(Judgment of the Supreme Court of 28 January 2026, Case No. 27 Cdo 1782/2025)
The claimant, a shareholder of a joint-stock company, brought an action seeking an order requiring the company to provide him with an explanation regarding matters discussed at the company’s general meeting held on 31 May 2019, or at the substitute general meeting held on 11 July 2019. These primarily concerned questions relating to the company’s business activities and the state of its assets.
At the first general meeting, the company’s board of directors did not provide the shareholder with the requested explanation and subsequently, in its statement of 8 July 2019, refused to provide it, referring to the protection of business relationships, the preservation of the company’s competitiveness, and other obligations towards the company’s customers and suppliers. At the substitute general meeting, the shareholder exercised the right to an explanation again. The board of directors and the chairman of the supervisory board, in the presence of the other members of the supervisory board, refused to provide the explanation. At the same time, the chairman of the supervisory board spoke at the general meeting in a manner from which, according to the Supreme Court, it followed that he supported the position of the board of directors and presented that position as the position of the supervisory board.
The court of first instance, the Regional Court in Hradec Králové, upheld the action. It concluded that the requested explanations were necessary for assessing the matters discussed at the general meeting. At the same time, it found no grounds for refusing to provide the explanation under Section 359 of the Business Corporations Act, nor did it find that the shareholder had exercised his right abusively.
The High Court in Prague, as the appellate court, however, changed the decision and dismissed the action. It concluded that the claimant could not exercise the right to an explanation through the courts because it had not been proven that the supervisory board, as a collective body, had actually reviewed the reasons for which the board of directors had refused to provide the explanation. According to the appellate court, the condition of prior review by the supervisory board under Section 360(2) and (3) of the Business Corporations Act had therefore not been met. In respect of one of the questions, the appellate court also dismissed the action on the grounds that this question had not been duly raised at the general meeting. This decision of the appellate court was already its second decision in the case; in its first decision, it concluded that the action had been filed late, which the Supreme Court disputed and quashed the first decision of the appellate court, returning the case to the appellate court for further proceedings. However, these decisions are not relevant to the key conclusions of the Supreme Court’s second decision in this case, and we therefore do not address them in more detail.
The Supreme Court partially rejected the shareholder’s appeal on points of law, specifically in relation to the question which, according to the appellate court, had not been raised at the general meeting and where the appellant did not challenge this separate ground for dismissal in his appeal on points of law. In the remaining scope, however, it admitted the appeal, because it concerned a question that had not yet been resolved, namely whether the condition of review of the refusal to provide an explanation by the supervisory board can be considered fulfilled where the chairman of the supervisory board agrees at the general meeting with the decision of the board of directors not to provide the explanation and presents this as the position of the supervisory board.
The Supreme Court proceeded on the assumption that the purpose of the requirement of prior review by the supervisory board is for the shareholder to exhaust internal means of protection within the company before bringing an action. This requirement is connected with the principle of minimising judicial interference in the internal affairs of business corporations, the same principle that the Supreme Court also mentioned in its resolution of 12 February 2026, Case No. 27 Cdo 3205/2024, which we describe above. However, the purpose of the legislation is not to impose formalistic or disproportionate evidentiary requirements on the shareholder concerning the supervisory board’s internal decision-making. According to the Supreme Court, if the supervisory board, or its chairman, clearly indicates to the shareholder that it does not agree with providing the explanation, the meaning and purpose of the requirement of review by the supervisory board is fulfilled. If the supervisory board, on its own initiative, expresses its agreement at the general meeting with the refusal to provide the explanation, there is no reasonable reason to require the shareholder subsequently to formally request the supervisory board again to determine that the conditions for refusing to provide the explanation were not met.
The core of the decision is therefore the conclusion that any formal defect in the supervisory board’s decision-making, or even the fact that the supervisory board as a collective body did not in fact make any decision at all, cannot be held against the shareholder if the chairman of the supervisory board, at the general meeting and in the presence of the other members, expressly supported the refusal to provide the explanation and described his position as the position of the supervisory board. In such a situation, the shareholder is not obliged to verify the supervisory board’s internal decision-making process or to initiate its formal decision-making again.
The Supreme Court therefore concluded that the legal opinion of the appellate court, according to which the claimant could not bring the action due to the absence of a formal decision by the supervisory board as a whole, could not stand. It therefore quashed the judgment of the appellate court in the remaining scope and remitted the case to it for further proceedings.
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