Background
The Case
Comment


In its judgment issued on February 1 2001 the Supreme Court decided a case on the validity of agreements adopted by a company's shareholders in the shareholders meeting.

Background

The claimant brought an action against three companies and two individuals, seeking the following:

  • that the decisions taken in two of the first company's shareholders meetings be annulled;

  • that the contract by means of which the second company had been sold be annulled; and

  • that the third company's deed of incorporation be declared invalid.

The Case

The defendants alleged that, according to Spanish procedural law currently in force, it was impossible for these three issues to be dealt with in the same case. This is because, according to the law's provisions, an action brought to annul decisions made in a shareholders meeting cannot be judged in conjunction with any other claim. Therefore, the claimant should split its claim into different lawsuits.

The claimant argued that since all the allegations made against the companies and the individuals were closely related, it was not possible to discuss them in different lawsuits before different judges, who might reach different conclusions.

The judge of first instance found for the defendants and dismissed the action. On appeal, the Court of Appeal confirmed this judgment.

Comment

The Supreme Court states that procedural law does not allow one party to address matters that must be dealt with in procedures governed by different rules in the same lawsuit. The procedure for challenging the validity of decisions made in a shareholders meeting is governed by specific rules, which are different from those that govern the validity of a company's deed of incorporation. These matters cannot be addressed in the same lawsuit.


For further information on this topic please contact Jorge Hern├índez or Jorge Capell by telephone (+34 9152 47100) or by fax (+34 9152 47153) or by email ([email protected] or [email protected]).