Dismissal of the appeal against the order of a cost advance in a merger dispute

Facts

The appellants, [A.] and [B.] , two shareholders residing in Germany, filed an action for review against X. [Y. AG] and X. [Z. GmbH] before the Civil Court of the Canton of Basel-Stadt on August 12, 2009. They requested the determination of a fair compensation for former shareholders. The instructing judge required a cost advance of CHF 35,000.--, which the appellants did not pay. The Chamber of the Civil Court dismissed the appeal against the cost advance ruling and imposed a court fee of CHF 3,000.-- on the appellants as well as the extraordinary costs. The appellants appealed to the Appellate Court of Basel-Stadt, which dismissed the appeal with costs and compensation to be borne by the appellants.

The appellants requested the Federal Court to overturn the judgment of the Appellate Court and to continue the review procedure under Art. 105 of the MergA without requiring a cost advance from the plaintiffs. They argued that the procedure should be free of charge since they had acquired their shares with knowledge of the intended compensation.

Considerations

The Federal Court first examined whether the appeal was admissible. It found that the lower court had rightly judged the appeal according to the cantonal CPC, as the procedure before the Civil Court was still governed by cantonal law.

The Federal Court dismissed the appeal because the appellants had acquired their shares with knowledge of the intended compensation and thus did not have the situation in mind that the legislature had in mind in Art. 105 para. 3 MergA. The lower court therefore did not violate federal law by not applying Art. 105…