Țuca Zbârcea & Asociații – EUR 5 million win for the Property Fund
The High Court of Cassation and Justice has awarded the Property Fund the right to collect 15% of the dividends of SNGN Romgaz Mediaș S.A. for 2005, when the fund became a shareholder in the gas company.
On June 7, the High Court of Cassation and Justice granted the final appeal of the Property Fund, represented by Țuca Zbârcea & Asociații, ordering SNGN Romgaz Mediaș to pay the fund RON 18,510,458 worth of dividends, corresponding to the 2005 net profit distribution. Legal interest, calculated as of 2007, will be added to the principal debt.
Țuca Zbârcea & Asociații’s legal team was coordinated by partners Robert Roșu and Ioana Hrisafi-Josan.
The final decision handed down by the High Court of Cassation and Justice entirely overturned the judgment passed in the appeal stage by the Alba Iulia Court of Appeal in December 2010, which stated that a court of law cannot overrule the shareholders’ wishes as to how dividends are to be allocated.
“The Supreme Court’s decision could prove tremendously useful in that it may provide us with a test case of the legal effectiveness of resolutions passed by General Shareholder Meetings. It demonstrates that the shareholders’ decision not to seek in court the annulment of General Shareholder Meetings’ resolutions does not necessarily mean they are legally effective,” said Robert Roșu, partner at Țuca Zbârcea & Asociații.
The Property Fund brought the lawsuit against SNGN Romgaz Mediaș in the summer of 2008, claiming 15% of the company’s dividends for the whole of 2005, according to the Property Fund’s shareholding. As the Property Fund became a shareholder of the company on December 28, 2005, SNGN Romgaz Medias decided in the General Meeting of Shareholders held in November 2007 to allocate dividends worth RON 153,401 to the Property Fund, corresponding to a three-day period of 2005 (28 December through 31 December 2005). The decision of the General Meeting of Shareholders was not challenged by the Property Fund by means of an action for annulment at that time.
Through its decision made this week, the Supreme Court ended a legal dispute that has been going on for three years, during which time the Țuca Zbârcea & Asociații legal team representing the Property Fund has had to deal with complex legal issues surrounding the balance between the court’s need to secure the enforcement of certain mandatory legal requirements and the shareholders’ freedom to shape corporate will. Basically, the former concept’s prevalence over the latter, where observance of public order rules is at issue, was the key argument raised by the Property Fund’s legal team.