Corporate Disputes

Corporate disputes are one of the most widespread categories of cases heard in court. They are sparked in light of disagreements that happen between participants, officials within a legal entity (shareholders, founders, directors, representatives), or between a legal entity and its participants.

The main reasons corporate disputes take place are:

• disagreements regarding the way an organization should be managed. This may include disputes regarding executives’ authority to take certain actions; the decisions they make; the way they distribute profits and dividends; as well as other issues;
• disagreements on amendments to their articles of association, founding documents, and changes registered at the USRLE;
• disagreements regarding the ownership of stock, shares within a reserve capital, assets, and other securities;
• conflicts revolving around a legal entity's bankruptcy or transaction disputes;
• disagreements between partners on issues related to the division of property, the liquidation of a legal entity, compensation payments, et cetera.

In the case that a corporate dispute cannot be resolved within the organization, the participants go to court to resolve it.

Commercial court:

This is the most widespread venue for resolving corporate disputes. This entails filing a lawsuit at a state court in order to defend rights and interests that the filer deems to have been violated.

Arbitration tribunal:

This is an alternative method of resolving disputes, which presumes going to an independent adjudicator to resolve the dispute.

The court hearing starts with the submission of the lawsuit in which all the circumstances of the case and all of the plaintiff's demands are listed. The court examines the lawsuit, conducts a preliminary hearing, and sets a date for the main hearing to take place.

The consequences of the resolution of corporate disputes may be various penalties, such as reimbursement of losses, payment of compensation, as well as deprivation of rights to take part in a corporation.

If a corporate conflict has arisen in your company, don't put things off until it becomes too late to deal with them. Get in touch with us. We will evaluate your prospects and propose a solution for the situation you've found yourself in. After that, we will help defend your interests in court.

This is the category of disputes revolving around legal entity creation, management and participation.

In practice, the cases that are most commonly brought for legal action are those regarding resolutions adopted at general shareholders meetings or the actions taken by executive boards in managing a company are appealed, as well as disputes related to the reimbursement of losses caused to a legal entity.

Disagreements between shareholders or stockholders don’t just arise in large companies when one or multiple shareholders (or stockholders) are unhappy with certain decisions that were made or have doubts regarding their legality. In small business, the same issue exists as well, since such a business is often started by friends or relatives, and their relationships are built on trust.

An ill-intentioned shareholder will over time try to attain greater control over a company’s management or, on the contrary, impede an organization’s development and activities, for instance, by not taking part in meetings and not voting on important issues, the adoption of which decisions may require a 100% vote.

Avoiding or minimizing the likelihood of having to go to court to resolve a corporate dispute requires taking a careful approach to writing up a company's articles of association. It also requires paying special attention to share alienation procedures as well as the procedure for exiting the company, conducting meetings, and holding votes.

One important aspect of corporate disputes is the judicial jurisdiction they fall under. The jurisdiction of these disputes is only that of an arbitrage court. In certain exceptional cases, they may be transferred for examination to a mediation court but they are never examined in general jurisdiction courts.

Apart from that, lawsuits are examined according to general lawsuit proceedings rules.

If a corporate conflict has arisen in your company, don't wait until things get too far gone. Get in touch with us: we’ll help you evaluate your prospects and defend your interests in court.