Facts

Parties and prior instances: [A. SA] , with registered office in Zug (defendant, appellant), has held 32,715 % of the shares of [B.] SpA in Milan since 1962. The respondents are the community of heirs of [B.B.] (deceased 2016), consisting of the grandchildren [C.C.] and [D.C.] (plaintiffs, respondents). The prior instances were the Cantonal Court of Zug (decision of 1 February 2018) and the Higher Court of the Canton of Zug, I Civil Division (judgment of 17 May 2019, Z1 2018 6).

Company and shareholding structure: [A. SA] was founded on 30 November 1962 by the founder [E.B.] (deceased 2003). He was the sole shareholder; the formal member of the board of directors was initially [J.J.] , and from 1999 his son [K.J.] served as the sole member of the board of directors. In 1999, [F.B.] acquired all of the shares.

Share transfer in 1962: On 7 December 1962, [A. SA] acquired 1,355 of the total 3,000 registered shares of [B.] SpA from [H.B.] (deceased 1972), [E.B.] , [I.B.] (deceased 2006) and [B.B.] (deceased 2016), as well as from [L.L.] and [M.L.] . The transfer was effected by adjusting the share register, was 'organised' by [E.B.] and was carried out for tax reasons.

Subject matter of the dispute: On 14 November 2012, [B.B.] (deceased 2016) brought an action before the Cantonal Court of Zug for the surrender of 60% of the shares held by the defendant (at least 785,158 of 1,308,597 shares), alternatively for payment of EUR 6,477,570.-- plus interest. She argued that the defendant held the shares only fiduciarily for the siblings [B.] , who considered themselves entitled in the proportions 40%/40%/20%; [B.B.] had inherited [I.B.] 's share after his death in 2006. After the death of [B.B.] , the grandchildren entered the proceedings as heirs.

First-instance decision: The Cantonal Court ordered the defendant to surrender 785,158 shares and to cooperate in the transfer (operative paragraphs 1.1 and 1.2), threatened referral to the criminal court for disobedience of official orders pursuant to Art. 292 SCC in the event of non-compliance (operative paragraph 2), and dismissed the proceedings against [K.J.] and [F.B.] as moot (operative paragraph 3).

Judgment of the Higher Court: The Higher Court dismissed the appeal. It characterised the parties' conduct as a fiduciary transfer of ownership and the defendant as trustee on the basis of a trust agreement which [E.B.] , as sole shareholder, concluded on its behalf. The 40/40/20 allocation was confirmed.

Appeal to the Federal Supreme Court: The defendant requested that the Higher Court's judgment be set aside and the action dismissed, alternatively that the matter be remitted. It essentially complained that the lower court had wrongly attributed [E.B.] 's conduct to him as a 'de facto organ'. The respondents requested dismissal of the appeal. By order of 7 October 2019, suspensive effect was granted to the appeal.

Considerations

Admissibility and scope of review: The Federal Supreme Court examined ex officio and with full cognition the admissibility of the civil appeal against the final decision (Art. 29 para. 1 FSCA). The admissibility requirements were met, subject to a sufficient statement of grounds (Art. 42 paras. 2 and 106 para. 2 FSCA). The court applies the law ex officio (Art. 106 para. 1 FSCA), but in principle only considers the complaints raised.

Binding nature of the facts and the complaint principle: The Federal Supreme Court bases its decision on the facts established by the lower court (Art. 105 para. 1 FSCA) and corrects them only if they are manifestly incorrect (arbitrary) or violate the law (Art. 105 para. 2 FSCA). The appellant impermissibly supplemented the facts with its own submissions and took findings out of context. Whether an agreement exists between the appellant and the siblings, and what its content is, is a question of fact. The lower court determined the content of the contract based on the 40/40/20 agreement, a handwritten letter from [E.B.] and an overall assessment of the indications, without falling into arbitrariness.

No attribution as a de facto organ, but agency: The appellant correctly argued that the legal concept of a 'de facto organ' is not recognised for legal transactions of a joint-stock company. However, it overlooks that a joint-stock company may be represented in legal transactions under the general rules of agency (Art. 32 ff. CO), and must allow apparent authority and acquiescence-based authority to be raised against it. Insofar as the lower court, in accordance with federal law, assumed a trust agreement concluded between the appellant and the siblings under the rules of agency, the complaint lacked foundation.

Interpretation of the mandate agreement: The mandate agreement of 10 June 1999 between the sole shareholder [F.B.] and the sole member of the board of directors [K.J.] (previously [E.B.] and [J.J.] ) not only permitted the principal to act on behalf of the appellant, but expressly provided for it in clause 6. Pursuant to clause 2, the board of directors was limited to formal administration, and under clause 3 it acted on instructions and in the interest of the principal. Relying…