Law and minorities

[:en]The abuse of right is born as a remedy against the exercise of a right with absence of good faith. The abuse of right supposes, in the first place, the apparent or formally correct use of a subjective right; secondly, that because of the intention of the author, because of its purpose or because of the circumstances in which it is carried out, the questioned action clearly exceeds the normal limits of the exercise of a right; and finally, causing harm to a third party because it adversely affects an interest that is not specifically protected.

We are at the time of annual corporate meetings, and Law 31/2014 included in the Law on Capital Companies (LSC) the abuse of right in detail as a cause for challenging social agreements (Article 204 of the Companies Law of Capital). Recently, the Supreme Court, in a judgment dated February 14, 2018, regarding a capital increase agreement that appears to be correct and adjusted to the law and the bylaws, but adopted as a reaction to the entry of a third party into the corporation, has applied the abuse of right to appreciate that despite this apparent or formal correction, the right to vote would have been exercised abusively, with damage to a third party, due to the exceptional circumstances surrounding the adoption of the agreement, constituting an excess that the law does not cover . And the Supreme Court goes to the abuse of right to sanction those social agreements that imposed by the majority and covered by an apparent conformity with the legal and statutory regulations of the company produce an abusive act or business. And consequently, it declares the nullity of the impugned agreement.

It is clear that the application of the abuse of right has been consolidated in the corporate sphere after the law 31/2014 which literally established that the social interest injury also occurs when the agreement, even though it does not cause damage to the social patrimony, is imposed in a abusive way by the majority. It is understood that the agreement is imposed abusively when, without responding to a reasonable need of the company, it is adopted by the majority in its own interest and to the unjustified detriment of the other partners. Thus consecrating greater protection to the minority shareholder.

As a conclusion, our order and courts place the focus on the principle “alterum non laedere” (not to harm others).

No more or what less.[:]

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