A company shareholder contended that her purchase of over 25% of Class B shares from Goldman Sachs grants her veto rights in accordance with the company's articles of association.
The Court denied the motion and held that the company's articles of association as such do not grant the company a right of veto. A company's articles of association are an agreement between the company and its shareholders, and among themselves. Therefore, the wording of the document has priority regarding its interpretation, and only when the wording is not clear, the parties’ intent when drafting the document and common sense should be reviewed. Here, the wording of the articles of association clearly stipulated that only a shareholder with a connection to at least 25% of the B shares purchased from Hudson and at a certain time, shall be entitled to a right of veto, even though there has never been such purchase. In light of the clear wording, even if there was a technical error in the articles of association that contradicts common sense, the shareholder is not entitled to a right of veto.