Corporate disputes concerning the allocation of a land plot in kind, the right to which has been transferred as a contribution to the authorized capital of the partnership (including the right to a conditional land share), are carried out in accordance with land legislation
JSC "A" filed a lawsuit to invalidate the decisions of the general meetings of participants of LLP "E" (hereinafter – the partnership, LLP) dated October 4 and 25, 2015, November 14, 2016. The claim is motivated by the fact that the defendants violated the requirements of the current legislation on the procedure for convening and holding general meetings of LLP participants. By the decision of the specialized interdistrict Economic Court of the North Kazakhstan region dated June 14, 2017, the claims of JSC "A" were denied. By the decision of the Judicial Board for Civil Cases of the North Kazakhstan Regional Court dated August 24, 2017, the court's decision remained unchanged. In the petition, the plaintiff asks to cancel the judicial acts and make a new decision on the satisfaction of the claim on the grounds that the courts violated the norms of substantive and procedural law, the conclusions of the court do not correspond to the factual circumstances of the case. The Judicial Board for Civil Cases of the Supreme Court overturned the judicial acts of local courts and issued a new decision in the case to satisfy the claim of JSC "A" for invalidating the decisions of the general meeting of participants of LLP "E": dated October 4, 2015 on holding a repeat extraordinary general meeting; dated October 25, 2015 on permission for participants to withdraw from the the composition of "E" LLP and the allocation of land plots located near the village of Karagash in the Zarechny rural district of the Yesilsky district of the North Kazakhstan region; dated November 14, 2016 on the organization of a farm and joining it with land plots, on the election of N. as head of the farm, on the name of the farm "N." The petition of JSC "A" was granted on the following grounds. It follows from the case file that the contested decisions of the general meetings of the LLP participants dated October 4 and 25, 2015 resolved the issues of withdrawal from the partnership of participants who transferred the right to a conditional land share as a contribution to the authorized capital of the partnership, and the allocation of land to them.
Corporate disputes concerning the allocation of a land plot in kind, the right to which has been transferred as a contribution to the authorized capital of the partnership (including the right to a conditional land share), are carried out in accordance with land legislation
According to paragraph 7 of Article 23 of the Law "On Limited and Additional Liability Partnerships" (hereinafter referred to as the Law), the allocation of a land plot in kind, the right to which has been transferred as a contribution to the authorized capital of the partnership (including the right to a conditional land share), is carried out in accordance with the land legislation of the Republic of Kazakhstan. By virtue of paragraph 3 of Article 101 of the Land Code, citizens who have transferred their rights to conditional land shares as a contribution to the authorized capital of business partnerships, upon leaving the membership (members) for the organization of peasant or farming or commercial agricultural production, have the right, by decision of the general meeting of participants (members), to allot (section) in kind of the share or unit, including the land plot, or to pay the cost of the share or unit. Paragraph 4 of Article 101 of the Land Code stipulates that in the absence of a procedure for using a land plot, an interested participant in shared ownership (shared land use) is required to notify the other participants in shared ownership (shared land use) in writing of their intention to allocate the land plot to account for the land share (land shares), indicating its intended location. The issue of the location of a land plot may be resolved through conciliation procedures or on the basis of a decision of the general meeting of participants in common ownership (common land use) or their representatives. The meeting must take place within one month from the date of notification and is considered valid with the participation of at least 50% of the participants in common ownership (common land use) or their representatives. The decision is made by a simple majority of the votes of the participants in shared ownership (shared land use) or their representatives present at the meeting and is formalized in the minutes. The protocol is signed by all the participants of shared ownership (shared land use) or their representatives present. If no objections are received from the participants of shared ownership (shared land use) within one month from the date of proper notification, the proposal on the location of the land plot is considered agreed.
When convening and holding general meetings on October 4 and 25, 2015, the specified requirements of the law were not complied with. The court of Appeal found that the total number of participants in the LLP – holders of land use rights and conditional land shares is 841, the procedure for using the land plots between them is not defined, respectively, the outgoing participants were required to notify the other participants in writing of their intention to allocate the land plot to account for land shares, indicating its intended location. The general meetings held on October 4 and 25, 2015, were attended by less than 50% of the participants in the general land use, and therefore the decisions taken at them on the withdrawal of participants from the partnership and the allocation of land in kind at the expense of conditional land shares are illegal. Along with the violation of the procedure for holding meetings and making decisions, the procedure for convening a general meeting of the partnership's participants was violated. The general meetings of October 4 and 25, 2015 were convened by the participants of the LLP, who collectively hold less than one tenth of the total number of votes, that is, these meetings were convened by persons who do not have the authority to commit these actions, which, in accordance with paragraph 11 of the regulatory resolution of the Supreme Court of the Republic of Kazakhstan dated July 10, 2008 No. 2 "On certain issues of the application of legislation on limited and additional liability partnerships" is the basis for recognizing the decisions taken at them as invalid. Having correctly established these violations, the court of appeal concluded that they did not lead to an illegal decision in the case due to the plaintiff's omission of the statute of limitations. In accordance with article 50 of the Law, a partnership participant may challenge a decision of the general meeting of LLP participants taken in violation of the procedure for holding a general meeting and making decisions, as well as a decision of the general meeting that contradicts the law or the charter of the partnership, including a decision that violates the rights of a partnership participant. Such an application may be submitted within six months from the date when the participant of the partnership learned or should have learned about the decision, and if he participated in the general meeting that adopted the decision, then within six months from the date of the adoption of this decision by the general meeting. Applying the statute of limitations, the local courts noted that information about the upcoming general meetings had been published in the newspaper North Kazakhstan on September 15 and October 10, 2015, so the plaintiff knew or should have known about their holding. The plaintiff should have known about the general meetings from newspaper publications, but there is no evidence in the case that he knew or should have known about the decision. The plaintiff provided evidence that he became aware of the decisions taken at the general meetings in January 2017 upon receiving information about the land re-registration, after which JSC "A" wrote to the Akimat of the Yessil district of the North Kazakhstan region, to which he was advised to contact N. With this in mind, the board believes that the plaintiff has not missed the six-month deadline for challenging the decision of the general meeting of LLP participants. Due to the illegality of the decisions of the general meetings of the LLP dated October 4 and 25, 2015, the decision of the general meeting of the defendants – former members of the partnership dated November 14, 2016 on the organization of their independent farming on lands illegally withdrawn from the authorized capital of the LLP is also illegal.
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