Kuwait Court of Cassation principle number 326

Summary: - A share in a limited liability company. Its owner may not be deprived of the fundamental rights it confers upon him, whether by a provision in the company's articles or by a resolution adopted by the majority at the general meeting. Reason: rights derived from the status of partner may not be encroached upon, foremost among them the right to remain in the company. Implication: a partner may not be expelled from the company before its dissolution or his own request to withdraw from it. Effect: removing a partner from management and ordering him to compensate for the damage he caused does not, as a general rule, constitute grounds for a judgment expelling him from it. The challenged judgment's departure from this and its ruling, in part, to expel the partner from the company because of his removal from management and the order that he pay compensation. A violation and misapplication of the law requiring partial cassation of the judgment. Rule: It is established in the jurisprudence of this Court that a share in a limited liability company confers upon its owner fundamental rights of which he may not be deprived and which may not be infringed, whether by a provision in the company's articles or by a resolution adopted by the majority at general meetings. These rights derive from his status as a partner in the company, and the partners must respect them and refrain from encroaching upon them. Foremost among these rights is the right to remain in the company, which entails that, as a general rule, a partner may not be expelled from the company before its dissolution or unless he himself requests withdrawal from it. Accordingly, since it is established in the papers, without dispute between the litigants, that they are partners in .... Advertising, Publicity and Publishing Company, a limited liability company according to its memorandum of association dated 2/9/2002 and amended on 28/10/2002, the appellant, as a partner therein, has fundamental rights, among the most important of which is his right to remain in that company. The partners must respect that right and refrain from encroaching upon it, notwithstanding his removal from its management and the order requiring him to compensate for the damage sustained by its partners pursuant to Articles 204 and 205 of Law No. 15 of 1960 promulgating the Commercial Companies Law, mentioned above. He therefore may not be expelled from it as a partner before its dissolution or unless he himself requests withdrawal from it, which the papers do not disclose. Since the challenged judgment, issued on 27/9/2012, departed from this view and ruled, in part, to expel the appellant from the company, it violated and misapplied the law, requiring its partial cassation in this respect.