Andrey Gorodissky & Partners Law Firm (AGP) was approached by a car manufacturer (the “Company”) that requested to ensure protection of its interests in a corporate conflict initiated by one of its shareholders.
The shareholder who initiated the conflict believed that in one of a series of funding procurements the Company unlawfully failed to afford him and other shareholders the preemptive right of purchase of additional placed shares. The Company believed that it did not commit any breaches, while real motives of the shareholder were disruption of the procurement of funding.
AGP’s attorneys and lawyers team developed a line of defense of Company’s interests, which included a system of independent and complementary arguments. The most essential of them were as follows:
Courts of the first and the appellate instances fully agreed with our arguments and noted in their rulings, among other things, that in the circumstances at hand the Company had not committed any breaches of laws, the shareholders had no preemptive right, the shareholder who had initiated the court proceedings (the claimant) in effect had no intention to fund the Company but pursued personal interests in bad faith, which interests were inconsistent with the mutual interests of the Company, other shareholders and investors. The shareholder in its turn filed a cassation appeal against the said rulings, however later it gave up the dispute and withdrew its claim.
It is worth noting that the courts not only invoked provisions of civil, corporate, and issue laws but also applied the estoppel principle.
This case is unique within the context of similar corporate disputes due to the fact that the courts departed from a formalistic assessment of Company’s acts. They on the contrary focused on the overall study of all factual circumstances of the case and assessment of real consequences of invalidation of the corporate decision. Such approach implying profound analysis of the essence of relationships rather than just their procedural cladding distinguishes the issued court rulings from the most part of legal precedents associated with disputes over shareholders’ preemptive rights in case of floating of additional shares.
The client was represented in this case by Alexey Gorodissky, Attorney, Partner, Practice leader Corporate Law / M&A, Dmitry Yakushev, Attorney, Counsel Bankruptcy, Dispute Resolution / International Arbitration Practice as well as Lawyer of the Corporate Law / M&A Practice team Daria Noskova and Junior Lawyer of the Practice team Ruslan Dzhantemirov, Junior Lawyer of the Bankruptcy, Dispute Resolution / International Arbitration Practice team Olesya Emkuzheva.
