Territorial Jurisdiction in LLCs: Interpretation of Bylaws according to Order 9417/2025

In the complex world of corporate law, establishing the correct territorial jurisdiction for a dispute is crucial. The Court of Cassation, with Order No. 9417 of April 10, 2025, has provided essential clarification regarding litigation concerning the interpretation of the bylaws of Limited Liability Companies (LLCs), reaffirming the application of Article 23 of the Code of Civil Procedure.

Context of the Ruling: Bylaw Interpretation and Corporate Relationship

The judicial case involved parties L. and N. in a dispute focused on the exercise of pre-emption rights and the interpretation of the "denuntiatio," i.e., a shareholder's communication of their intention to transfer their shares. The decisive issue was not so much a share transfer that had already occurred, but rather the correct interpretation of the bylaw clauses governing this right and the communication procedure. The Supreme Court was called upon to decide whether litigation of this nature fell under cases related to "corporate relationships," which are subject to the special territorial jurisdiction provided for by Article 23 of the Code of Civil Procedure, which identifies the competent court as the place of the company's registered office.

Article 23 of the Code of Civil Procedure represents a derogation from the general rules of jurisdiction, concentrating corporate disputes before the judge of the place where the company is registered. This criterion aims to ensure greater efficiency and consistency in decisions relating to the internal life of companies, leveraging the presumed greater familiarity of the court with the dynamics and bylaws of the specific entity.

The Supreme Court's Holding: A Clarifying Principle

Order No. 9417/2025, reported by Dr. L. T., enunciated the following principle:

In disputes concerning the interpretation of bylaws, the criterion for determining territorial jurisdiction provided for by Article 23 of the Code of Civil Procedure applies, as these are cases that concern issues relating, directly or indirectly, to the corporate relationship. (Principle applied in a case concerning the exercise of the pre-emption right provided for by the Bylaws and the interpretation of the binding value of the denuntiatio, not being a dispute concerning the actual transfer of company shares).

This holding is of paramount importance. The Court of Cassation establishes that it is not necessary for the dispute to concern a share transfer that has already been finalized for Article 23 of the Code of Civil Procedure to apply. It is sufficient that the litigation concerns the interpretation of a bylaw clause that, by its nature, affects the rights and duties of shareholders and the life of the company. In the specific case, the interpretation of the procedures for exercising the pre-emption right and the effectiveness of the "denuntiatio" were considered issues intrinsically linked to the corporate relationship, as they define the rules of interaction between shareholders and influence the composition of the shareholder base, which are central elements for the governance of an LLC.

Practical Implications for Businesses and Professionals

This ruling offers clear directives:

• For LLCs: Precision in drafting bylaw clauses, especially those governing the circulation of shares and pre-emption rights, is more crucial than ever to prevent litigation and ensure legal certainty.
• For Shareholders: They must be aware that any dispute over the interpretation of bylaw rules will be subject to the jurisdiction of the court at the company's registered office, regardless of whether a share transfer has actually occurred.
• For Legal Professionals: It is essential to carefully assess the nature of the dispute: even if it does not strictly concern a share transfer, if the issue relates to the interpretation of the bylaws, jurisdiction will be established in the court of the registered office according to Article 23 of the Code of Civil Procedure.

The Supreme Court's orientation, already expressed in previous rulings such as Order No. 10322 of 2024, reinforces the centrality of the "corporate relationship" as a determining criterion for territorial jurisdiction.

Conclusions

Order No. 9417 of 2025 consolidates a fundamental principle for corporate law: disputes relating to the interpretation of an LLC's bylaws fall under the exclusive territorial jurisdiction of the court at the company's registered office, as these are issues directly or indirectly connected to the corporate relationship. This clarification is vital for the predictability and efficiency of justice in corporate litigation, ensuring that the internal dynamics of companies are managed by the most appropriate judge, for the benefit of legal certainty and the stability of commercial relations.