in the Annulment of the General Assembly Resolutions of Joint-Stock Companies
Pursuant to Article 445 of the Turkish Commercial Code No. 6102 ("TCC"), an annulment action may be filed against the general assembly resolutions that are contrary to the provisions of the articles of association and especially the rules of good faith.
The persons who may file an action for annulment are set forth in Article 446 of the TCC. Accordingly, shareholders attending the meeting may file an action for annulment against the general assembly resolutions. However, in order for the shareholders present at the meeting to file an action for annulment of the general assembly resolutions of the joint stock company, they must have voted against the general assembly resolution and have their opposition recorded in the minutes of the meeting.[1]
What Is a Dissenting Opinion and How Should a Dissenting Opinion Be Submitted?
As is known, the discussions and resolutions made at the general assembly meeting of a joint stock company shall be recorded with the minutes of the meeting. Pursuant to Article 422 of the TCC, the minutes of the general assembly meeting shall be prepared to include the number of affirmative and negative votes.[2]
In order for those who cast negative votes on the resolutions adopted at the general assembly meeting to file a lawsuit for the annulment of the general assembly resolution, their opposition to the relevant resolution must be recorded in the minutes of the general assembly meeting, which is called a "dissenting opinion".
The Regulation on the Procedures and Principles of the General Assembly Meetings of Joint Stock Companies and the Ministry Representatives to be Present at these Meetings ("Regulation") stipulates that those who dissent to the resolutions adopted at the meeting may add a dissenting opinion to the minutes of the meeting or add the written dissenting opinion to the minutes. Accordingly, the dissent may be made by annotating the minutes of the meeting or may be submitted to the chairman of the meeting in the form of a separate letter of dissent and added to the minutes of the meeting.[3]
With the objection, the shareholder requests that the resolution not be valid. It is not necessary to explicitly state that the expression used is in opposition to the resolution.[4] For example, the Court of Cassation considers the signing of the minutes after the voting in the general assembly by the relevant persons by writing the phrases "those who put a dissenting opinion" or "those who put a dissenting opinion" at the bottom of the minutes where the names and signatures appear. In this case, it is possible to say that there is no obligation for the dissent to be reasoned.[5] However, explanations that remain only at the level of criticism cannot be considered as opposition.[6]
The dissent must be directed to the decision(s) taken at the general assembly meeting. The Court of Cassation does not accept the shareholder's objections to the share ratio as a dissenting opinion.[7]
As is known, pursuant to the legislation, the minutes of the general assembly meeting of a joint stock company shall be signed by the chairman of the meeting and, if the meeting requires the presence of a representative of the Ministry, by the representative of the Ministry. In this case, there is no requirement for the dissenting opinion to be signed by the shareholder or its representative.[8]
Although there is no provision in the legislation regarding the timing of the dissenting opinion, there are different opinions in the doctrine and practice regarding this issue. Therefore, the timing of the dissenting opinion should be addressed in line with the jurisprudence of the Court of Cassation.
In the event of opposition to more than one resolution, the shareholders are given the freedom to have the dissenting resolutions recorded separately or collectively in the minutes, and the Court of Cassation states in its decisions that the shareholder who expresses his/her dissent after the voting of each agenda item shall not be required to write a dissenting opinion again at the end of the meeting.[9]
It is important to note that the opposition must be recorded in the minutes after the decision is taken. In the established case law of the Court of Cassation, the expression of opposition to a proposal or the use of a rejection vote in the discussions held before the voting is referred to as "opposition in advance" and it is adopted the view that the condition of litigation is not met with the opposition in advance before the voting.[10]
Conclusion
Shareholders present at the general assembly meeting of a joint stock company may file a lawsuit for the annulment of the general assembly resolution pursuant to Article 446/1-a of the TCC. However, in order to file a lawsuit against the resolution, certain conditions stipulated by the law must be fulfilled.
Pursuant to the case law of the Court of Cassation, having the dissenting opinion recorded in the minutes of the general assembly meeting is a condition for filing a lawsuit for the annulment of the general assembly resolution.
Shareholders shall not fulfill the condition of opposition only by casting a negative vote. In order to fulfill this condition, it is of great importance that the dissenting opinion is recorded in the minutes of the general assembly meeting in accordance with the procedures explained above.
