RESOLUTION OF THE PLENUM OF SUPREME ECONOMIC COURT OF THE REPUBLIC OF BELARUS

of May 19, 2005 No. 19

About single questions of practice of consideration of the disputes connected using conditions of establishment of legal entities and the legislation on economic societies

For the purpose of uniform application of the legislation by consideration of the disputes connected using conditions of establishment of legal entities, the Plenum of Supreme Economic Court of the Republic of Belarus, being guided by articles 14-16 of the Law of the Republic of Belarus of December 9, 1998 "About economic courts in the Republic of Belarus" (Vedamastsi Natsyyanalnaga to descent of Respubliki Belarus, 1999, No. 2, the Art. 32),

DECIDES:

1. Draw the attention of economic courts that in case of the solution of question of jurisdiction of disputes over claims of founders (participants) of limited liability companies and additional liability companies, joint-stock companies it is necessary to be guided by Articles 39, of 41, 47 Economic Procedure Codes of the Republic of Belarus (further - HPK), legal acts owing to which certain categories of cases, and also joint resolutions of Plenums of the Supreme Court of the Republic of Belarus and Supreme Economic Court of the Republic of Belarus concerning differentiation of jurisdiction of cases between general and economic courts can be referred to jurisdiction of economic court. At the same time nature of disputable legal relationship which determining criterion is availability of dispute over statements of founders (participants) or their heirs concerning application of conditions of establishment of economic society, other legal entity (the conditions of creation and activities of society connected with change of list of participants, observance of the rights of the participants determined by the legislation and the charter of society and also the owners and persons having corporeal and liability laws concerning legal entities) is considered.

2. In case of the dispute resolution of this category economic courts should mean that the legal status of economic societies is regulated as the relevant articles of Chapter 4 of the Civil code of the Republic of Belarus (further - group of companies), and the provisions of the law of the Republic of Belarus of December 9, 1992 "About joint-stock companies, limited liability companies and additional liability companies" (Vyarkho¸naga Savet's Vedamastsi of Respubliki Belarus, 1992, No. 35, Art. 552; The National register of legal acts of the Republic of Belarus, 2004, No. 122, 2/1056) (further - the Law) in the part which is not contradicting group of companies.

Features of legal status of consumer societies and their unions, banks, non-bank credit and financial organizations, insurance companies (including societies of mutual insurance, insurance brokers, associations of insurers), the open joint stock companies created in the course of privatization and privatization of state-owned property, the commercial organizations with foreign investments and also subjects of managing in free economic zones, associations of the legal entities created according to the decision of the President of the Republic of Belarus, the Government of the Republic of Belarus are regulated also by other acts of the legislation.

3. Economic courts should consider that according to Article 88 and Item 3 of Article 94 of group of companies of limited liability company and additional liability company act on the basis of the foundation agreement and the charter, and joint-stock companies according to Item 3 of Article 98 of group of companies - based on the charter. The specified constituent documents shall correspond as requirements of Item 2 of Article 48, of Item 3 of Article 51 of group of companies, Item 29 of the Regulations on state registration and liquidation (activities termination) of subjects of the managing approved by the Decree of the President of the Republic of Belarus of March 16, 1999 No. 11 "About streamlining of state registration and liquidation (the activities termination) of subjects of managing" (The national register of legal acts of the Republic of Belarus, 1999, No. 23, 1/191; The national register of legal acts of the Republic of Belarus, 2005, No. 40, 1/6300), and to requirements imposed to contents of constituent documents of economic society of the corresponding form of business.

4. The foundation agreement of limited liability company (further - Ltd company) and additional liability companies (further ODO) according to article 8 of the Law is the agreement regulating conditions of creation of society and relation of members of society when implementing its activities. The agreement on creation of joint-stock company signed by founders of joint-stock company does not govern the relation between shareholders when implementing activities of society and stops the action after goal achievement of creation and state registration of joint-stock company.

The specified agreements shall meet the general requirements imposed on group of companies to transactions and by consideration of disputes on recognition of agreements invalid economic courts shall be guided by the relevant standards of group of companies about invalidity of transactions.

5. Considering that the foundation agreement is one of types of the civil agreement, owing to Item 2 of Article 420 of group of companies such agreement can be terminated by economic court in the claim of one of participants (several participants) shown to other participants. The member of society has the right to choose method of protection of the rights independently: or by means of presentation of the claim in economic court for termination of the foundation agreement, or exercising the right of secession of participants (Article 93 of group of companies) belonging to it.

