Can the general meeting of shareholders cancel the decision on dividend distribution?

The former shareholder of JSC “Polygon” Stepanenko K.S. applied to the court, demanding to recover from the named company the dividends, the decision on payment of which was made by the general meeting of shareholders.

The two courts partially granted the claim.

Position of the cassation:

– the lower courts rejected the company’s arguments about the absence of debt to the plaintiff on payment of dividends with reference to the decision of the general meeting of shareholders of the defendant dated 07.07.2021, at which it was decided to change the order of profit distribution for 2019, taking into account the revealed error in the amount of distributed profit (the decision on payment of dividends dated 15.12.2020 in the amount of 14 240 757 rubles was cancelled. 96 kopecks, as a result only 11,631,063 rubles were distributed. 15 kopecks), with reference to the fact that the current legislation does not provide for the possibility of cancelling the decision on dividend distribution among shareholders, since after the adoption of the decision by the general meeting of shareholders on payment of dividends the company is considered to have announced the payment of dividends and from that moment the right of the company is transferred to the obligation;

– carrying out legal regulation of corporate relations, the legislator takes into account the constitutional principle of freedom of economic activity, assuming that the general meeting of shareholders has the right to independently make strategic economic decisions. Decision-making on accrual of dividends and their payment to shareholders in proportion to the placed shares is, according to paragraph 1 of article 42 of the Law on JSC, the right and not the obligation of the company. Other interpretation of this article is an interference in private affairs of participants of civil legal relations, which is inadmissible by virtue of paragraph 1 of Article 1 of the Civil Code of the Russian Federation, which establishes the basic principles of civil legislation;

– Analysis of the current rules of law allows the district court to conclude that the rules of the Civil Code and the JSC Law do not contain a ban on changing the position of the general meeting of shareholders on the amount of dividends to be paid to shareholders, in connection with which the general meeting of shareholders has the right to cancel (change) the earlier decision on this issue, thereby changing the amount of dividends of shareholders. Neither the company’s charter nor the law establishes any prohibitions or restrictions on such decisions.

The judicial acts are overturned, and the claims are denied.

Resolution of the Arbitration Court of the WSA of 06.10.22 in case No. A46-11639/2021.