The Higher Court in Podgorica annulled the decision of the Basic Court, which previously ruled that the Board of Directors of "Plantaža" illegally dismissed the then CEO of the company in October 2021. Miroslav Vuković, and sent the case back for retrial, "Vijesti" learns.
The High Court, in the explanation of the verdict, which it handed down on January 12, states that the Board of Directors of a joint-stock company, such as "Plantaže", has the right to dismiss the executive director even without an explanation, as well as that it has no obligation to invite the director to the session at which the subject of his dismissal.
In November of last year, the Basic Court ruled that the dismissal was illegal, citing as the reason that Vuković was not invited to the session and that the decision had no explanation.
The higher court states that the reason of the higher court is unacceptable that it may be relevant in this dispute that there is no formal decision by which the board of directors of "Plantaž" decided that Vuković as executive director will not attend the session where his dismissal was decided.
"Such a request is an excessive formalism, especially in the context of answering the question, really decisively in this dispute, whether the Board of Directors could lawfully dismiss the executive director without explanation," the explanation stated.
The High Court also states that the Basic Court correctly states that the contested decision does not contain reasons for dismissal, but also that "however, there is no reason as to whether it is sufficient for the test of legality that the challenged decision states that it was made on the basis of Article 100, paragraph 1 point 8 of the "Plantaža" Statute", which stipulates that the board of directors appoints and dismisses the executive director, as well as on the basis of Article 124, paragraph 1, point 4 of that Statute, which stipulates that the executive director can be dismissed even before the end of the mandate in in other cases established by positive regulations.
"It is not clear from the first-instance verdict why the first-instance court does not consider the norm of Article 174, paragraph 3, of the Law on Business Companies, which stipulates that the Board of Directors can dismiss the executive director even before the end of his mandate, without providing evidence, as the applicable law for this case. "Due to a significant violation of the provisions of the civil procedure, the first-instance verdict was annulled," the High Court explained.
This court also states that, considering the level of explanation, "it is understandable that in a joint-stock company the executive director cannot hold that position despite the decision of the Board of Directors, and thus the will of the Board of Directors shaped by that decision."
"It is a function that is acquired by appointment, so the dismissal is not examined by the application of labor law, which is rightly pointed out in the appeal", the explanation stated.
The High Court also quotes the statements of witnesses and members of the board of directors about the state of the company before the dismissal of Vuković - workers were on the verge of a strike, unapproved financial reports, huge debts, SDT's police team at the door, poor cooperation with the executive director... Therefore, the court states that the decision on dismissal "was not arbitrary and inherently unfair, nor unreasonable in the circumstances of the case".
Bonus video:
