Dmitry Uryakin has assessed for Pravo.ru the likely position of the Supreme Court of the Russian Federation in a dispute over the exclusion of one of the participants from the company

This week, the Supreme Court of the Russian Federation will consider a dispute over the expulsion of one of the participants from Yugons-Agro. In 2017, the organisation’s director Georgy Nurakhmetov sold his share to his partner Vladimir Sorokin. The latter in 2019 transferred all the property of the enterprise to other companies at a price five times lower than the market price. Georgiy Nurakhmetov obtained his share in Yugons-Agro back through the court and secured the return of the underpriced property. He then applied to the court with a demand to exclude Sorokin from the company’s participants, as his actions had led to the termination of the organisation’s activities. The courts of three instances refused the plaintiff, pointing out that a corporate conflict is not a reason to kick the defendant out of the company.

Dmitry Uryakin, Senior Associate, Head of General Business practice at Maxima Legal, told Pravo.ru that in a recent ruling on the case of Regionotkhody (case No. A40-260466/2021), the Supreme Court of the Russian Federation stated that the members of a company are obliged to act in its interests and strive to achieve a common goal. If one of them systematically violates this duty, acts only in its own interests and thus harms the company, it can be excluded, the expert noted. The courts did not take this position into account and limited themselves to the “duty” phrases that a corporate conflict is not a reason for exclusion. Therefore, according to Dmitry’s assessment, the Supreme Court of the Russian Federation will cancel the acts on the case and send it for a new consideration in the first instance.

To read the full article (in Russian) please see Pravo.ru website>>>