The Court of Appeal in Warsaw, in a decision dated 15 March 2019 (VII AGz 100/19), deemed that it is permissible to seek in one statement of claim the expulsion of more than one partner from the partnership (art. 63 § 2 of the Commercial Companies Code in conjunction with art. 89 of the Commercial Companies Code).
The judgment was handed down in a corporate dispute between the partners of a partnership, composed of 7 partners. In November 2018 two partners jointly undertook a range of actions which destabilized the activity of the company and damaged its interests.
In response to those actions five partners filed a suit for the expulsion of these two partners from the company. The Regional Court in Warsaw, deeming the claim to be credible, secured the suit by suspending the defendants’ right to manage the company’s affairs and to represent it.
The defendant partners appealed against this decision, arguing – by citing statements of certain representatives of the legal doctrine – that the provision contained in art. 63 § 2 of the Commercial Companies Code in conjunction with art. 89 of the Commercial Companies Code allows for a demand for expulsion of only one partner if an important reason exists with regard to that partner for him to be expelled from the company, and the suit must be filed by all the remaining partners. The defendants also argued that if an important reason exists with regard to more than one partner, the proper legal measure is a suit for a dissolution of the company, which the defendants filed in parallel.
The Court of Appeal in Warsaw dismissed the plaint as it did not share the view that it is permissible to demand expulsion from the company of only one partner. The Court of Appeal accepted that a functional interpretation of that provision runs contrary to such an interpretation. A dissolution of the company in a situation where the remaining partners expressed their desire to continue it would be an irrational act and would de facto lead to the result sought by the partners subject to expulsion. The Court also concluded that the defendant partners, in filing the suit for a dissolution of the company, essentially confirmed the fact that the conflict which existed in the company could not be resolved, and thus confirmed the existence of grounds for their expulsion from the company.
The lawyers involved in the case were from the SK&S M&A Department, Łukasz Berak (Partner), as well as from the Litigation Department: Rafał Waszkiewicz (Partner), Jakub Urbanowicz (Senior Associate) and Marcin Obłoza (Associate).