Court of Appeal annuls ruling declaring general assembly invalid: Failure to follow invitation procedures does not invalidate the meeting unless it affects quorum or voting

The Court of Appeal, in its Ninth Commercial Civil Chamber, presided over by Advisor Salem Marwa Al-Huda, annulled the first-instance judgment that had declared the convening of the ordinary general assembly of a certain company invalid, and again dismissed the lawsuit, ordering the plaintiff to bear the costs and a sum of 200 Kuwaiti dinars as actual legal fees for both levels of jurisdiction.

The dispute’s facts center on a lawsuit filed by one of the partners seeking the nullification of the procedures for convening the ordinary general assembly and the decisions resulting therefrom, based on the claim that she received the notice on the day of the assembly, contrary to the legally prescribed deadline, which prevented her from attending and expressing her opinion on the agenda items.

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The first-instance court had previously ruled that the convening of the assembly and its resulting effects were invalid. However, the company appealed the judgment before the Court of Appeal through lawyer Ali Matar Al-Wawani, who argued that the Companies Law does not impose nullity merely for violating convening procedures or deadlines, provided that the legal quorum for convening was met and the voting outcome was not affected.

Al-Wawani clarified in his submissions that the plaintiff holds 20% of the capital, while the partners owning 80% of the shares attended the meeting and unanimously voted in favor of the decisions, rendering the plaintiff’s presence or absence irrelevant to the completion of the quorum or the voting result.

The Court of Appeal accepted this defense, emphasizing in its reasoning that nullity rulings are only issued when explicitly provided by law, and that the legislator did not stipulate the nullification of the ordinary general assembly of limited liability companies due to violations of convening procedures or deadlines, unless such violations had a tangible impact on the legal quorum or voting results.

The court concluded that the completion of the legal quorum and the approval of all decisions by the attending partners rendered the assembly’s convening valid, necessitating the annulment of the appealed judgment and the dismissal of the lawsuit.