Our Law Office wins a case before the Supreme CourtMarch 5, 2015
In the case in which a team of lawyers of our Law Office represented a joint stock company the Supreme Court overruled a decision adverse to our Client, passed by a regional court. The Supreme Court confirmed the validity of the objections raised by us concerning the violation of a number of regulations by the regional court. At least one of them refers to the issue that may have a potentially wide applicability and is important to companies acquiring a real property or a perpetual usufruct right by contribution in kind.
The Supreme Court supported the view raised by us in the cassation appeal that the acquisition by a joint stock company of a contribution in kind (non-cash contribution) from a shareholder in the form of perpetual usufruct right (transferred to the company in order to pay up the shares taken up by the shareholder) was the acquisition against consideration. Consequently, the fact of finding that the transaction is made against consideration means that the company acquiring the contribution in kind (acting in the so-called good faith) may invoke the principle of public credibility of land and mortgage registers. This principle protects the company as an acquirer of the right acquired from any person entered in the land and mortgage register; the company effectively acquires the right though the disposing entity entered in the register in fact has no power to dispose of it (e.g. is neither an owner of the real property or a holder of the perpetual usufruct).
The position expressed in this decision is therefore favourable to all limited liability companies and joint stock companies, acquiring in good faith by way of contribution in kind (non-cash contribution) any rights entered in land and mortgage registers from any person entered therein. Such acquisition, both in our opinion and according to the decision of the Supreme Court, is subject to protection if it appears that the shareholder (partner) in fact has not been entitled to dispose of the right. We believe that this view is also correct in the case of contributions made to partnerships.