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Cobalt Successful for Poohtech before Supreme Court on Approval of Annual Reports

Cobalt Successful for Poohtech before Supreme Court on Approval of Annual Reports

Estonia
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Cobalt has successfully represented AS Poohtech and Activity OU in a litigation before the Supreme Court.

The Supreme Court decided in favor of Poohtech and Activity, ruling that a shareholder was not entitled to block the approval of the annual report of a company solely to force the compulsory dissolution of the company. The Court held that voting against an annual report without good reason constitutes bad faith and is therefore impermissible.

Estonia's Supreme Court took the view that although Estonian law lacks mechanisms for the exit of minority shareholders, this does not mean that those absent mechanisms could be replaced by creating an artificial situation demanding the compulsory dissolution of a company.

According to Cobalt, the judgment is an important precedent, "which explains that there are situations where a shareholder is obliged to vote in a certain way in accordance with the principle of good faith, where a court can replace the shareholder’s declaration of intention by a court judgment, and how this obligation of voting can be applied also to the cases where an annual report is being approved."

Cobalt’s Managing Partner Jaanus Mody and Senior Associates Kristina Schotter and Kalev Saare represented Poohtech and Activity before the court.

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