Termination of the foundation agreement is possible only on the bases, stipulated in Item 2 Articles 420 of group of companies.

At the same time economic courts should recognize that termination of the foundation agreement attracts liquidation of society only if this agreement is signed between two participants.

Economic court, having determined by consideration of the action of rescission of the foundation agreement that the participant voluntarily left the list of members of Ltd company or ODO, refuses satisfaction of claims.

6. According to article 47 HPK cases on disputes between the shareholder and the joint-stock company, members of other economic societies and partnerships arising when implementing activities by these societies and partnerships are subordinated to economic court.

Economic courts should mean that disputes on recognition invalid decisions of meetings of participants, other bodies of economic societies do not belong to the disputes arising from administrative and other public legal relationship and are considered by rules of claim production.

If the claim is declared recognition invalid the protocol of meeting of members of society, economic courts shall recognize that the protocol of meeting represents written execution of the decision of meeting.

In case of permission of the questions connected with initiation of production according to the invalidation action of the decision of meeting of members of society on appointment or dismissal of the director (the CEO or other head) of society it is necessary to consider that disputes over claims of members of society on recognition invalid decisions of the supreme body of the commercial organization violating appointment procedure of executive body of society which infringes on interests and the rights of members of society on administration of society when implementing appointment procedure of executive body are subject to consideration in economic courts.

The invalidation actions of the decision of meeting of members of society made by persons dismissed according to the decision of meeting of members of the head of the commercial organization (including when the claimant at the same time is member of society), are not subject to consideration in economic courts as treat employment disputes.

To acts of bodies, disputes on legality of which adoption are subject to consideration in economic court, do not belong as well different letters of executive body of society (for example, the CEO) concerning the rights of founders (participants) or shareholders. In this case the order (the order, board decision, etc.), but not the message (letter) made on their basis can only be consideration subject in economic court.

7. By consideration of invalidation actions of the decision of meeting of participants on exception of Ltd company and ODO of the participant it must be kept in mind that the basis for exception of these societies is systematic failure to carry out or improper execution by the participant of the obligations or making of the actions (failure to act) interfering goal achievement of society (evasion from participation in decision making of society, making of actions (failure to act) to the detriment of interests of society, etc.). Making the decision, economic courts shall consider as the actual circumstances which formed the basis for exception of the list of participants and observance of requirements of the legislation and constituent documents in case of the solution of question of exception. In case of assessment of legality of the decision it is necessary to recognize also that such decision can be made only unanimously by all members of society (without voice excludable) irrespective of number of votes, belonging to the excludable member of society.

8. Are subordinated to economic courts as well the disputes following from the relations between the collective companies and members of labor collective of the collective companies having liability laws on property of the company. In particular, economic courts consider disputes: about recognition invalid decisions of meeting of employees of the collective company, about exception of the list of owners of property of the company, however only when claimants are owners of equity property fund of the company as these disputes follow not from employment relationships, and are connected using establishment conditions (creation and activities of the legal entity, and also with implementation of the rights of the owner of property).

9. Estimating legality of the decision made by meeting of participants, economic courts shall recognize that competence of general meeting of members of society, procedure for adoption of decisions by them determine by Articles 90, 103 groups of companies, Articles 18, 19 Laws. Lack of quorum, inopportuneness of the notice (not notice) of the participant about time of holding meeting which entailed impossibility of participation in work of meeting, violation during the vote of the principle of unanimity (for example, Article 91 of group of companies) and other fundamental breaches of the legislation and requirements of constituent documents belong to violations of the law which can form the bases for satisfaction of the invalidation action of the decision of meeting of participants, in particular.

At the same time in case of permission of such disputes the economic court has the right to refuse taking into account all facts of the case the claim if the number of votes of the certain participant could not affect results of vote, the allowed violations are not essential.

By consideration of disputes on recognition invalid economic courts of the decision of meeting of participants should consider that the regulations of part one of article 19 of the Law establishing quorum for decision making are applied if other rules are not established by the Law.

10. According to Article 103 of Civil Code, Articles 17, 18 Laws the meeting of participants is governing body of society.

The decision of meeting of participants (shareholder meeting) shall be regarded by economic court as the decision of the society, but not the decision of certain participants as it reflects collective will of the supreme body of management of society. With respect thereto as the defendant in disputes on recognition invalid decisions of meeting of participants the legal entity (society, partnership) shall act.

If by preparation of case for legal proceedings or during legal proceedings of case in economic court of the first instance it is determined that the claim is made not to that person who shall answer in the claim, the economic court has the right to allow replacement of the inadequate defendant ought according to the procedure, stipulated in Article 61 HPK.

