Derivative Lawsuit in Ukraine: The Issue of Improving Legal Regulation
Summary: 1. Introduction. – 2. A Plaintiff under the Derivative Lawsuit. – 2.1. General status of a plaintiff. – 2.2. Exercise of procedural rights and obligations. – 2.3. Persons that can file a derivative lawsuit on behalf of a legal entity. – 3. Preventive Mechanisms for Abuse of the Right to File a Derivative Lawsuit. – 4. Other Types of Derivative Lawsuit. – 4.1. Preventive derivative lawsuit. – 4.2. Derivative lawsuit for invalidation of a company’s transaction. – 5. Defendants in a Derivative Lawsuit – 5.1. The issue of financial (civil) and employment (material) liability of a company’s officials. – 6. Business Judgement Rule. – 7. Conclusions.
Abstract
Background: Some jurisdictions provide for the right of members of a corporation to sue on its behalf and in its interests. This remedy is called ‘a derivative action’ (derivative lawsuit), and the right to file such a lawsuit is granted to a company’s members in case the wrongdoers are in its control, preventing the company from taking actions to protect its rights and interests – which is detrimental to the interests and rights of minority shareholders. However, derivative lawsuit’s regulation differs in each jurisdiction despite sharing common features, raising a variety of issues to be resolved.
Methods: In this article, the author points out several issues and their possible solutions, which could be implemented in Ukrainian legislation: property qualification by itself cannot prevent abuse in filing a derivative lawsuit – extended ‘locus standi’ has to be implemented; holders of preferred shares have to be granted the right to file a derivative lawsuit; property qualification has to be substituted with a representation quota for members of non-entrepreneurial corporations; the circle of defendants should include major members (majority of members) and third parties, etc.
Results and Conclusions: The concepts of a preventive derivative lawsuit and a derivative lawsuit for the invalidation of a company’s transaction and possible issues regarding them are analysed. Additionally, the necessity for implementing a ‘business judgement rule’ is emphasised.
About Authors
Heorhii Smirnov
Postgraduate Student, Civil Law Department, Law School, Taras Shevchenko National University of Kyiv, Ukraine
Corresponding author, solely responsible for writing, conceptualization, data curation, and methodology. Managing Editor – Dr. Olena Terekh. English editing – Dr. Sarah White. Competing interests: No competing interests were disclosed.
Grant information: The author declared that no grants were involved in supporting this work.
Copyright: © 2022 H Smirnov. This is an open access article distributed under the terms of the Creative Commons Attribution License , (CC BY 4.0), which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited.
Disclaimer: The author declares that his opinion and views expressed in this article are free of any impact of any organizations.
smirnof.goerge@gmail.com
https://orcid.org/0000-0001-6722-0030
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Смирнов Георгій
ПОХІДНІ ПОЗОВИ В УКРАЇНІ: ПРОБЛЕМИ ТА ШЛЯХИ УДОСКОНАЛЕННЯ ПРАВОВОГО РЕГУЛЮВАННЯ
Більшість юрисдикцій передбачають право членів корпорації подавати позов від її імені та в її інтересах. Такий засіб правового захисту називається «похідним позовом» (a derivative action), і право подати такий позов надається учасникам товариства у випадку, якщо відповідачі знаходяться під його контролем, що перешкоджає компанії вчиняти дії для захисту своїх прав та інтересів, що завдає шкоди інтересам та правам міноритарних акціонерів. Однак правове регулювання похідного позову, незважаючи на спільні риси, відрізняється в кожній юрисдикції, що викликає безліч питань, які необхідно вирішити.
У цій статті автор вказує на декілька проблем та їх можливі рішення, які мають бути імплементовані в українському законодавстві: майновий ценз сам по собі не може запобігти зловживанням щодо подання похідного позову – має бути запроваджено розширене правосуддя; власникам привілейованих акцій має бути надано право подати позов до суду; майновий ценз необхідно замінити на представницьку квоту для учасників непідприємницьких корпорацій; коло відповідачів має включати основних учасників (більшість учасників) та третіх осіб тощо. Проаналізовано поняття превентивного похідного позову та похідного позову про визнання правочину товариства недійсним та можливі питання щодо них. Крім того, наголошується на необхідності впровадження «правила ділового судження».
Ключові слова: похідний позов, майновий ценз, locus standi, правило господарського суду, превентивний похідний позов; похідний позов про визнання правочину товариства недійсним
How to cite it?
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H Smirnov ‘Derivative Lawsuit in Ukraine: The Issue of Improving Legal Regulation’ 2022 1(13) Access to Justice in Eastern Europe 51-75. DOI: https://doi.org/10.33327/AJEE-18-5.1-a000093
