10 April 2008
The National Court satisfied a cassation appeal submitted by Greinoman & Co.
The Court held that any resolution passed by a shareholders meeting, without that agenda item stated with a sufficient degree of clarity in the notice of the shareholder meeting, will be null and void.
The Court has been also concerned with the procedure of calling a repeated shareholders meeting. Estonian law requires calling a repeated meeting, if majority of shareholders does not attend at the initial shareholder meeting. Not surprisingly, this turned to be a convenient way to bypass majority and the Court felt it should intervene in this abusive practice. The Court therefore held that calling a repeated meeting where the majority shareholder advised the board she was unable to attend, may be a violation of good faith. All resolutions passed will be then null and void. The Court has also construed the statutory notice period for the repeated shareholder meetings in the way, that all notices must be received seven days in advance in order for the resolutions to be valid.
The full Judgment (in Estonian) can be found here.
You may now wish to review the corporate governance of your Estonian company to identify any action that you wish to take in response to the new case law. Please contact us if you would like to discuss the options available in more detail.
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