Page 114 - Albanian law on entrepreuners and companies - text with with commentary

the court within 30 days after the refusal to provide for the nomination. If the General
Meeting fails to render a decision within 60 days from the date of the request, this is
considered a refusal.
(3) If the General Meeting has nominated a special auditor, members or creditors
referred to in paragraph 2 may request the court to replace that auditor on the grounds
that there are sufficient reasons to believe that the auditor nominated by the General
Meeting may interfere with a proper execution of the special investigation.
(4) If the court confirms the requests of paragraphs 2 and 3, the company will bear
the costs of the nomination and the remuneration of the special auditor.
(5) The right to request the special investigation as of paragraphs 1 and 2 must be
exercised within three years from the date of registration of the company as regards
irregularities of the formation process, and within three years from the date of the
alleged irregularity in the conduct of ongoing business.
(6) A request as of paragraph 2 made by creditor in bad faith shall make him
liable in accordance with Article 34 of the Code of Civil Procedures.

Comments:

1. Articles 91 to 94 provide for important minority rights. In addition to Article 10, which
allows for the ‘derivative action’ of a 5% minority of votes and of creditors for claims
resulting from the foundation phase, these provisions enact a typical ‘derivative’ lawsuit. This
means that the company sues for breaches of duties against shareholders or management. The
special innovative system in Albania combines the rights of minorities and creditors. The
damaging problem in many companies is the amount of power which the majority
shareholders have. In this section of the Law these provisions provide a check and balance
system for the company. The lawsuit is called a ‘derivative’ suit because the damage occurred
by the breaches can be compensated by the company. The plaintiff in the suit is the company.
However this is complicated because the powerful people may be implicated with the
breaches of duty and, inevitably they will not allow the company to sue them. Articles 91-94
enact a way to balance the stakeholders’ rights. The minority or the creditors may request the
court to order a special investigation (Article 91), annulment of illegal decisions of the
Managing Director (Article 92) or compensation of damages in favour of the company
(Article 92 (6)), if the competent company organs do not become active in this respect. Article
93 is a different sort of right because it is not a derivative suit rather it is a personal right. The
member can sue in his own right against the company or management. It might be that a
member was stopped from voting or not allowed to attend a General Meeting. These are
personal rights for the member under the Statute. Therefore in the event of a member being
prevented from exercising the rights attached to his shares he may request the court to
enforce these rights or grant compensation, Articles 93. The Statute or the General Meeting
may not interfere with these rights in any form, Article 94.

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