A shareholder lawsuit under Section 157 of the Business Corporations Act (hereinafter the “ZOK”) is one of the tools for protecting a company against inaction or abuse of power by its statutory body.[1] It entitles a shareholder to file a lawsuit on behalf of the company seeking compensation for damages or, as the case may be, the fulfillment of the managing director’s obligations arising from an agreement under Section 53(3) of the ZOK against the managing director, and to represent the company in such proceedings. Filing a shareholder lawsuit entails, among other things, the obligation to pay a court fee.
In practice, a situation may arise where a shareholder files a shareholder lawsuit on behalf of the company, but the party liable for the court fee remains the company itself, not the shareholder representing it in the proceedings. The company’s fulfillment of its fee obligation, however, generally depends on the persons authorized to dispose of its assets, namely, its managing directors, against whom the shareholder lawsuit is directed.
Such a situation raises several issues, not only procedural ones. Both the managing director and the shareholder have obligations toward the company arising from the performance of their functions or from their membership in the corporation, the specific nature of which may not always be clear in the context of a shareholder lawsuit. One of these issues is the definition of a shareholder’s liability for the course of proceedings initiated by him or her and whether a shareholder can be required to use his or her own funds to ensure the company’s fulfillment of its fee obligations. The Supreme Court addressed these issues in its judgment dated May 27, 2026, Case No. 27 Cdo 3613/2024 (hereinafter the “Decision”), in which it built upon its previous case law[2] and reaffirmed its earlier conclusions, now in the context of a shareholder’s duty of corporate loyalty and general duty of care.
Factual and Procedural Circumstances of the Case
The defendant, as a shareholder of the plaintiff (a limited liability company), filed a lawsuit on behalf of the plaintiff pursuant to Section 157 of the ZOK seeking damages against its former managing directors. The defendant forwarded the court’s request for payment of the court fee to the plaintiff, or rather to one of the defendant’s managing directors. However, the company failed to pay the court fee. The court subsequently stayed the proceedings due to non-payment of the court fee and ordered the company to reimburse the defendant managing directors for their litigation costs, amounting to over half a million crowns. In the original proceedings, however, the court continued even after the court fee remained unpaid and had taken further procedural steps, which the defendant partner later challenged in connection with the issue of causation between the court’s actions and the incurrence of the litigation costs.
The company subsequently sought reimbursement of these costs from the defendant as damages resulting from a breach of her duties. The court of first instance granted the claim, reasoning that the partner had violated her statutory obligation to pay the court fee. The appellate court upheld the Decision on the merits, but on a different legal basis. According to its conclusion, the partner breached the duty of loyalty under Section 212(1) of the Civil Code (hereinafter the “CC”), and the general duty of care under Section 2900 of the CC.
Based on the defendant partner’s appeal, the Supreme Court set aside the judgments of both courts and remanded the case to the court of first instance for further proceedings.
A Shareholder’s Duty of Loyalty
A shareholder’s duty of loyalty arises primarily from Section 212(1) of the CC, pursuant to which a member of a corporation, upon accepting membership, undertakes to act honorably toward the corporation and to observe its internal rules. A shareholder is thus generally obligated to respect the legitimate interests of the corporation and not to abuse their membership rights to the corporation’s detriment.
However, it is necessary to distinguish a shareholder’s duty of loyalty from the duties of a member of a company’s elected body. An executive officer is directly entrusted with the administration of the company and its business management and, in the performance of their duties, is obligated to act with the care of a prudent manager. Their duties thus include actively safeguarding the company’s interests.
A shareholder, on the other hand, does not manage the company by virtue of membership alone, nor does he or she supplement or directly replace the activities of the company’s governing bodies. A shareholder’s duty of loyalty therefore cannot automatically be construed as a source of new property obligations not provided for by law or the articles of association. In this context, the Supreme Court noted that the duty of loyalty constitutes the fundamental basis for a shareholder’s obligations and, at the same time, a rule of interpretation through which the shareholder’s individual obligations toward the company must be interpreted.
However, the principle of loyalty alone cannot be used to infer an obligation on the part of a partner to transfer to the company, from his or her own assets, a specific item, right, or other asset – even if it were necessary for the company’s business operations—in the context of the Decision, that is, to pay the court fee for a partner’s lawsuit out of his or her own funds. In such a case, the party liable for payment is the company, not the shareholder representing it in the proceedings. If a shareholder pays the court fee for the company out of his or her own funds, he or she is discharging a debt owed by another, and the company generally benefits from unjust enrichment, the return of which the shareholder may demand.
Abuse of the Right to File a Shareholder Lawsuit
By its very nature, the institution of a shareholder lawsuit is susceptible to abuse. This is because the outcome of the proceedings generally affects the shareholder’s financial interests only indirectly through a change in the value of his or her share, while the company itself bears the bulk of the economic consequences of the dispute.
Therefore, a situation in which a shareholder abuses their right to file a shareholder lawsuit may conflict with the duty of corporate loyalty. The decisive factor in assessing their conduct is whether they filed the lawsuit to protect the rights and legitimate interests of the company, or whether they used it to pursue their own illegitimate or disproportionate objectives.
