Action For Nullity For Abuse Of Majority: Clarification From The French Supreme Court

In a ruling dated July 9, 2025 (No. 23-23.484), the Commercial Chamber of the French Cour de Cassation provided a welcome clarification: the validity of an action for annulment of a corporate resolution on the grounds of abuse of majority is not subject to the simultaneous filing of a claim for damages against the majority shareholders. The French Supreme Court thus confirmed the autonomy of these two mechanisms.

In the case at hand, minority shareholders sought the annulment of several general meeting resolutions on the grounds that they served only the interests of the majority shareholders to the detriment of the company's interest. No damages claim had been filed against the majority shareholders. The Court of Appeal of Aix-en-Provence (CA d'Aix-en-Provence, October 12, 2023, No. 23/01973), ruled that the claim for abuse of majority necessarily implied a damages claim against the majority shareholders — since the alleged abuse resulted from the exercise of their voting rights — and therefore declared for the annulment action inadmissible.

The Cour de Cassation overturned the Court of Appeal's ruling.

Stating that abuse of majority power is characterized when the disputed decision is contrary to the company's interests and is approved with the sole purpose of favoring the majority shareholders to the detriment of the minority shareholders, the Cour de Cassation emphasized that the main objective of the action for abuse of majority remains the protection of the company's interests. This protection is achieved by annulling the contested resolution, thereby putting an end to the disruption suffered by the company. Such annulment also serves as the first form of compensation for the damage suffered by the minority shareholders. Therefore, the validity of an annulment action of a corporate resolution on the grounds of abuse of majority is not conditional upon initiating a claim for damages against the majority shareholders.

By confirming that the two claims are not interdependent, the Cour de Cassation facilitates the sanction of majority abuse by exempting claimants from the burden of proving the tortious liability of majority shareholders (i.e., the existence of a breach by the majority shareholder, the existence and quantification of damage, and the existence of a causal link between the breach and the damage).

The minority shareholders remain fully entitled to claim for indemnification of a personal loss but such a claim constitutes a separate, rather than central, aspect of the repression of abuse of majority. However, if both actions (nullity and damages) are initiated simultaneously, it is difficult to see how one could succeed without the other, given the constituent elements of majority abuse.

Therefore, before any proceedings are initiated, it is recommended to assess the chances of success of a claim for damages against the majority shareholders or, alternatively, to await the outcome of the annulment action against the company before initiating a damages claim against its majority shareholders, thus taking advantage of the longer limitation period applicable to the latter action.

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