OGH: Injunctive relief based on syndicate agreements
In the case at hand, the Austrian Supreme Court (Oberster Gerichtshof, OGH) examined an application for an injunction by a minority shareholder against a shareholder exclusion under the Act on the Exclusion of Shareholders (Gesellschafter-Ausschlussgesetz, GesAusG).
The jeopardised party (applicant) and the respondent are the sole shareholders of a company, with the applicant holding only 9.99% of the shares in the share capital. The articles of association stipulate that all transfers of shares, as well as resolutions on amendments to the articles of association and restructuring under company law require the consent of the minority shareholder. In a syndicate agreement concluded at a later date and a subsequent addendum between the two shareholders and the company, this circumstance was addressed again and it was further stated that it was intended to make the minority shareholder the majority shareholder by means of a share transfer to 50.01%, whereby a 50:50 distribution of profits was also to be made.
Two years after the conclusion of the syndicate agreement, however, the respondent convened an extraordinary general meeting for the purpose of excluding the applicant pursuant to Section 1 GesAusG.
The applicant then requested an injunction stating that, among other things, such resolutions may neither be initiated nor passed. The respondent replied that neither the partnership agreement (the articles of association) nor the syndicate agreement provided for an exclusion of the GesAusG; moreover, there was no jeopardy.
The court of first instance issued the interim injunction, which the Court of Appeal in turn reversed.
The OGH stated:
In principle, a general obligation to cease and desist does not constitute a sufficiently specific enforcement order. However, the concept of the specificity of an injunction request must not be interpreted too narrowly, as it is practically impossible to describe all conceivable acts of intervention and to mark them so clearly that their violation can be enforced under Sec. 355 of the Enforcement Order (Exekutionsordnung, EO). The broader request for an injunction was therefore necessary in order not to make it too easy for the respondent to circumvent the order. In the opinion of the OGH, the syndicate agreement concluded in the case at hand, including the addendum, is also to be understood in a fair manner as being about securing the applicant as a future majority shareholder and thus may not be excluded without her consent.
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