Download PDF - Weil, Gotshal & Manges

MOL Hungarian
Oil & Gas PLC
Client: MOL Hungarian Oil & Gas PLC
Date: June 7, 2011
Case & Venue: OJSC Surgutneftegas v. MOL
Hungarian Oil and Gas PLC (Metropolitan Court
of Budapest; Metropolitan High Court of Appeal)
Practice Group: Corporate Litigation
Weil Team: Partner László Nagy and senior
associate László Nanyista in Budapest
Weil secured a complete victory for MOL
Hungarian Oil & Gas PLC (MOL), Hungary’s
largest energy company, in litigation relating to
the hostile acquisition of a 21.2% stake in MOL
by OJSC Surgutneftegas, a Russian oil company.
Surgutneftegas initiated lawsuits against
MOL in 2009 and 2010, requesting that MOL’s
board of directors rescind its decisions to reject
the registration of Surgutneftegas in MOL’s
shareholders’ register (the 2009 Board Decision
Case and the 2010 Board Decision Case). As a
result of MOL’s board decisions, Surgutneftegas
could neither attend the 2009 and 2010 MOL
annual general meetings nor exercise any
shareholder rights at such general meetings.
In an additional lawsuit also initiated in 2009,
Surgutneftegas requested the repeal of the
resolutions adopted at MOL’s 2009 annual general
meeting (the 2009 AGM Case). Surgutneftegas
argued that the resolutions were invalid because
Surgutneftegas was unlawfully prevented from
attending MOL’s respective general meetings
and exercising its shareholder rights.
In the 2009 Board Decision Case and the
2009 AGM Case, Surgutneftegas’ claims were
fully rejected on the basis of Weil’s defense
in final and binding judgments at both the first
and second instance. The Metropolitan High
Court of Appeal delivered its final and binding
judgment on June 7, 2011. In the 2010 Board
Decision Case, the Metropolitan Court of
Budapest also delivered a first instance
judgment in favor of MOL on April 6, 2011.
Surgutneftegas did not file an appeal in this
latter case and, therefore, the judgment
became final and binding on June 1, 2011.
Weil successfully argued that MOL was not
obliged to register Surgutneftegas in its
shareholders’ register because Surgutneftegas
failed to fulfill the statutory conditions for the
registration, namely, Surgutneftegas failed to
obtain the Hungarian Energy Office’s acknowledgement
of its acquisition of MOL’s shares.
Weil persuaded both the first and second instance
courts that, due to Surgutneftegas’ failure to
obtain such acknowledgement, the acquisition
of MOL shares by Surgutneftegas did not
become effective vis-à-vis MOL. Consequently,
Surgutneftegas lacked standing in the lawsuits
to claim the repeal of the 2009 and 2010 board
decisions and the resolutions adopted at the
2009 annual general meeting.
The successful outcome of the lawsuits largely
contributed to Surgutneftegas not carrying out
its hostile overtures against MOL.
24
25