Av. Deniz KARADUMAN
Bensu BAHADIR
[1] In the established jurisprudence of the Court of Cassation, it is emphasized that Article 446 of the TCC No. 6102 regulates the conditions and method of annulment of the general assembly resolutions, the relevant provisions stipulate that the shareholder who is present at the meeting and dissents to the resolution and records this dissent in the minutes may file an action for annulment, this is a condition of the action, and in order for this condition to be met, the dissent must be recorded in the minutes after the resolution. [2] The Condition of 'Having the Opposition Recorded in the Minutes' in the Annulment of General Assembly Resolutions of Joint Stock Companies and Especially the Problem of the Validity of 'Advance Opposition', Ebru TÜZEMEN ATİK, Hacettepe Journal of Law Faculty, 12(1), 2022, p.1028 [3] In the decision of the 11th Civil Chamber of the Court of Cassation dated 25.11.2021 and numbered 2020/40 E., 2021/6549 K.; "(...) in order to file an annulment lawsuit, casting a negative vote alone is not sufficient, and it is also a condition of the lawsuit that the shareholder who casts the dissenting vote records his/her dissent in the minutes after the voting or submits a separate petition in this regard.(...)" [4] The Conditions for the Shareholder Present at the Meeting to File an Annulment Action Against the General Assembly Decisions of the Joint Stock Company and Especially the Opposition Commentary, Ali Haydar YILDIRIM, İnönü University Journal of Faculty of Law, Volume:7, Issue:2, 2016, p. 407. [5] Decision of the 11th Civil Chamber of the Court of Cassation dated 16.06.2016 and numbered 2015/15655 E., 2016/6700 K. [6] In its decision dated 02.10.2006 and numbered 2005/8763 E., 2006/9604 K.; "(...) Pursuant to Article 53 of the Cooperatives Law No. 1163, the shareholder who participated in the general assembly may file a lawsuit for the annulment of the decisions taken by dissenting to the decisions taken and recording this situation in the minutes, claiming that they are contrary to the law, the articles of association or the rules of good faith. In the case in dispute, although the plaintiff participated in the general assembly, there is no record of his opposition to the decision he requested to be annulled, and it is understood that he only wished that the landscaping was not done. On the other hand, it has not been claimed and proved that there was opposition to the transactions and decisions taken and that the requests in this direction were prevented from being written in the minutes of the general assembly. In addition, the reasons put forward as grounds for annulment do not constitute a violation of the mandatory rules of the law and are grounds for annulment. In that case, while the court should have decided to dismiss the lawsuit on the grounds that the plaintiff did not duly write a dissenting opinion against the general assembly resolution that the plaintiff wanted to be annulled and therefore did not have the right to file a lawsuit, it was not deemed correct to establish a judgment with the written reasoning, but the decision, which is correct in its result, should be approved for the reason explained. (...)" [7] In the decision of the 11th Civil Chamber of the Court of Cassation dated 13.02.2019 and numbered 2017/4101 E., 2019/1148 K.; it was stated that "(...) in the minutes of the general assembly meeting, the plaintiff has a reservation record that the share ratios were not accepted, and this record will not be considered as a dissenting opinion (...)". [8] İsmail KIRCA, Nullity of Joint Stock Company General Assembly Decisions, On İki Levha Yayınları, Istanbul, 2022, p. 153 [9] In the decision of the 11th Civil Chamber of the Court of Cassation dated 18.11.2020 and numbered 2020/537 E., 2020/5167 K.; "Since the plaintiff stated that he dissented after the voting of each agenda item, it is not necessary to write a dissenting opinion again at the end of the meeting. In this case, while the court should make a decision according to the result to be obtained by examining the merits of the dispute in terms of decisions numbered 1, 3 and 4 by accepting that there is a proper dissenting opinion, it has not been deemed correct to establish a written judgment, and for this reason, the judgment has to be reversed in favor of the plaintiff." [10] According to the decision of the 11th Civil Chamber of the Court of Cassation dated 19.06.2019 and numbered 2018/2156 E., 2019/4580 K.; "In addition, in order to fulfill the litigation condition of opposing a decision and recording the opposition in the minutes, the opposition must be recorded in the minutes after the decision taken. This opinion can be explained as there is no opposition to the decision in advance." In the same direction: Decision of the 11th Civil Chamber of the Court of Cassation dated 21.01.2021 and numbered 2019/2293 E., 2021/275 K., Decision of the 11th Civil Chamber of the Court of Cassation dated 14.01.2020 and numbered 2019/2145 E., 2020/357 K., Decision of the 11th Civil Chamber of the Court of Cassation dated 03.04.2019 and numbered 2018/375 E., 2019/2622 K.
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