GUINEA Law and Practice Contributed by: Yves Constant Amani, YAC & Partners
10. Litigation 10.1 Frequency of Litigation
in unfair treatment or financial harm to share - holders, courts may review the board’s decisions for abuse of power or breach of fiduciary duty. Failure to adhere to these duties can result in legal liability, financial penalties or annulment of decisions, ensuring that anti-takeover measures serve a legitimate corporate purpose. 9.5 Directors’ Ability to “Just Say No” Directors cannot unilaterally reject a business combination but may take defensive measures if they act in the best interests of the company and its shareholders. The AUSCGIe, does not explicitly grant boards the power to “just say no” to a takeover without consulting shareholders. However, Article 822- 10 allows directors to adjust share rights or issue new shares to existing shareholders, which can serve as a defence against hostile takeovers. Additionally, Article 853-17 permits companies to restrict share transfers through their bylaws, making acquisitions more difficult. Despite these provisions, directors remain bound by their fiduciary duties under Article 330, which holds them personally liable for decisions that harm shareholder interests. If a board blocks a takeover without a legitimate corporate pur - pose, shareholders may challenge the decision in court. In conclusion, while directors cannot outright reject a business combination, they may imple - ment defensive strategies, provided these actions comply with corporate governance prin - ciples and fiduciary duties.
Litigation related to M&A transactions in Guinea is not as frequent as in some other legal sys - tems, but it does occur, particularly in cases involving shareholder disputes, minority rights and regulatory compliance. According to Article 198 of the AUSCGIE, failure to comply with mandatory disclosure require - ments or the declaration of regularity and conformity can result in the nullification of the merger. Additionally, Article 251 provides that shareholders have six months from the last reg - istration of the merger to challenge its validity in court. Litigation may also arise from conflicts of inter - est, particularly when directors or majority shareholders approve mergers that disadvan - tage minority shareholders. Under Article 853- 14, the statutory auditor must prepare a special report on related-party transactions, which can be used in legal challenges if conflicts of interest are identified. Furthermore, creditors have legal recourse if a merger negatively affects their claims. Article 680 allows creditors to demand guarantees or reimbursement before a merger is finalised. Overall, while M&A litigation in OHADA jurisdic - tions is relatively limited, legal actions typically focus on disclosure failures, minority share - holder rights, conflicts of interest and creditor protections. 10.2 Stage of Deal In OHADA jurisdictions, litigation related to M&A transactions is typically brought at three key stages.
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