Luat Viet

:: Question :: In order to request to cancel the resolutions of General Meeting of Shareholders (GMS), in case the order and procedures for convening the GMS did not comply with Law on Enterprises and the charter of the company, how should shareholders or shareholder group do in this case?

Answer:

In accordance with to Article 107 of the Law on Enterprises 2005, in order to request to cancel a resolution of GMS, shareholders or group of shareholders shall directly request, or request by written documents the member of Members’ Council, Director or General Director, Inspection Committee to request a court or a arbitrator to consider and cancel such resolution. Then, the shareholders or group of shareholders should take into account some following legal issues:
Firstly: Determine the time-limit of the request
Article 107 of the Law on Enterprises 2005 provides that: within ninety (90) days from the date the minutes of the GMS is received or the minutes of the results of counting of votes being written opinions from the GMS is received, shareholders, members of the Board of Management, the Director (or General Director) and the Inspection Committee shall have the right to request a court or an arbitrator to consider and cancel a resolution of the GMS in case the order and procedures for convening the GMS not in compliance with the Law on Enterprises 2005 and the charter of the company.

Secondly: Determine competent jurisdiction for dispute settlement
Jurisdiction for dispute settlement might be an arbitral organization in one of the following cases: (i) The Charter of the Company stipulate clearly that the jurisdiction is an arbitral organization; or ii) Although the Charter of the Company has no stipulation on the competent arbitrator but after the dispute arises, relevant parties agree to choose an arbitral organization as jurisdiction for dispute settlement.
Competent jurisdiction for dispute settlement might be the court of law in the following cases: (i) There has no stipulations or no explicit stipulations on the jurisdiction for settling such disputes in this cases and after the dispute arises, there is no agreement to choose a specific arbitral organization for the dispute settlement; or (ii) the agreement on Arbitration between parties, although exists, is null and invalid in accordance with regulations and laws on Arbitration.

Thirdly: Submission of the Request for consideration/Petition and provision of evidences
Shareholders or group of shareholders or member of Members’ Council, Director or General Director, Inspection Committee have the right to submit Request for consideration (request for consideration of commercial and business case) for the cancellation of the resolutions of the GMS, or submit a petition (request for settlement of commercial and business dispute) to the competent arbitral organization or court of law for the cancellation of the resolutions of the GMS. Such request or petition shall meet some requirements in accordance with regulations and laws such as: valid copies of the minutes of the meetings (minutes of checking the votes of the GMS), and the resolutions of the GMS requested for the cancellation, evidences proving the incompliance of the order and procedures for convening the GMS with the Law on Enterprises 2005 and the charter of the company such as: valid copies of the charter of the company and other information and documents referring to the GMS issuing the resolutions requested for the cancellation such as: convocation for GMS, list of shareholders entitled to attend the GMS.
In each specific case, arbitrator or court will, based on evidences provided and produced by parties and on the governing regulations and laws, consider the cancellation of the resolutions of the GMS in accordance with the laws.
 

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