Preventing the abuse of the construction of «material transactions» and «transactions of interest»

Abstract

Introduction. The legal concept of «abuse of corporate rights» was developed at the level of law enforcement practice in order to prevent situations where a person goes beyond the proper exercise of his right in order to harm another person.
The problem is that at the level of Ukrainian legislation there is no definition of this concept. On the one hand, the abuse of corporate law harms or poses a potential threat of such harm to other participants in corporate relations, on the other – always contains signs of lawful use of their corporate rights.
The aim of the article is to outline and substantiate on the basis of domestic case law of Ukraine the problem of abuse of the supervisory board and general meeting of corporate rights through the construction of significant transactions and transactions of interest.
Methods. Philosophical (dialectical, hermeneu­tical), general scientific (analysis and synthesis, system-structural, modeling, abstraction, formal, historical) and special methods of cognition used in jurisprudence (methods of interpretation of legal norms, legal-dogmatic, comparative-legal) are used.
Results. The legal mechanisms of abuse of corporate rights by the supervisory board and the general meeting are revealed with the help of constructions of «significant transactions» and «interest-bearing transactions». The algorithm of actions on the correct qualification of actions of the supervisory board or general meeting of shareholders on the subject of abuse of rights by constructing significant transactions or transactions of interest is outlined. The practice of applying the doctrine «venire contra faktum proprium» by the Supreme Court is analyzed.
Conclusions. Specific practical conclusions are provided on the application by the Supreme Court of the doctrine of «venire contra faktum proprium», which is considered a safeguard against abuse of corporate rights. Further development of corporate law is impossible without the formation of clear algorithms for the practical application of the doctrine of the prohibition of conflicting behavior.