1-) THE CONCEPT OF “NULLITY” (ANNULMENT)
The intendment of the “nullity” by law, can be define as being legally invalid Yet, the nullity of a General Assembly Resolution means that, the resolution in question does not have any legal result and/or effect from the transaction date, because of a not including the mandatory provisions.
2-) THE CURRENT SITUATION OF “THE CONCEPT OF NULLITY” AND “ACTION FOR GENERAL ASSEMBLY RESOLUTION’S ANNULMENT” UNDER 6102 NUMBERED TURKISH COMMERCIAL CODE
Altohugh “the concept of nullity” and procedural requirements of “the action for General Assembly Resolution’s annulment” were arranged in abrogated Turkish Commercial Code; there was not any special regulation about the concept of “nullity”. In other words, the legal cases and/or reasons about “annulment of General Assembly Resolution” were put into practice under general provisions.
In 6102 numbered Turkish Commercial Code the law maker has not made a specific definition about the concept of “nullity and/or annulment”, too, but on the other hand, the current Commercial Code includes “nullity concept” which has given place at:
a-) 6098 numbered Turkish Code of Obligations”
b-) Doctrine and practice (despite there was not any special clause or any definiton in abrogated Commercial Code )
In fact, the annulment reasons that counted in 6102 numbered Turkish Commercial Code, have not been limited by the reasons stated in 6098 numbered Turkish Code of Obligations”; some specific reasons particular to Joint Stock Corporations have been added to them.
3-) PROCEDURAL REQUIREMENTS AND PROPERTIES OF THE “ACTION FOR GENERAL ASSEMBLY RESOLUTION’S ANNULMENT IN JOINT STOCK CORPORATIONS
In consequence of the lawmaker counted the concept of nullity by taking the practice and doctrine into consideration, and also arranged it more detailed than the abrogated Turkish Commercial Code; the 6102 numbered Turkish Commercial Code includes some special provisions about the procedural requirements of nullity action. With a more open expression; the annulment reasons of General Assembly Resolutions and also Board Of Directors Decisions of Joint Stock Companies has gained a legal status in 6102 numbered Turkish Code Article 391, 445 and 447.
There is not any legal term for The Actions for General Assembly Resolution’s Annulment. For this reason, the nullity of General Assembly Resolution can be alleged and litigated at any time. Yet, the legal precedents of Turkish Court of Appeal’s are pursuent to that rule.
Moreover; according to existing legal arrangements, the annulment of the General Assembly Resolution can be alleged by anyone who has legal benefit on it, by the way of making an objection and/or filing a legal action. Because of the null General Assembly Resolutions will deemed as “non-exist and also counted as not any legal effect from the beginning, such actions have the characteristics of the declaratory actions.
According to the article 447 of the 6102 numbered Turkish Commercial Code;
“In this sense, the general assembly resolutions which, in particular;
a)restrict or remove the shareholders’ right to attend the general assembly meeting, their voting rights, their rights to take an action and their irrevocable rights deriving from the law,
b)restrict the shareholders’ rights to obtain information, to inspect and to audit (regulated under Articles 437 and 438 of the TCC) beyond the legally permissible degree,
c)distort the main structure of the company (e.g. imposing additional payment obligation to shareholders in order to cover the balance sheet losses, which is contrary to the principle of limited liability)
d)distort the main structure of the company (e.g. imposing additional payment obligation to shareholders in order to cover the balance sheet losses, which is contrary to the principle of limited liability)
e)breach the provisions on capital protection (such as, the resolutions contrary to Article 343 of the TCC which requires court valuation in case of capital in kind contributions, or contrary to Article 344 of the TCC which regulates the payment terms of the capital in cash, or contrary Article 509 of the TCC which regulates that dividend shall only be paid from the net profit for the period and freely disposable reserves)
are deemed null.
”The decision making body of Joint Stcok Corporation is General Assembly. Owing to that, The Actions for General Assembly Resolution’s Annulment should bring against the legal entity of the Corporation.
In jurisdictions of General Assembly Resolution’s Annulment, the competent and authorized court will be the commercial court that based on the Corporations place of operation. If there is no commercial court, the civil court will have the sustained competence due to the absence of a commercial court. These provisions has regulated under the Articles 4 and 5 of the 6102 numbered Turkish Commercial Code;
448 and the rest articles of 6102 numbered Turkish Commercial Code inculdes some procedural regulations concerning with the action for General Assembly Resolution’s annulment. These special regulations can be counted as; “the announcement of the action and also the date of trial in line with related provisions” , “cautions to be deposited upon a lawsuit within the framework of regulations”, “taking the board members opinion about the nullity action”, “postponement of execution by the competent court” , “ the effectiveness and bindingness of the nullity decision on all shareholders,” , and “the obligation of registration of the nullity decision on commercial register and publishment of the decision on corporations legal website”
Even most of these provisions that stated at the article 448 and following articles before mentioned are pertained to “the action for General Assembly Resolution’s avodience; these provisions are also applicable for “the action for General Assembly Resolution’s Annulment”, except the Article 448/2.
In addition, that should be remarked that; depositing a security deposit to guarantee the corporations possible losses becaasue of “the action for General Assembly Resolution’s Annulment” which has stated at Article 448/3, in not a prerequisite. The court decides upon shareholders request concernig this matter, if such a deposit is necessary or not. Also, the court determines the amount of deposit.
Finally, despite there is not any legal term for The Actions for General Assembly Resolution’s Annulment as mentioned above, the court of appeal doesn’t allow that situation to be abused with bad faith. In other words, such cases should bring in a reasonable term.
4-) CONCLUSION
Contrary to abrogated Turkish Commercial Code, the 6102 numbered Turkish Commercial Code includes some special and more detailed provisions about the procedural requirements of nullity action with the Article of 448 and following, on the purpose of filling the legal gap on that issue.
In the event of the annulment reasons that counted in 6102 numbered Turkish Commercial Code, have not been limited by the reasons stated in 6098 numbered Turkish Code of Obligations” exist, the shareholders have right to bring the action for General Assembly Resolution’s annulment. In order not to face with loss of a right, acting in line with the special provisions and following the procedural requirements regarding to annulment has big importance.
