Dispute resolution

Spanish Supreme Court ratifies the unenforceability of shareholder agreements against a company

Published on 27th May 2022

The ruling deals with one of the most controversial areas of corporate law as it once more confirms the doctrine on the validity and efficiency of shareholder agreements among those invoking them.

Ruling 300/2022, issued by the Supreme Court on 7 April 2022, deals with one of the areas that sparks the most interest and debate in corporate law: the enforceability of extra-statutory agreements against a company. The Ruling reaffirms a well-known doctrine: that the mere contravention of shareholder agreements is not enough to challenge a corporate resolution.

Enforceability of shareholder agreements

The lawsuit was filed by a shareholder seeking to enforce, against a company and its universal successor by segregation, the content of several shareholder agreements whose signatories were the only shareholders. Therefore, what was at issue was the enforceability and validity of the agreements entered into by all the shareholders - also known as omnilateral shareholder agreements - against the company.

The complainant argued that the existing regulation is legally lacking and that the doctrine could be changed. This argument was in line with a body of criticism of part of the doctrine that has emerged from certain case-law of the Supreme Court, whose rulings on the issue have suffered from an apparent internal inconsistency over many years.

Supreme Court's reasoning

In their ruling, the judges considered the issues from the outset, placing in the forefront of their arguments the doctrine of the unenforceability of extra-statutory agreements against a company. After documenting it, they set out the different views on which the Supreme Court previously based its ruling, that is:

  • Contractual: the principle of relativity of contracts determines that, for third parties, a contract is res inter alios acta (something carried out between others) and, therefore, nobody can be forced by a contract which they have not approved or intervened in, or suffer the negative consequences from a non-compliant act in which they have had no part.
  • Statutory: article 29 of the Spanish Companies Act (Ley de Sociedades de Capital) ("LSC") - and its legal precedents - sets out that the company does not have to enforce any agreements limited to its shareholders.
  • Lex certa: the grounds to challenge corporate decisions  are set out in the LSC (article 204 LSC), which are numerus clausus and do not mention the infringement of any shareholder agreements. 
  • Area or self-responsibility: the defence of the extra-statutory agreements, provided that they are not included in the by-laws , cannot be sought since the parties have expressly avoided it. To that end, enforceability of such agreements may be sought through the remedies provided in general contractual law.

All of the above, warned the Supreme Court, must be understood without prejudice to the intervention, when appropriate, of the limitations imposed by the requirements arising from good faith and the prohibition of abusing the law. However, application of these general principles of law must align with the purpose they fulfil in the Spanish legal system , and under no circumstance may they be applied in an unfair or generalised manner.

In this regard, the ruling recalls the different matters in which, when applying the esteemed general law of good faith, the doctrine of one's actions and/or the principle of legitimate expectations, the prevailing doctrine on unenforceability has been corrected, precisely choosing the opposite solution, that is, the cancellation of the corporate agreement as a result of the infringement of the omnilateral shareholder agreement.

In this respect, and possibly expecting criticism, the judges of the Supreme Court noted that the solutions adopted in those cases were not based on investment or the express derogation of the general rule of unenforceability of the shareholder agreements in the company, but were the result of a condition that moves in a different sphere, which is the principle, established in our legal conscience, that nobody can benefit from their wrongdoing. 

Osborne Clarke comment

The ruling does not encourage the thesis that the complainant proposed concerning the possible infringement of the corporate interest, acknowledging that the Spanish legal order does not have a common position on what is meant by the interests of a company.

In summary, the Supreme Court has once more confirmed its doctrine on the validity and enforceability of shareholder agreements among those invoking them, pointing out that if the necessary provisions of the shareholders agreement are not transcribed in the by-laws of the company, such agreement  cannot be enforced against third parties, including the company itself.


* This article is current as of the date of its publication and does not necessarily reflect the present state of the law or relevant regulation.

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