Einde inhoudsopgave
Exit rights of minority shareholders in a private limited company (IVOR nr. 72) 2010/4.2.5.1
4.2.5.1 Expulsion remedy and oppression remedy
mr. dr. P.P. de Vries, datum 03-05-2010
- Datum
03-05-2010
- Auteur
mr. dr. P.P. de Vries
- JCDI
JCDI:ADS409612:1
- Vakgebied(en)
Ondernemingsrecht (V)
Voetnoten
Voetnoten
Grunewald (2008), p. 417; Becker (1985), p. 63-67.
In 1953, expulsion of the shareholder in case of an important ground was acknowledged by the Supreme Court, see BHGZ 9, 157. For the oppression remedy, see § 4.3.
BGHZ 80, 346, 347: 'die Auseinandersetzungen zu einem so tiefgreifenden und unheilbaren Zerwürfnis geführt haben, daβ das Gesellschaftverhältnis zwischen ihnen nicht fortgesetzt werden kann.'
As appears from: BGHZ 80, 346, 351, the Court of Appeal took the view: 'eine Ausschlieβung des Klägers wäre nur dann gerechtfertigt, wenn ihn das alleinige oder hauptsächliche Verschulden an der Zerrlitting träfe, ein überwiegendes Verschulden genüge nicht.'
This was already settled in BGHZ 16, 317, 323 and BGHZ 32, 17, 35.
For a case in which the Supreme Court approved of the application of the winding-up remedy, although the expulsion of the shareholder was rejected by the Court of Appeal of Munich, see: BGH NJW 1985, 1901.
See infra § 4.3.6.
Lutter/Hommelhoff (2009), § 34, 77; Baumbach/Hueck (2006), Anh § 34, 24; Rowedder/ Schmidt-Leithoff (2002), § 34, 75; Röhricht (1991), p. 384-385.
Because of its harsh result, the winding-up remedy is seldom applied. The remedy plays an insignificant role in German company law. It is a measure of last resort. Less far-reaching measures solving the difficulties have to be exhausted, before a petition for winding up is allowed. These measures are in particular the application of the expulsion remedy or the application of the oppression remedy.1 Similar to the oppression remedy, the possibility to expel a shareholder if an important ground to do so is present is acknowledged in case law.2
A case in which a less far-reaching measure was acknowledged as a bar for the winding-up remedy comprises BGHZ 80, 346. This case involved a road construction company, which was set up by several brothers who were shareholders and directors of the company. The marriage of one of the brothers to an employee of the company created a tense situation between the shareholders. The co-shareholders of the married brother demanded the resignation of his wife as an employee, eventuating in several legal proceedings. One of the co-shareholders invoked the winding-up remedy. At that stage, the shareholders unanimously agreed on the fact that "the discussions between them have resulted in such a fundamental and irresolvable dispute, that the company relationship between them can no longer be continued."3 For this reason, the District Court granted the claim for application of the winding-up remedy.
The Court of Appeal (Oberlandesgericht) of Celle approved this judgment. Comparable to the view of the District Court, the Court of Appeal put forward that less far-reaching measures, such as the expulsion of a shareholder, could not be applied. The Court of Appeal considered:
"an expulsion of the claimant would only be justified if the breakdown is caused or mainly caused by him, it is not sufficient that the breakdown is caused by him for the most part."4
In contrast with the judgment of the Court of Appeal, the Supreme Court held that even if the shareholder was largely responsible for the breakdown (überwiegendes Verschulden), depending on the circumstances of the case, expulsion could be ordered. The Supreme Court approved the view of the Court of Appeal that if expulsion can be ordered, this option bars the application of the winding-up remedy.5 Subsequently, the Supreme Court referred the case back to the Court of Appeal.6
Although in the event of a serious and incurable dispute the legal enforcement of the oppression remedy may encounter difficulties,7 according to legal literature it may provide an alternative solution that bars application of the winding-up remedy.8