had been subject to a voting ban, arguing inter alia that the minority shareholder – as a group company of a supermarket chain – was in a competitive relationship with the company – as a group company of a drugstore chain – and the exercise of the voting rights by the minority shareholder was therefore anti-competitive and contrary to cartel law.

However, the majority shareholder was unsuccessful in making its case before the Supreme Court, which ruled that in principle control of conduct, as exists under the European prohibition on restrictive practices (Article 101 TFEU), does not apply to a shareholder’s participation rights under company law resulting from attaining (joint) control (although from the perspective of antitrust law, these monitoring rights are not unlimited, but exist only to the extent necessary for the effective exercise of these rights).

In its ruling, the Supreme Court also stated as follows:

  • An action for declaratory relief does not have to be brought against the co-shareholders; it is sufficient if it is brought against the company – the decision is effective for and against all shareholders.
  • The one-month period provided in Section 41 para. 4 of the Act on Limited Liability Companies (GmbHG) does not apply to the filing of an action for declaratory relief.
  • It is not possible to annul part of a shareholders' resolution if several items on the agenda are combined in a uniform voting procedure in such a way that the resolution should form a legal or economic unit.
  • In voting the way it did, the minority shareholder did not act in bad faith because the investments were not vital to the company's survival, the minority shareholder did not pursue a policy of blocking decisions, and it is by no means illegitimate to pursue an interest in profit distribution.
  • The managing directors of a limited liability company are bound by the instructions of shareholders as a whole when making decisions on investments and are not allowed to do so against the will of the shareholders as a whole.