Supreme Court’s Decision No.2009Ma1311 states that a director retiring from office when there are more than minimum number of directors remaining in office as prescribed by Commercial Acts or by the articles of incorporation, the director naturally ...
Supreme Court’s Decision No.2009Ma1311 states that a director retiring from office when there are more than minimum number of directors remaining in office as prescribed by Commercial Acts or by the articles of incorporation, the director naturally no longer has the rights and duties of a director as of the director’s resignation or expiration of his term of office, and in the case that the director retains the effective rights and duties of the position despite his resignation or the expiration of his term of office, a Provisional Injunction on Performing the Duties of a Director can be requested by way of claim to confirmation of non-existence of the rights and duties of the director. This finding is reasonable in light of Article 386 Section 1 of the Commercial Acts, which limits the instance of a retiring director to retain rights and duties of a director to when the directors remaining in office would otherwise become fewer than the minimum number prescribed by Commercial Acts or by the articles of incorporation. On the other hand, the Decision states that since Article 386 Section 2 of the Commercial Acts allows for the court to appoint a person who is to temporarily perform the duties of a director upon application if required, e.g. in case where it is impossible or inappropriate for a retiring director who retains the rights and duties of a director under Article 386 Section 1 of the Commercial Acts to retain the rights and duties of a director, a Provisional Injunction on Performing the Duties of a Director cannot be requested separately based on his resignation or expiration of his term of office or the fact that retiring director had a reason to be terminated. However, a Provisional Injunction on Performing the Duties of a Director, which is a form of a preservative measure, is different in its purpose and principle from “a person who is to temporarily perform the duties of a director” as prescribed in Article 386 Section 2 of the Commercial Acts, it is more reasonable to understand that the two measures are not mutually exclusive. There are no laws showing that one cannot request a Provisional Injunction on Performing the Duties of a Director when it is appropriate to appoint a person who is to temporarily perform the duties of a director, and the merit of a Provisional Injunction on Performing the Duties of a Director, which is the temporary and emergency nature of the measure, is of a far greater benefit in reality in providing immediate relief to those in need than the appointment of a person who is to temporarily perform the duties of a director. Therefore, in the special circumstance where it is determinable that the person who is exercising the rights and duties of a retiring director does not in fact possess the status or the rights of a retiring director, it is reasonable to assume that it is allowable to request a Provisional Injunction on Performing the Duties of a Director by way of claim to confirmation of non-existence of the rights and duties of the director.