Marcin Rudzki and Sandra Murdzek for Dziennik Gazeta Prawna: “Judicial review of resolutions requires shareholder activity and flawless procedure”
In joint-stock companies, the possibility of challenging resolutions of the general meeting is not a privilege reserved solely for minority shareholders – any shareholder may seek judicial review of decisions if they can demonstrate an infringement of their rights or procedural irregularities. Practice shows, however, that the key to an effective challenge is not merely participation in the meeting, but strict compliance with formal requirements and the ability to prove an unlawful restriction of corporate rights. The principles governing judicial review of resolutions are discussed in today’s issue of Dziennik Gazeta Prawna by senior associate Marcin Rudzki and junior associate Sandra Murdzek.
Who may challenge a resolution of the general meeting?
The catalogue of entities entitled to contest resolutions is closed and cannot be modified by the articles of association or resolutions of the company’s bodies. This right is vested in the management board, the supervisory board, individual members of these bodies, liquidators, and shareholders – provided that certain statutory conditions are met. The legislator clearly favours shareholder activity, based on the assumption that “those who are absent have no right.” A shareholder wishing to challenge a resolution must vote against it and request that their objection be recorded in the minutes, unless they hold non-voting shares or were unjustifiably prevented from participating in the meeting.
Unjustified exclusion from the general meeting
A specific circumstance entitling a shareholder to challenge a resolution is unjustified exclusion from participation in the meeting. This may take an overt form – such as being denied entry to the meeting room – or an indirect one, consisting in deprivation of the right to vote, speak, or ask questions. Exclusion also includes refusal to accept a shareholder’s proxy, exclusion from part of the meeting, or hindering participation in a remote format through system failures or inappropriate electronic platforms. In such cases, the burden of proof rests with the shareholder – it is for them to demonstrate that the exclusion was unjustified and lacked a legal basis.
Defective convening and violation of the agenda
A shareholder absent from the general meeting may also challenge a resolution if the meeting was convened defectively or if the resolution concerned a matter not included in the agenda. Defective convening includes situations where the meeting was convened by an unauthorised body, statutory deadlines or notification methods were breached, or the announcement contained incorrect information. The agenda must be sufficiently precise to allow a shareholder to make an informed decision about participation and to prepare accordingly. An overly laconic description of the subject matter that does not reflect the actual course of the meeting may also constitute grounds for challenging a resolution.
Time limits and legal consequences
A former shareholder retains the right to challenge a resolution if it affects their corporate or proprietary rights – this applies in particular to cases of compulsory redemption or squeeze-out of shares. A shareholder entitled to challenge may seek annulment of a resolution within one month or declaration of its invalidity within six months from the date the resolution was adopted. The defendant is the company, and the court fee amounts to PLN 5,000 for each challenged resolution.
What other issues should be taken into account when challenging resolutions of the general meeting of a joint-stock company? This question is addressed by Marcin Rudzki and Sandra Murdzek of the KWKR law firm in their article published in Dziennik Gazeta Prawna.