In case the claim of one of members of society for recognition invalid decisions of governing body of society is made to society, the economic court according to article 65 HPK can recruit in case in quality of the third parties who are not declaring independent requirements regarding dispute, other members of this society.

11. By hearing of cases in claims of members of Ltd company and ODO for payment of the part of profit distributed between participants, economic courts it is necessary to consider that conditions and procedure for its distribution and payment are provided by charters of societies. The decision on collection of the amounts of profit which are due to the claimant can be made by economic court if society does not carry out the decision of meeting of participants on distribution of part of profit between her participants (except as specified exit or exception of the list of participants) as the question of profit distribution is within the exclusive competence of meeting of members of society (Item 3 of Article 90 of group of companies).

In case of the dispute resolution, the shareholders connected with requirements about dividend payout, it is necessary to consider the procedure for their payment established by the charter. When the joint-stock company makes the decision on dividend payout for certain period, but their payment is not made, the shareholder has the right to appeal to economic court with the recovery suit from society of the amounts which are due to it.

12. According to Article 63 of Civil Code the property created at the expense of deposits of founders (participants) of society, and also made and acquired by economic society in the course of its activities belongs to it on the property right.

Economic courts in case of the dispute resolution should mean that from the moment of entering of property into authorized capital and state registration of economic society founders (participants) lose the property right to this property and acquire the liability laws determined by constituent documents (the right of management of society, the right to profit, part of property value in case of disposal from structure of society, etc.).

According to part two of Item 2 of Article 44 of group of companies participants of economic partnerships and societies, production and consumer cooperatives can have the corporeal rights to property which they contributed to legal entities to use as contribution to authorized capital.

By hearing of cases, connected with transfer to society as contribution to authorized capital of property use right, it must be kept in mind that according to article 14 of the Law the size of contribution of the participant by transfer of its property to society to ownership and use for certain term is determined by the agreement between participants proceeding from the rent estimated for all this term.

From society of earlier specified term the contribution of the participant is recognized not brought on the rent amount for the remained period cases of liquidation of society or exit of the participant.

13. According to Item 2 of Article 64 of group of companies in case of exit and exception of the participant of economic partnership or society of the list of participants, except the member of joint-stock company, the cost of part of property of economic partnership or society corresponding to share of this participant in authorized capital of society, determined by the balance constituted at the time of disposal is paid to it. For determination of share of the disposed member of society in property of society it is necessary to proceed from book value of property without revaluation of its cost at the time of exit of the participant from society if acts of the legislation do not provide obligatory revaluation of property of legal entities.

14. In case of determination of actual value of share of the member of Ltd company and ODO and part of the profit which is due to it economic courts need to consider that:

the actual value of share of the member of society shall correspond to part of the net assets value of society (difference between asset cost and debts) determined according to the procedure, established by the legislation, share of the participant pro rata to the size in authorized capital of society;

the size of share of the disposed (excluded) member of society is determined based on data of the balance constituted for date of exit of the participant from society;

the moment of exit of the participant from society day of submission of the statement for exit by it to the corresponding official (responsible) person of society or delivery of the statement to these persons is considered bodies of communication;

calculation of receivable part of profit is made at the time of exit of the participant from society;

the actual value of share in proportion to the paid (brought) part of contribution is paid to the disposed (excluded) member of society who not completely made the contribution to authorized capital of society.

Economic court, having determined based on cumulative data of balance that at the time of exit (exception) of the claimant of society the amount of debt obligations and borrowed funds exceeds the amount of own means of society, refuses satisfaction of claims due to the lack at society of the property which is subject to the Section (net assets).

15. Under the agreement of the disposed participant with the remained members of society payment of property value to it can be replaced with issue of property in nature. However at the same time it is necessary to consider that in case of payment of contribution to authorized capital by property in case of exit from society the participant has no right to require return only of this property as according to part two of Article 44 of group of companies participants of economic partnerships and societies can have only liability laws on such property.

