Interpretation of Section 1179 of the Civil and Commercial Code in Cases of Shareholder Absence at Annual General Meetings Convened Under Section 1171

Abstract

Quorum is a crucial requirement for company shareholder meetings. While legal provisions stipulate quorum requirements for both initial and adjourned meetings, companies often establish specific quorum rules in their articles of association. However, a company's articles of association specifying that shareholder meetings "at all times" require a certain number of shareholders present to constitute a quorum creates ambiguity in interpreting whether "at all times" encompasses adjourned meetings.

Research reveals that the laws of the United Kingdom and the United States do not contain explicit provisions directly addressing this specific scenario. However, they include provisions empowering courts to order a shareholder meeting even if a quorum is not met, to ensure the company's continued operation. Conversely, Thai law does not grant such power to the courts. Therefore, it is necessary to apply the principle of teleological interpretation, which considers the broader context and objectives of the law, to resolve this issue. This approach suggests interpreting "at all times" as referring exclusively to the initially called shareholder meeting and excluding adjourned meetings. This exclusion would then subject adjourned meetings to Section 1179, Paragraph 2, which stipulates that quorum requirements need not be considered. This interpretation avoids potential deadlock situations, aligns with the fundamental objective of company formation—continuous profit generation—and prevents certain shareholders from exploiting the phrase "at all times" in bad faith.