Successfully represented the client regarding ungrounded request to limit his rights as a shareholder

Our team successfully represented our client in the Court of Appeal of Lithuania. The court did not believe the arguments of the other party and upheld the ruling of the court of first instance, which rejected the application for interim measures (to prohibit our client from taking decisions on increasing the share capital of his company).

In this case, the opposing party filed a claim demanding the recognition and registration of his ownership of the company’s shares and requested our client be temporarily prohibited from taking decisions on increasing the share capital of the company.

The opposing party presented new evidence, which should and could have been submitted to the court of first instance, but which, however, was submitted only after the unfavorable court decision had been passed. Therefore, the court found such action unfair and incompatible with the parties‘ duty to ensure the promptness and concentration of the proceedings. In addition, the court took into account the fact that the opposing party did not see a threat to his own interests as a shareholder for five years and therefore did not care. The opposing party did not try to prove the existence of a threat that the contract may not be executed if the defendant is not subject to temporary restrictions on the disposal of shareholders‘ rights.

The court also ruled that the requested interim measures are not related to the claim, and the prohibition on exercising shareholders‘ non-property rights  (e. g. to decide on increasing the share capital of the company) may be restricted only in exceptional cases.

Experience