Election of a litigation representative to conduct a liability lawsuit

Facts

[A. AG] is a public limited company with four shareholders who are siblings. The two shareholders D.C. and E.C. have the majority of the voting shares, but not the majority of the capital. The majority of the capital is held by the shareholders B.C. (plaintiff) and C.C. (plaintiff).

In December 2001, the general meeting of [A. AG], with a majority of the capital but without a majority of the votes, decided to file a liability lawsuit against the members of the board of directors D.C. and E.C. On April 10, 2003, the extraordinary general meeting, with a majority of the capital, decided to file a liability lawsuit against all members of the board of directors.

Subsequently, the meeting decided on the appointment of a litigation representative or independent representative to conduct the liability lawsuits. The motion to elect attorney [Y.] as a representative was approved by the majority of the capital, but rejected by the majority of the votes. Thereupon, the general meeting with a majority of the votes appointed attorney [Z.] as the litigation representative.

The plaintiffs appealed this decision to the Commercial Court of the Canton of Aargau and requested that the election of attorney [Z.] be revoked and that the election of attorney [Y.] as a representative to conduct the liability lawsuit be established or confirmed.

Considerations

The Federal Supreme Court decided that Art. 693 para. 3 no. 4 CO applies not only to the decision on the filing of a liability lawsuit, but also to the election of the litigation representative. The legislator intended this provision to ensure effective control of the management in the interest of the non-privileged shareholders and to strengthen the position of the registered…