Conflicts of interests among shareholders in the general meeting

The Supreme Court (TS) confirms that the prohibition on voting rights under Article 190.1 c) of the Spanish Companies Act (LSC) only applies to rights and obligations arising from the articles of association or unilateral acts of the company. Disputes arising from external contractual relationships fall under the ordinary regime of Article 190.3 LSC and may be challenged if they harm the company’s interests.

In its ruling of May 28, 2025, No. 859/2025 (ECLI:ES:TS:2025:2489), the TS analyzes the scope of a conflict of interest of a shareholder at the general meeting of a corporation. In the case examined, a public limited company adopted a series of resolutions, one of which was challenged on the grounds that it contravened Article 190.1 c) of the Capital Companies Act (LSC). The challenger argued that the agreement meant that a debt owed by the company to a shareholder was canceled, which, in their opinion, should have meant that the shareholder had to abstain from voting.

The TS, however, concluded that there was no such obligation to abstain. In its view, the contested agreement did not seek to grant a right or release the partner from an obligation under the terms of Article 190.1 c) LSC. Rather, it was a modification of pre-existing credit rights in the context of a refinancing operation in which the partner acted as creditor. According to the Chamber, there was no unilateral action by the company or a modification of rights or obligations directly related to the corporate relationship, but rather an adjustment of conditions in an external contractual relationship.

This interpretation is not new. The TS refers to its own doctrine, already set out in Judgment No. 310/2021 of May 13, 2021 (ECLI:ES:TS:2021:1859), in which it established that the prohibition on voting provided for in Article 190.1 c) of the LSC only applies to situations arising from the articles of association or unilateral acts of the company. Thus, acts arising from ordinary contractual relations between the company and the shareholder acting as a third party are outside the scope of the provision, even if the latter obtains a benefit.

Conflict of interest regime for shareholders.

Article 190 of the LSC establishes two category of conflicts. On the one hand, those classified as serious (Article 190.1), which involve a direct prohibition on voting. On the other hand, ordinary conflicts (Article 190.3), in which the partner may vote, although if their vote is decisive and they are involved in a conflict, it is presumed that the agreement is detrimental to the company’s interests, which allows it to be challenged. This presumption is iuris tantum and admits evidence to the contrary.

The most complex case for interpretation within Article 190.1 is that contemplated in section c), relating to agreements whose purpose is to release a member from an obligation or grant them a right. The open wording of this case has generated doctrinal debate regarding its scope.

A first line of argument supports a broad interpretation, which would include not only rights and obligations of a corporate nature, but also those arising from contractual relationships between the company and the shareholder. For example, this category would include a shareholders’ meeting agreement whereby the company forgives a debt owed by a shareholder under a loan agreement.

In contrast to this position, a second school of thought defends a more restrictive interpretation of the provision, limiting its application exclusively to rights and obligations arising from the articles of association. Under this approach, agreements affecting external bilateral legal relationships—such as financing agreements, sales agreements, etc.—would not be subject to the prohibition on voting, without prejudice to the fact that, in the event of a conflict of interest and a decisive vote, they may be challenged under the ordinary conflict regime.

The judgment of May 28, 2025 confirms that the TS leans toward this second interpretation, reinforcing legal certainty by clearly defining the scope of application of the prohibition. This does not mean that agreements benefiting shareholders are not subject to control, but rather that, when it is not a strictly corporate relationship or a unilateral act, the appropriate mechanism for review will be that provided for in Article 190.3 of the LSC, through a challenge based on harm to the corporate interest.