Partnership: Obligation to Form a Dispute Committee When Majority Shareholders Waive Their Rights

Practical Laws of Islam as per the teachings of Imam Khamenei

Partnership: Obligation to Form a Dispute Committee When Majority Shareholders Waive Their Rights

English:

Question #1697:

According to the company charter, a committee, whose responsibility is to settle disputes, has to be set up. The committee cannot be set up because 51% of the shareholders have forgone their rights. Is it obligatory on those shareholders who have relinquished their rights to demand the formation of the committee so that the rights of the existing shareholders are upheld?

Answer #1697:

If the members — as required by the company charter — undertook to form the arbitration committee when it is necessary to do so, they have to abide by their undertaking. The issue of some shareholders relinquishing their rights should not be taken as a pretext for not honouring the pledge concerning the setting up of the arbitration committee.

-Imam Khamenei, Practical Laws of Islam, Importance and Conditions of Partnership