Only if the court concludes that the shareholder pursued illegitimate or disproportionate objectives by filing the lawsuit—and thus abusing his right – can such conduct constitutes a breach of the shareholder’s duty of loyalty. In such a case, the company itself may also seek compensation from the shareholder for damages incurred as a result of this breach.
General Duty of Care under Section 2900 of the CC and Causing Damage by Omission
The appellate court also based the defendant shareholder’s liability on a breach of the general duty of care under Section 2900 of the CC; however, according to the Supreme Court, this conclusion is also incorrect. Under Section 2900 of the CC, everyone must, if required by the circumstances of the case or the customs of private life, conduct themselves in such a way as to prevent unjustified harm to the liberty, life, health, or property of another. The general duty of care under Section 2900 of the CC applies only to active conduct; it does not apply to cases where damage is caused by omission, i.e., by a person’s failure to act. Liability for omission may, under certain conditions, arise primarily from the special duty to intervene under Section 2901 of the CC.
At the same time, the Supreme Court highlighted the subsidiary nature of the general duty of care. If the appellate court simultaneously found a breach of the duty of loyalty as a contractual obligation—whereby damages arising from such a breach are compensated under Section 2913 of the CC—it was no longer possible to establish liability in parallel under the subsidiary provision of Section 2900 of the CC.
The Open Question of Liability for Omission Under Section 2901 of the CC
However, according to the Supreme Court, the appellate court did not address whether the requirements of Section 2901 of the CC were met. From the Decision in, it cannot be inferred that the Supreme Court definitively ruled out the partner’s liability under this provision.
Under Section 2901 of the CC, an obligation to intervene to protect another person may arise, in particular, if the tortfeasor has created a dangerous situation or has control over it, if justified by the nature of the relationship between the parties, or if a person, according to their capabilities and abilities, can easily avert harm of which they know or must know that its imminent severity clearly exceeds what is required to take action. The Supreme Court, however, emphasized a key circumstance in this regard: the obligation to pay the court fee arose for the company itself. The reasons why it failed to fulfill this obligation therefore lay primarily in the inaction of the persons who had the legal authority to dispose of its assets, that is, its then-managers—and not in the inaction of the shareholder herself.
The question of whether, under specific circumstances, a shareholder might nevertheless be liable to the company for damages under Section 2901 of the CC thus remains open and will depend on whether the specific prerequisites for the duty to intervene are met.
Practical Implications of the Decision
By merely filing a shareholder lawsuit against the company, the plaintiff shareholders do not assume the obligation to finance the proceedings conducted on behalf of the company, as the company remains liable for the court fee, and the duty of corporate loyalty does not imply an obligation on the part of a shareholder to pay this fee from their own assets. If a shareholder decides to voluntarily pay the court fee on behalf of the company, this essentially constitutes the payment of a third party’s debt, and the shareholder acquires a claim against the company for the return of unjust enrichment.
However, this does not mean that filing a shareholder lawsuit is entirely risk-free for the shareholder. If the company fails to pay the court fee, there is a risk that the proceedings will be stayed and that the company may be obligated to reimburse the opposing party’s litigation costs. The shareholder may thus face a practical decision as to whether to finance the proceedings from his or her own funds, even though the law does not impose such an obligation on him or her.
At the same time, the Decision cannot be interpreted as a general exclusion of a shareholder’s liability for damages arising in connection with a shareholder lawsuit. Liability based on a breach of fiduciary duty may arise if a shareholder abuses the right to file a shareholder lawsuit and pursues illegitimate or disproportionate objectives through it.
Conclusion
The Decision provides a significant delineation of the boundaries of a shareholder’s duty of loyalty in the context of a shareholder lawsuit, confirming that while the principle of corporate loyalty constitutes the fundamental basis for a shareholder’s obligations and an important interpretive rule, it cannot be used without further ado to create new financial obligations that the law does not impose on the shareholder. This conclusion is also significant for preserving the practical functionality of the institution of a shareholder lawsuit. If exercising the right to file a lawsuit on behalf of the company automatically entailed a shareholder’s obligation to finance the proceedings from their own funds and potential liability for damages in the event they fail to do so, the shareholder could effectively be discouraged from the legitimate use of this instrument for the protection of the company.
However, a shareholder’s protection is not unlimited – if a shareholder pursues illegitimate or disproportionate goals by filing a shareholder lawsuit, his or her conduct may constitute a breach of fiduciary duty and, in some cases, may also give rise to liability for damages caused to the company.
[1] Or a member of the supervisory board, an influential person, or another shareholder, in accordance with the provisions of Section 157(2) of the ZOK.
[2] In particular, the Supreme Court’s ruling dated May 27, 2021, Case No. 27 Cdo 1767/2020.
Mgr. Ondřej Růžička, attorney – ruzicka@plegal.cz
Mgr. Ráchel Kouklíková, junior lawyer – kouklikova@plegal.cz