The claimant company applied to the arbitration court with a demand to invalidate the loan agreement (major transaction) between it and its individual member and to apply the consequences of the transaction invalidity. The court of first instance referred the case to the court of general jurisdiction. The court of appeal agreed with this position and upheld the decision of the court of first instance.

The Supreme Court of the Russian Federation pointed out: a claim for invalidation of a major transaction made in violation of the procedure for obtaining consent to its completion may be filed by a company, a member of the board of directors (supervisory board) of the company or its member(s) with at least one percent of the total number of votes of the company’s members [1].

Based on this provision, a dispute on invalidating a major transaction made in violation of the requirements for it provided for by law (including in the absence of a decision on its approval) is a corporate one even if the company itself applies to the arbitration court [2].

In the cases established by Part 6, Article 27 of the Arbitration Procedure Code of the Russian Federation and other federal laws, the consideration of the case falls within the competence of arbitration courts, regardless of whether the participants in the legal relations from which the dispute or claim arose are legal entities, individual entrepreneurs or other organizations and citizens [3]. Such cases, in particular, include disputes on the claims specified in Part 1, Article 225.1 of the Arbitration Procedure Code of the Russian Federation.

The Supreme Court of the Russian Federation sent the case to the arbitration court of first instance for consideration on the merits, pointing out that the lower courts’ reference to Clause 1 of the Review of Judicial Practice on Certain Issues of Applying Legislation on Business Companies (approved by the Presidium of the Supreme Court of the Russian Federation on December 25, 2019) (hereinafter referred to as the Review), in support of the conclusion that the competent court in the dispute under consideration is the court of general jurisdiction, cannot be taken into account, since the example given in the Review is not identical to the relations of the parties to the dispute, and that the conclusions of the court of the first instance and the court of appeal on the general jurisdiction of this dispute are erroneous [4].

  • [1] Part 4, Article 46 of Law No. 14-FZ “On Limited Liability Companies” dated February 08, 1998
  • [2] Ruling No. 69-КГ21-9-К7 of the Judicial Panel for Civil Cases of the Supreme Court of the Russian Federation dated October 05, 2021
  • [3] Paragraph 3, Clause 4 of Ruling No. 46 of the Plenum of the Supreme Court of the Russian Federation dated December 23, 2021 “On the Application of the Arbitration Procedure Code of the Russian Federation When Considering Cases in the Court of First Instance”
  • [4] Ruling No. 305-ЭС22-17536 of the Supreme Court of the Russian Federation dated January 24, 2023
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