Judicial Supplementation of the Supervisory Board in Special Urgent Cases: Legal Framework and Current Developments
The Higher Regional Court of Frankfurt am Main issued an important clarification on January 17, 2022 (Ref.: 20 W 52/20 and 20 W 9/22) regarding the requirements for the judicial appointment of supervisory board members in pressing corporate law matters. The background to the decision was a takeover offer that required the supervisory board to be able to act promptly. The following statements address the key aspects of the decision and place them within the overall context of stock corporation law.
The Corporate Law Requirement for Supervisory Board Composition
The supervisory board, as a central body of a stock corporation, is strictly regulated in terms of its composition under Section 95(1) AktG. The company’s articles of association specify the precise number of members. If a member resigns or for other reasons a vacancy occurs, Section 104(1) AktG governs the possibility of a judicial appointment. According to the wording of the law, such a judicial supplement is “to be made upon motion by a party involved, if a proper appointment cannot promptly be made in any other way.”
The law usually provides a period of three months during which the company itself can arrange for the replacement. Only after this period has expired is a court appointment generally indicated.
Supervisory Board Appointments in Exceptional Urgent Cases
The Higher Regional Court of Frankfurt am Main has now emphasized that, in exceptional situations, the general three-month period must give way to the need for the supervisory body to act promptly. In the case under consideration, a takeover offer had been received that required a speedy and complete consultation and decision by the supervisory board as stipulated by the articles of association.
Urgency as the Decisive Factor
The situation was characterized by particular time pressure; the absence of the required number of supervisory board members would have resulted in significant disadvantages for the company. In such cases, it is incompatible with the statutory duties of the supervisory board to accept a vacancy lasting several months.
Thus, what mattered for the decision was not just the expiry of the three-month period, but rather the concrete necessity of a full appointment for reasons of functionality and compliance with statutory as well as articles of association duties. The court clarified that judicial appointment may already take place in advance if otherwise the timely fulfillment of the supervisory board’s duties would be objectively endangered.
Corporate Interests and Legal Safeguarding
The significance of this decision lies especially in the preventive protection of company interests. Prompt replacement, especially in cases of fundamental structural measures (such as classic takeover offers, restructurings, or decisions regarding matters of material significance), can be essential for the supervisory board’s ability to act.
Practical Relevance
Corporate management and shareholders must be aware that, in key decision-making phases, the effective composition of the supervisory board is not just a matter of organizational structuring, but also of risk management. The law and case law are concerned here with preventing blockages or delays that could negatively impact the company.
Procedural Guidance and Ongoing Developments
It should be noted that the decision of the Higher Regional Court of Frankfurt was based on specific individual proceedings and its significance for other cases must be carefully considered. The urgency of judicial appointment must always be assessed based on the particular circumstances. Especially potentially affected companies should review early whether special urgent situations exist that may justify a deviation from the ordinary time limits.
The composition and capacity to act of supervisory boards thus remains a key topic in the corporate governance discussion. The principles mentioned are in the context of numerous other court decisions and legislative adjustments, the development of which should be closely monitored.
Outlook
Against the background of this current decision, it is advisable to always carefully examine the requirements for the proper composition of the supervisory board and to keep abreast of developments in case law and legislation. Companies, investors, and shareholders who are confronted with questions of corporate body composition in complex transaction situations or structural measures can turn to qualified corporate law advice if needed. The Rechtsanwälte of MTR Legal offer comprehensive support in evaluating and assessing available options in such cases.(Quelle: OLG Frankfurt, Beschluss vom 17.01.2022, Az.: 20 W 52/20, 20 W 9/22)
