Annulment of common share capital increase contrary to good faith rule in joint stock companies

Every right and obligation shall be exercised in accordance with the general rule of good faith. The right to increase the share capital is not exempt from this general rule. In joint-stock companies, resolutions are taken by the majority votes. It is possible that shareholders holding the majority of the votes in joint stock companies where the majority rule is prevailing may ignore the interests of individual and minority shareholders in violation of the good faith rule. Some protective provisions have been introduced in the TCC to prevent the unjust treatment of individual and minority shareholders by the majority. One of the most important weapons at the hands of individual and minority shareholders who can not prevent the share capital increase decision in violation of the rule of good faith to be taken at the General Assembly meeting is to sue the company for the cancellation of the share capital increase. It is possible to summarize the types of share capital increases in violation of the good faith rule under four headings: (i) abuse of the right of share capital increase, (ii) violation of the principle to give the least damage to individual and minority shareholders while exercising the right to increase the share capital (iii) breach of the shareholder's duty of loyalty to the company and other shareholders in the share capital increase, and (iv) violation of the principle of equal treatment of shareholders in the share capital increase. If one of the situations listed under these four headings exist in a share capital increase, shareholders can apply to court for the annulment of the share capital increase.