The High Court of Cassation and Justice has recently judged a referral in the interests of the Companies Law

The High Court of Cassation and Justice (HCCJ) has recently judged a referral in the interests of the law on the application of articles 72 and 15312 of the Companies’ Law no. 31/1990 (Companies’ Law) in relation to the provisions of (i) art. 1552 and 1554-1555 of the Civil Code from 1864 and (ii) art. 2030 of the Civil Code. This referral in the interests of the law was published in the Official Journal of Romania no. 153 dated 19.02.2018.

Briefly, as per Article 72 of the Companies’ Law, directors’ obligations and liability are regulated both by the Companies Law and the Civil Code rules on the mandate. Under Article 15312 of the Companies’ Law, the duration of the mandate of a joint stock company director cannot exceed 4 years and the appointment is valid only if the appointed individual expressly accepts the mandate. So, it seemed that a prolongation of such mandate was also subject to an express acceptance.

The general legal regime applicable to the mandate, expiry is one of the causes for the cessation of the mandate. However, although a director’s mandate has expired, lack of publicity allows third parties to not take into account such expiry and all deeds carried out by the respective director can be considered fully valid and binding for the company.

Since the courts of law had different views on the effects of the expiry of the mandate of a director from a joint stock company, the HCCJ was asked to pronounce a ruling on this matter. One of the opinions stated that the expiry of a director’s mandate does not result in the loss of the right to represent the company after such expiry and before the appointment of a new director. According to the other view, in case the current director’s mandate has expired and the Company has not registered another director in the public registries, the old director cannot act as legal representative of the company if he did not expressly accept an appointment or a prolongation of his mandate.

Considering the above, the HCCJ established that the director of a joint stock company whose mandate has expired can represent the company as long as there is no deed for the appointment of a new director and an express acceptance from the latter and as long as the cessation of the mandate was not published in accordance with the law.

Stratulat Albulescu - Attorneys at law