Italy Update: Joint-stock company: cancellation of the contract stipulated in conflict of interest

“Art. 1394 c.c. represents the legal basis of the action for annulment of a contract stipulated in conflict of interest where the conflict of interest manifests itself at the time of the exercise of the representative power (eg in the absence of deliberation), the proof of the conflict is achievable by means of simple presumptions […].”

Preliminarily, the Supreme Court clarified that, the annulment of the contract pursuant to art. 1394 of the Italian Civil Code.c., stipulated by a capital company as a consequence of the conflict of interest, can be requested only if the conflict has manifested itself at the time of the exercise of representative power; if, on the other hand, the conflict occurred at the time of the exercise of the deliberative power (at the shareholders’ meeting or board of directors) The articles. 2373 and 2391 c.c.

Finally, with regard to the proof of conflict of interest, the courts of legality have admitted the use of simple presumptions in the event that the conflict is in practice capable of causing prejudice to the represented: in fact, any rights of bona fide third parties must also be safeguarded.

By Quorum, Italy, a Transatlantic Law International Affiliated Firm. 

For further information or for any assistance please contact italy@transatlanticlaw.com

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