NEWSLETTER-2020-metin

18 NEWSLETTER 2020 Reasons for Nullity Under Article 391 of the TCC, a board of directors’ resolution is null and void, especially if it (i) contradicts the principle of equal treatment, (ii) does not comply with the basic structure of a joint stock company or does not maintain the principle of protection of capital, (iii) violates the rights of shareholders, especially which are of in- dispensable nature, or restricts or makes difficult the exercise of the same, and (iv) is within the scope of non-delegable authorities of other bodies, and is relevant to the transfer of such authorities. The wording of the Article where the expression “especially” is used, shows that the reasons for nullity are not exhaustively listed, and there may be other null and void resolutions not foreseen under the Article. The Article only lists frequent examples for null and void resolutions from practice. Each of the cases listed under the Article, as well as other probable cases for nullity, are discussed, below. It should be noted that an example given under a reason for nullity may at the same time fall under the scope of another reason. Resolutions Contradicting the Principle of Equal Treatment Although the Supreme Court considered resolutions contradicting with the principle of equal treatment null and void also under the For- mer TCC, the existence of an explicit provision under Article 357 of the TCC paves the way for determination of such resolutions. Pursuant to Article 357 of the TCC, shareholders of a joint stock company are equally treated under the same conditions. This provision is essential to the structure of a joint stock company. According to the preamble of the Article, although the shareholders are entitled to give up on the equal treatment principle with their votes and specific to the case at hand, this principle is absolute under certain conditions, and cannot be renounced as a whole and in all cases 3 . Therefore, inclusion of an ex- plicit provision regarding the nullity of the resolutions that contradict this principle is appropriate. For instance, a resolution stating that the shareholder who voted against the agenda item regarding distribution of dividends in a gen- 3 The Preamble of Article 357 of the TCC.