Facts

Parties and instances: [B. AG] , based in [U.] (respondent), is a stock corporation. The shareholders are [A.] (appellant) with 48.33 % and [C.] with 51.67 %.

Course of proceedings:

  • On 28 May 2019, the appellant filed a application in summary proceedings with the Cantonal Court of Zug and essentially requested the appointment of a receiver due to organisational defects (Art. 731b CO).
  • By decision of 21 January 2020, the single judge at the Cantonal Court dismissed the application. He appointed [C.] as a member of the board of directors with sole signing authority and confirmed [D. AG] as the statutory auditor, in each case for a minimum term of one year.
  • The Higher Court of the Canton of Zug, II Civil Division, dismissed the appeal by judgment of 10 June 2020 (Z2 2020 6).
  • The appellant lodged a civil law appeal with the Federal Supreme Court and requested the appointment of a receiver and the granting of suspensive effect. By presidential order of 18 August 2020, suspensive effect was not granted. No responses were obtained.

Subject matter in dispute: Organisational defect under Art. 731b CO; appointment of a receiver versus confirmation of the existing bodies by the court.

Findings of the lower instances: Organisational defects existed, as the company lacked both validly elected board members and a validly elected statutory auditor. Instead of a receiver, the appointment of [C.] and the confirmation of [D. AG] was justified.

Complaints of the appellant: (a) [C.] is in a conflict of interest and not independent due to pending criminal proceedings (forgery of documents, breach of trust and/or misappropriation), in which the company acts as the injured party; (b) the statutory auditor is not independent, as it knowingly produced false documents (Art. 251 SCC).

Considerations

Standard of review: The Federal Supreme Court reviews only violations of law (Art. 95 and 96 FSCA) and is bound by the findings of fact (Art. 105 para. 1 FSCA), unless these are manifestly incorrect, i.e. arbitrary (Art. 105 para. 2 FSCA). The appeal must substantively address the reasoning of the lower court (Art. 42 para. 2 FSCA). New facts and evidence are admissible only insofar as the decision of the lower court gives rise to them (Art. 99 para. 1 FSCA).

Discretion in cases of organisational defects: The measures listed in Art. 731b para. 1bis CO are not exhaustive. Like in an action for dissolution (Art. 736 no. 4 CO), the judge has considerable scope for action. The Federal Supreme Court intervenes only with restraint in discretionary decisions, in particular where recognised principles are violated without reason, impermissible facts are taken into account, circumstances that must be considered are disregarded, or the decision is manifestly unfair or grossly unjust.

Conflict of interest of [C.] : A conflict of interest can lead to an organisational defect only under exceptional circumstances, namely where all board members pursue conflicting interests and the interests of the company can no longer be represented independently. The appellant did not precisely set out what role the company plays in the criminal proceedings and why [C.] as the sole board member should be unable to function. The mere assertion of an 'irresolvable conflict of interest' is insufficient. Whether the criminal proceedings were actually opened is therefore immaterial. Moreover, the appellant did not engage with the lower court's arguments in favour of [C.] , such as his many years of experience, knowledge of the contractual partners and immediate capacity to act.

Independence of the statutory auditor: The appellant did not show that the discretionary decision of the lower court was…