Nejvyšší soud se vyjádřil ke střetu zájmů jednatele

The Supreme Court ruled on the conflict of interest of the managing director

On 5 October 2022, the Grand Chamber of the Supreme Court decided a case concerning a conflict of interest of a managing director of a limited liability company.

The subject of the dispute was the assessment of the validity of an arbitration clause entered into by the company's former managing director and shareholder as part of a settlement agreement with the company. The former managing director not only acted as a party to the contract on his own behalf when concluding the agreement, but also had to act for the company as the other party to the contract as its statutory body, without informing the company's general meeting without undue delay of his intention to conclude the settlement agreement.

Pursuant to Section 55 of Act No. 90/2012 Coll., on Commercial Companies and Cooperatives ("Company Code"), a member of an elected body of a company who intends to enter into a contract with the company that does not fall within the scope of normal business dealings is obliged to inform the relevant body of the company of his intention without undue delay. The latter may prohibit the conclusion of such a contract. Similarly, a member of an elected body is obliged to inform the company pursuant to Section 54 of the Company Code if he becomes aware that in the performance of his duties there may be a conflict of interest with the interests of the company. In such a case, the competent body of the company has the possibility to suspend the member of the elected body in a conflict of interest from holding office.

In its judgment, the Supreme Court evaluated the existing case law and sided with the minority view presented in the literature regarding the consequences of failure to comply with the above-described information obligations under Sections 54 and 55 of the Company Code. If the managing director fails to comply with the information obligation or acts on behalf of the company despite the fact that he has been suspended from office or prohibited from concluding a specific contract, he cannot represent the company due to a conflict of interest (Section 437(1) of Act No. 89/2012 Coll., Civil Code; hereinafter referred to as the "Civil Code"). He is therefore not entitled to represent the company. Therefore, the company will not be bound by such a legal action of the managing director (towards a non-bona fide third party). The company may, however, approve such legal action of the managing director subsequently and (only) without undue delay after becoming aware of it (pursuant to Section 440(1) Civil Code).

In practice, this conclusion may have significant consequences. If, for example, the validity and binding nature of legal acts performed by the company's executive officer is retrospectively reviewed in the course of a legal review, it will generally no longer be possible to make the disputed legal acts binding on the company once the short time limit for subsequent approval by the company has expired.

The Supreme Court also concluded that the fact that another executive, i.e. another representative of the company, will conclude the contract with the managing director (as the other party to the contract) on behalf of the company will not change the above conclusions. Thus, the rules on conflict of interest (in particular the information obligation under Section 55 of the Company Code) cannot be avoided by this change in the persons representing the company.

If you are interested in more detailed information, please also contact the authors of the article or other members of EY Law or the EY team with whom you are working.

Authors:

Vladimír Petráček

Klára Hurychová