ARMENIA Law and Practice Contributed by: Hayk Hovhannisyan and Tachat Voskanyan, HAP
Of particular interest is the consolidation of com - pany shares. In particular, the company has the right, by decision of the meeting, to consolidate distributed shares, because of which two or more company shares are converted into one new share of the same type or class. Moreo - ver, it is noteworthy that the company has the right, by decision of the meeting, to split distrib - uted shares, because of which one distributed share of the company is converted into two or more shares of the same type or class. In this context, the Constitutional Court’s Decision No SDVo-903 of 13 July 2010, is noteworthy, within which the CC recorded that the institution of mandatory redemption of fractional shares is an economically justified process, and taking into account the international experience on the sub - ject, the CC finds that the institution of manda - tory redemption of fractional shares provided by law by the decision of the majority of sharehold - ers is legitimate in itself. However, the main issue is how the rights and legitimate interests of the minority are guar - anteed and protected under the conditions of the existence of such an economic institution. Another important development is the decision made by the Court of Cassation on 3 July 2020 in administrative case No. VD/1309/05/16. The Court ruled that Artashes Hovhannisyan did not have the right to challenge the CB’s positive supervisory opinion given to Ameriabank regard - ing the buyback of his ordinary registered shares in Ameriabank CJSC. The court stated that the issue raised by the plaintiff had no legal basis and could not be examined by the administrative court or any other court. The case was dismissed based on Article 96(1) (9) and Article 80(1)(1) of the Administrative Pro - cedure Code of the RA. According to the special opinion of the President of the Court of Cassa -
tion, Yervand Khundkaryan, the positive supervi - sory opinion given by the CB to Ameriabank on 30.11.2012 is not considered an administrative act. However, based on this opinion, Artashes Hovhannisyan lost 5 Ameriabank shares due to the consolidation of shares and redemption of fractional shares. The Court should have advised Hovhannisyan to clarify his claim in a way that aligned with the correct legal claim type arising from the dispute. The incorrect claim he submit - ted could not ensure proper judicial protection in administrative proceedings. The Court was required not only to inform Artashes Hovhann - isyan about the need to clarify his claim but also to indicate the correct type of claim that would allow him to protect his rights in administrative proceedings. According to the special opinion of the Presi - dent of the Civil and Administrative Chambers of the Court of Cassation Ruzanna Hakobyan, and judges Gor Hakobyan and Mamikon Drmeyan, the official clarification by the Central Bank is considered an administrative act. The Court act - ed lawfully by annulling the invalid administra - tive act and restoring the minority shareholder’s property rights. On 28 November 2016, a complaint regarding this case was submitted to the European Court of Human Rights. The complaint has been com - municated to the Government of RA and is cur - rently being examined. Additionally, according to the Law on Securities Market, any person who acquires more than 75% of securities of a cer - tain class through one or more transactions must offer to buy the remaining securities of that class from other shareholders in accordance with the law.
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