Loss of shareholder status due to underestimation of the amount in dispute in an action for avoidance

It is a truism that one should not save money at the wrong end. A recent judgement by the Darmstadt Regional Court (LG) reminds us of this, in which the action for rescission brought by a GmbH shareholder against his exclusion is deemed to be time-barred due to lack of service "in the near future".

Facts of the case

Plaintiff (K) and intervening party (N) are brothers and have been involved in shareholder disputes for some time. K held 49.5% and N 50.5% of the shares in the defendant GmbH. At a disputed shareholders' meeting at the end of December 2023, D was elected chairman of the meeting at the proposal of N, with K objecting. With a majority of votes in favour of N, it was decided in agenda items 3 to 5, among others, that K would be removed from the office of managing director with immediate effect, that his employment contract would be terminated with immediate effect for good cause and that K would be excluded from the company again for good cause as a precautionary measure.

According to the articles of association, appeals of any kind were only permitted within a period of one month after the resolution was passed. K's statement of claim reached the regional court on the last day of this period at the end of January 2024, but was only served on 18 October 2024.

One of the reasons for this was that K's legal representative had stated a considerably too low value in dispute of only EUR 25,000 in his statement of claim, which is why the costs officer requested a correspondingly underestimated advance on court costs on 7 February 2024, which the plaintiff paid on 13 February 2024. In a letter dated 15 February 2024, the chairman of the Regional Court informed the plaintiff's representative that the statement of a value in dispute of EUR 25,000 was not comprehensible. In a decision dated 21 March 2024, the chamber provisionally set the amount in dispute at EUR 7,396,464, taking into account further statements by the plaintiff. The advance payment from this amount in dispute was requested on 8 April 2024 and paid by the plaintiff on 25 July 2024.

With his action for annulment from the end of January 2024, K requested in particular that the resolutions on agenda items 3 to 5 be declared null and void.

Decision

The Regional Court dismissed the action as unfounded.

The action for avoidance had not been filed within the one-month avoidance period stipulated in the articles of association. The Regional Court correctly assumed that the action must not only have been received by the court within this period, but must also have been served on the defendant. This did not follow from the wording, but from the meaning and purpose of this provision, which was to provide the shareholders with certainty about the validity of resolutions passed for reasons of legal certainty. However, at the time the action was served, the period for contestation had long since expired.

The action was also not deemed to have been filed in due time because the plaintiff had already paid the advance on court costs calculated on the basis of the insufficient amount in dispute five days after the first request for costs of 7 February 2022 and therefore service would have been effected "imminently" within the meaning of Section 167 ZPO. In this case, the action would still be deemed to have been filed in good time despite late service. However, the requirements of Section 167 ZPO would not have been met. Service "shortly" after receipt of the application by the court requires service within a period that is reasonable in the circumstances, even a longer period, provided that the party or its authorised representative has done everything reasonable to ensure prompt service, taking into account the overall situation. In this context, delays of up to 14 days attributable to the party initiating service are generally to be regarded as minor and therefore acceptable.

However, in the opinion of the Regional Court, these conditions were not met in this case.

The plaintiff's representative, a lawyer specialising in commercial and corporate law, had deliberately understated the value in dispute, which was considerably too low at only EUR 25,000, in order to save the plaintiff a considerable amount of court costs. Due to this deception by the costs officer, the plaintiff could not have assumed that the action would be served after payment of the (significantly too low) advance on costs requested on 7 February 2024 and that he would have done everything necessary to do so. On the contrary, the plaintiff had only provided all the cooperation required for proper service of the action when the full advance on costs was paid on 25 July 2024 from the amount in dispute provisionally determined by order of 21 March 2024 in the amount of EUR 7,396,464 (!). However, this delay of several months caused by the incorrect information was no longer to be regarded as merely minor and therefore acceptable.

For procedural reasons, the Regional Court then had to take a position on the question of whether the resolutions in dispute could possibly be null and voidby analogy with Section 241 No. 1 of the German Stock Corporation Act (AktG) . This was because, according to the Federal Court of Justice (BGH), an action for rescission always includes an application for a declaration that the contested resolutions are null and void. In the present case, however, the Regional Court did not consider there to be any indications of nullity.

Remarks

There are many constellations in which it is important to file an action in good time, which regularly includes not only the receipt of the action by the court, but also its formal service on the defendant, which is what makes the action legally pending. This certainly includes the suspension of the limitation period for claims that threaten to expire at the end of a year (see Section 199 (1) BGB, so-called "year-end limitation period").

This also includes the right of shareholders or GmbH partners to challenge unfavourable resolutions of the respective shareholders' meetings. In accordance with (or analogously for the GmbH) Sections 243, 246 (1) AktG, this is subject to a contestation period of one month after the resolution is passed. If resolutions are not effectively contested within this period, they become incontestable and are deemed to be "cured", so to speak, despite any defects. This is only different if the defects in the resolution are so significant that the resolutions were void from the outset. In this case, the nullity does not have to be ordered by the court (as in the case of an action for rescission, see Section 248 AktG), but merely established. In procedural terms, this is done via the action for annulment pursuant to Section 249 AktG, which is not subject to a time limit. This is also the reason why the Regional Court had to review the resolutions pursuant to agenda items 3 to 5 for possible nullity in its decision: Null and void resolutions are legally non-existent from the outset and therefore cannot be "cured" by the expiry of the period for contestation.

Having said this, the special feature of the judgement is that the Regional Court, in an evaluative decision on the existence of the requirements of Section 167 ZPO (service "imminently"), denied the plaintiff the assistance of this standard because his legal representative had deliberately stated a value in dispute that was more than EUR 7.3 million (!) too low. As far as can be seen, this constellation in connection with the inapplicability of Section 167 ZPO is not found in the relevant commentary literature. Nevertheless, the judgement of the Regional Court is to be welcomed without reservation. This is because, in the opinion of the Regional Court, the grossly negligent behaviour of its legal representative was clearly intended to protect the plaintiff from being burdened with a considerable advance on court costs, as it had only paid EUR 1,233 instead of the advance on costs of EUR 93,675 actually incurred. The plaintiff thus deliberately and unlawfully attempted to obtain immediate service of the action and thus the fiction of retroactivity under Section 167 ZPO. The resulting delay between the payment of the insufficient advance on court costs on 13 February 2024 and the payment of the correct advance on 27 July 2024 was therefore attributable to the plaintiff, with the result that service was not effected "promptly" within the meaning of Section 167 ZPO. As a result, the "tactics" of the plaintiff's lawyer in breach of duty ultimately led to the plaintiff losing his share in the company, among other things.

If the judgement becomes final, the plaintiff's attorney will probably be confronted sooner or later with recourse claims by the plaintiff, whereby it should be noted that the limitation period for any recourse claims will probably begin to run when the first instance judgement is issued. Should it therefore be necessary in future to suspend the limitation period for any recourse claims by filing an action, the plaintiff should be warned accordingly.

(Regional Court Darmstadt, judgement of 5 May 2025 - 18 O 5/24)