Pre-litigation tools and procedure in M&A litigation

Shareholder vote

What impact does a shareholder vote have on M&A litigation in your jurisdiction?

Board members are normally discharged from liability at the company’s annual general meeting of shareholders. If the board members are discharged from liability, a claim cannot be brought against them to recover damages on behalf of the company unless: (1) incorrect or incomplete information has been provided to the shareholders’ meeting in respect of circumstances relating to the decision or act upon which the proceeding is based, or (2) the board member has committed a crime which, for example, has resulted in the Company having to pay damages. Thus, a shareholder vote for discharge can alter the possibilities to bring action against an M&A transaction. Lastly, however, shareholders whose shares represents at least 10 per cent of the shares in the company may stop board members from being discharged from liability.


What role does directors’ and officers’ insurance play in shareholder litigation arising from M&A transactions?

One way to protect board members from personal liability for damages caused to third parties is by arranging for a director’s liability insurance. It is common for companies to take out such insurance. Depending on the terms of the insurance policy, the insurance may also cover claims brought by shareholders in the context of an M&A transaction.

Burden of proof

Who has the burden of proof in an M&A litigation – the shareholders or the board members and officers? Does the burden ever shift?

In principle, the claimant bears the burden of proof for its own claims. This includes, inter alia, that the claimant must provide evidence of the damaging act, the damaged caused by it and the loss.


There is no reversal of the burden of proof with respect to the liability of a company’s management in relation to the injured company. The burden of proof may, however, shift in certain circumstances. For example, if the claimant shows that it is probable that the director has been negligent, the burden of proof may shift to the director to show that he or she has not been negligent. In other words, the director might in such a situation have to exculpate himself or herself.

Pre-litigation tools

Are there pre-litigation tools that enable shareholders to investigate potential claims against board members or executives?

The shareholders exercise their influence at the general meeting and cannot make decisions with respect to the company’s business outside of the general meeting. In order to obtain insight into a company’s finances and other information the shareholders may for example be present and ask questions during the general meeting or require that a specific matter is listed on the meeting agenda.  The board of directors and the managing director shall if a shareholder so requires, and if it would not severely damage the company, provide information relevant to any matter on the meeting agenda and information relevant to the assessment of the company’s financial situation. As regards publicly listed companies, there are additional rights for the shareholders to obtain access to, for example, accounting records and audit report before the annual meeting. Any right of the shareholders to obtain insight into a company’s finances and other information is, however, no longer available if the company has been sold.


Are there jurisdictional or other rules limiting where shareholders can bring M&A litigation?

There are no specific rules with respect to M&A litigation. Thus, the ordinary rules on territorial competence apply (ie, the rules under the Swedish Code of Judicial Procedure, the recast EU Brussels Regulation and the Lugano Convention). The parties may disregard these rules by agreement. Forum selection clauses are generally admissible in contracts between companies.

Expedited proceedings and discovery

Does your jurisdiction permit expedited proceedings and discovery in M&A litigation? What are the most common discovery issues that arise?

With respect to court proceedings, there are no expedited proceedings available in Sweden. Nor is pre-trial discovery, as such, available. Discovery, as understood in the US for example, is not possible. However, under the Swedish Code of Judicial Procedure, a party can request that the counter party produces a written document that can be assumed to be of importance as evidence in a case. The documents requested must be clearly identified. In addition, documents which are attorney-client privileged or can be said to constitute personal notes are excluded.