Who (Else) Can Claim The Nullity Of A Share Transfer?

Published date23 October 2023
Subject MatterCorporate/Commercial Law, M&A/Private Equity, Corporate and Company Law, Shareholders
Law FirmSchoenherr Attorneys at Law
AuthorMs Madalina Neagu and Alexandra Smahon

Can one or more of a company's shareholders claim that a transfer of shares to third parties by other shareholders is null, even if the claimants were not interested in acquiring those shares? And when faced with such a claim, would Romanian courts rule in favour of the claimant? A recent court ruling has answered both questions with a resounding "yes", opening new horizons in M&A-related matters in Romania.


In the court case, a minority shareholder of a joint-stock company claimed that a share transfer that took place within the company was illegal. The claimant requested the absolute annulment of the share sale-purchase agreement. It argued that this transfer had not been approved by the company's board of directors, in accordance with the articles of association in force at the time of the transfer.

The first-instance court ruled against the claim, asserting that the minority shareholder was not an interested party in relation to the transaction. On appeal, the court's decision was annulled in part as regards the decision to admit this lack of interest. The parties to the dispute challenged the appeal ruling and the case was referred to the Romanian High Court of Cassation and Justice ("High Court").

Court ruling

In its decision, the High Court ruled that a shareholder has an interest in challenging in court the legality of the acquisition of the shares by third parties within the company, even if the claimant did not intend to acquire them.

According to the court, that shareholder's role as an interested party in relation to the transaction arose out of its direct interest in ensuring the proper functioning of the company and the proper conduct of its business. Hence, the court argued that the shareholder's interest is all the more obvious, since it alleged in the case that the articles of association had been infringed and that an unlawful cause existed.

In addition, the court ruled that the...

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