16. In case of the dispute resolution, connected with transition of share (its part) of the participant in authorized capital of society to other persons, it must be kept in mind the following:

according to Articles 92, the member of Ltd company and ODO has the right to sell 94 groups of companies or to otherwise yield the share in authorized capital of society or its part to one or several members of this society. The consent of society or its participants to making of such transaction is not required if other is not provided by the charter of society;

alienation by the member of society of the share to the third parties is allowed if other is not provided by the charter of society. Other members of society have the privilege of purchase of share of the participant selling share at the price offered the third party;

members of society have the privilege of purchase of share of the participant in proportion to the sizes of the shares if the charter of society or the agreement of his participants do not provide other procedure of this right;

the member of society, intended to sell the share to the third party, shall inform in writing on it other members of society with indication of the price and other conditions of its sale;

if members of society do not use the privilege of purchase of all share offered for sale, within a month from the date of their notice on it, the share can be sold to the third party at the price and on the conditions told participants. Other term during which they can perform the right of preferential purchase of share can be established by the charter of society or the agreement of his participants.

17. Draw the attention of economic courts that in cases when according to the charter of Ltd company or ODO alienation of share of the participant is forbidden to the third parties, and other members of society refuse its purchase society shall pay to the participant its actual value or issue it in nature the property corresponding to such cost and has the right to redeem its share.

The obligation of the redemption of share of the participant in authorized capital of society arises also in case of refusal of members of society to agree to transition of share of the participant to his heirs (legal successors).

18. In case of the dispute resolution, connected with use by members of private company of the privilege to share acquisition, alienated by other shareholders of this society, it must be kept in mind that the regulations of Item 5 of Article 97 of group of companies affirming such right are imperative. With respect thereto such right cannot be limited to the agreement on creation of society or the charter. Society can use the right of preferential purchase if such right is provided by the charter of this society and provided that shareholders of society do not use the right to share purchase belonging to them.

19. Economic courts by consideration of the disputes following from violation of the privilege of purchase should recognize that sale by the member of society of share (shares) with violation of the privilege of purchase does not involve invalidity of such transaction. Effect of such violation owing to Item 3 of Article 253 of group of companies is the right of any member of society within three months since the moment when he learned or shall learn about such violation, demand judicially transfer of the rights to it and obligations of the buyer according to the purchase and sale agreement of share. Three-months term is the special term of limitation period (Article 198 of group of companies).

20. In case of application of part three of article 48 of the Law determining that upon transition of share of the member of society or its part to the third party there is simultaneous transition to it of the rights and obligations belonging to the participant yielding it fully or partially to economic courts it must be kept in mind that the share of the participant in authorized capital of society is liability law of the requirement therefore rules about concession of the rights (Article 353-361 of group of companies) extend to its transfer (concession). In this connection the acquirer of share in authorized capital of society performs the rights and fulfills duties of the member of society from the moment of the notification of the last on the specified concession.

21. According to Articles 93, of 94 groups of companies the member of OOO and ODO has the right to leave society irrespective of the consent of other participants at any time. Secession of members of society does not contact neither the decision of meeting, nor modification of constituent documents with respect thereto the moment of exit of the participant from the list of members of society is date of filing of application about exit.

The decision of economic court attracting modification of constituent documents of the subject of managing does not substitute for itself their state registration. Changes in constituent documents of society including in connection with change of list of members of society, acquire force for the third parties only from the moment of their state registration (Item 3 of Article 48 of group of companies).

If society does not take necessary measures in connection with submission by the participant of the statement for secession of members of society (the application is not considered at meeting, the issue of modification of constituent documents, of carrying out their state registration is not resolved), the interested person has the right to appeal to economic court with the claim for compulsion of the legal entity to making of actions for state registration of actually performed changes of list of members of society.

22. Change of the owner of property, change of list of members of Ltd company and ODO, acquisition of share by society or other person generate for society obligation on modification of the constituent documents and their representation in accordance with the established procedure for state registration (Item 9 of the Regulations on state registration and liquidation (activities termination) of subjects of the managing approved by the Decree of the President of the Republic of Belarus of March 16, 1999 No. 11). In this regard economic courts shall send to registering body information on termination of the foundation agreement and on satisfaction with economic court of the claims attracting change of constituent documents of society.

23. Draw the attention of economic courts that according to article 232 HPK acceptance to production of economic court and consideration of the applications about establishment of the facts having legal value for origin, change or the termination of the rights of founders (participants) or shareholders is possible in the presence of in total conditions provided in the specified Article.

Declare invalid:

the resolution of the Plenum of Supreme Economic Court of the Republic of Belarus of June 7, 2001 No. 4 "About single questions of practice of consideration of the disputes connected using conditions of establishment of legal entities and the legislation on economic societies" (The national register of legal acts of the Republic of Belarus, 2001, No. 65, 6/292).

 

Chairman

V. S. Kamenkov

Secretary Plenuma, judge

A. A. Garnovsky

 

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