Professors Zetzsche and Sinnig deliver a seminar on “Oppression Remedy and Abuse of Rights from a Comparative Perspective”

In an enthralling seminar, Prof. Dr. Dirk A. Zetzsche and Assist. Prof. Dr. Julia Sinnig, both from University of Luxembourg, delivered two academic presentations under the joint title “Oppression Remedy and Abuse of Rights from a Comparative Perspective”. The event was hosted by EW Barker Centre for Law & Business, NUS Law, and moderated by Prof. Hans Tjio.

The two presentations scrutinised how different legal systems regulate abuse by majority shareholders. Prof. Zetzsche emphasised five key legal tools—fiduciary duties, oppression and unfair prejudice claims, abuse of rights doctrines, tort law, and derivative suits—used as devices to protect minorities from unfair practices such as asset expropriation or controlling-holders’ manipulation of general meetings.

Prof. Zetzsche highlighted inherent “fuzziness” in legal standards. He argued this to be a necessary condition for effective ethical governance as opposed to being a legislative weakness. The avoidance of rigid definitions enables courts to make ex post value-based judgments to accommodate corporate intricacies and capriciousness. The advantage of fuzziness is twofold – it precludes unethical behaviour and informs potential control abusers of the precincts of acceptable behaviour that are context-dependent and subject to judicial inquiry. At the same time, Prof. Zetzsche argued that some principles guide the courts across all jurisdictions when dealing with control-holders’ conduct; these “meta principles” could be understood as transnational law shaping the ethical boundaries of corporate control.

Prof. Zetzsche concluded that despite formal differences, corporate laws in mature jurisdictions effectively constrain majority control. He stressed that judges interpret broad legal terms in ways reflecting a given society’s underlying ethical values. These ethical values shaped by economic realities better explain varying legal outcomes across countries than differences in legal particularities and procedures. sAs identifying these societal ethics is challenging, he called for interdisciplinary approaches to enrich comparative law beyond traditional doctrinal analysis.

Prof. Sinnig provided a comparative analysis of Luxembourg, Belgian, and French legal regimes. She highlighted the method of codification of doctrines such as abuse of rights in civil law jurisdictions, which allow courts to annul majority decisions taken in bad faith or in conflict with interests of the company. She also discussed directors’ civil and criminal liability and the sprouting function of good faith and loyalty in corporate contracts.

Moreover, Prof. Sinnig stressed on central jurisdictional differences in how group control and shareholder rights are managed. For example, judicial doctrines such as Rozenblum are relied on in France to accommodate group interests, whereas Germany has embraced a formal group law approach allowing for intra-group disadvantages conditioned on offering compensation. Inspired by Belgian law, Luxembourg has codified abuse in corporate voting settings in the form of specific provisions such as art. 100-22 of Luxembourg Corporate Law. Luxembourg’s approach therefore provides for both a very granular provision applicable in the AGM context as well as a general, codified principle of abuse of rights. The French model, in turn, only relies on a jurisprudential principle of abuse of rights, which may offer more flexibility to judges when applying such principle in majority shareholder contexts. In any event, all jurisdictions reflect a transnational ethical principle – the exercise of corporate control within limits in a bid to protect the rights of minority shareholders.

The event concluded with an engaging Q&A session, which involved further stimulating discussions on the rationale for corporate law allowing for a gap filling role even though contract law does not, the Rozenblum doctrine, the German written group laws, separate legal entity, and veil piercing among others.

Professor Dirk A. Zetzsche presenting

Assistant Professor Julia Sinnig delivering her presentation

Professor Tjio Hans facilitating an interactive Q&A session