A vote cast contrary to a voting commitment is valid, even if all shareholders e…
A vote cast contrary to a voting commitment is valid, even if all shareholders entered into a voting commitment agreement. A shareholders' resolution not violating a mandatory statutory allocation of competences may be contestable but is not null and void.
The decision is based on the facts concerning the dismissal of the disgraced managing director of Hannover 96 Management GmbH ("GmbH"). The GmbH’s articles of association expressly provide that the competence to remove the managing director does not lie with the shareholders' meeting, but with a voluntarily established supervisory board. Within the scope of a voting commitment agreement, the sole shareholder of the GmbH in addition undertook towards a third company not to amend the articles of association or not to amend them without the company’s prior written consent. According to the agreement, this applies in particular to the passage governing the function and composition of the supervisory board.
The sole shareholder ignored this and adopted the resolution − explicitly breaching the articles of association − to remove the managing director of the company from his role with immediate effect. In preliminary injunction proceedings, the Regional Court of Hanover granted the request of the managing director to be allowed to continue to act as managing director until the decision in the main proceedings was made. The Higher Regional Court of Celle agreed with the opinion of the Regional Court of Hanover and considered the resolution of the shareholders' meeting to be null and void. The defendant filed an appeal on points of law against this with the German Federal Court of Justice (Bundesgerichtshof, BGH).
The defendant's appeal was successful. The BGH considered the resolution to remove the plaintiff from his role as managing director of the defendant to be valid.
Contrary to the opinion of the Higher Regional Court of Celle, the removal resolution is not incompatible with the nature of the GmbH and, thus, not null and void by analogy with section 241 No. 3 of the German Stock Corporation Act (Aktiengesetz, AktG). In contrast to a violation of the law or the articles of association, for which a resolution of the shareholders' meeting can be contested, only a violation of fundamental structural principles of the German legislation regarding limited liability companies (Gesellschaft mit beschränkter Haftung, GmbH) could justify any incompatibility of the resolution with the nature of a GmbH. The nature of the GmbH does not follow from the individual provisions in the articles of association of the company at issue, since the nature of the GmbH is defined by the German Limited Liability Companies Act (Gesetz betreffend die Gesellschaften mit beschränkter Haftung, GmbHG) and the abstract general structural features of German legislation regarding limited liability companies (GmbH) and, thus, is not at the shareholders' discretion. These abstract general structural features also include the autonomy of the articles of association, which, however, must not be confused with the specific regulations in the articles of association set out in exercising this autonomy. According to the BGH, provisions in the articles of association which assign the competence to remove the managing director from office to the optional supervisory board of the company do therefore not constitute any fundamental structural principles of the German legislation regarding limited liability companies (GmbH), as the removal right is reserved to the shareholders' meeting by law (sections 45 (2), 46 No. 5 GmbHG).
The disregard of the stipulations of the voting commitment agreement does also not justify the assumption that the removal resolution is incompatible with the nature of the GmbH. Observing such voting commitment agreements is not part of the fundamental structural principles of the German legislation regarding limited liability companies (GmbH). Shareholders of a GmbH could commit themselves to a certain voting at any time. However, this agreement is, in principle, only binding on the contract partner due to the distinction between the level under the law of obligations and the corporate level so that the consequences of a violation are not to be resolved with the company.
The BGH further assumes that the removal resolution is not null and void as an offence against common decency, which would require that the resolution "considered in isolation" was contra bonos mores. Resolutions in which not the actual content of the resolution, but "only" the motive or purpose are against common decency, or in which the offence against common decency lies in the way in which they were adopted, are only contestable.
Accordingly, an invalidity of the removal resolution due to an immoral damage could at best come into consideration if the conduct of the shareholder had not only violated the shareholder’s competence and contractual duties, but circumstances beyond that had justified its reprehensibility. The court of appeal, however, had not found such circumstances in the specific case.
Voting commitment agreements are a common means to ensure a uniform voting of all shareholders or of a group of shareholders. In pooling agreements, which are very frequent in family-owned companies, the parties undertake to exercise their voting rights in a certain way. According to the controversial, but prevailing opinion, such an agreement may also be entered into with third parties.
If a shareholder violates a voting commitment agreement, such shareholder’s vote is generally valid in the shareholders' meeting. The commitment is limited to the contractual relationship of the parties involved and does not affect any third party. After the Higher Regional Court of Celle had partially eroded this principle, the BGH emphasises with welcome clarity that a distinction must be made between the level under the law of obligations and the corporate level and that a contractual breach of duty does not directly affect the shareholder relationship. Accordingly, the contract partners regularly only have the option to enforce the voting agreed under the law of obligations against the shareholder violating the agreement in court. Whether the voting behaviour contrary to the agreement is immoral and the resolution therefore contestable or even null and void, so that the action must be directed against the company itself, always depends on the individual case.
Dr Moritz Jenne
Andreas Scheffold
This blog post also appears in the Haufe Wirtschaftsrechtsnewsletter.
