A corporation held shares in a company, which articles of association and shareholders agreement set a right of first refusal to the shareholders in case of sale of shares in the company. One of the two shareholders of the corporation sought to pledge its holdings in the corporation. A shareholder in the company contended that this should be deemed a transfer of shares in the company - that subject it to right of first refusal.
The Court rejected the claim and held that a pledge may be deemed a transfer of shares, but it is necessary to distinguish between a case where the corporation is the party to the shareholders agreement of the company and not the shareholders of the corporation, and the situation in which there is a shareholders agreement in the company, where one of the signatory shareholders holds its shares through a holding corporation and then the transfer of shares or allotment of shares in that corporation may be deed a transfer of shares in the company. In addition, even if the Court thinks retrospectively that a certain arrangement is preferable, it must respect the autonomy of the parties and their right to determine the framework relating to the business-contractual conduct between them. Therefore, the shareholders agreement must be construed in accordance with its language, especially when it is a business-economic agreement between sophisticated shareholders who were represented by lawyers.