Sale of shares concluded abroad – validity

A form of legal action is valid if it meets the requirements of the form specified by the law applicable to the contract or the law of the state in which it was concluded.

According to Article 180 of the Polish Code of Companies, the sale of shares in a limited liability company, its part or fraction of shares should be made in writing with notarized signatures. The growing international trade makes it increasingly practical to answer the question whether this provision applies in the case where the divestment takes place on the basis of a legal transaction subject to foreign law, often made abroad.

In a nutshell, the aim of Article 11 of Rome I Regulation and Art. Article 25 1 Polish Private International Law Act, is to provide international traders with a tool to execute transactions. It would be contrary to the purpose of these provisions to assume that a law governed by the Polish law relating to the form should be applied. Such an interpretation would be completely unauthorized. The principle of the current conflict of laws is that parties may engage in legal activities anywhere, and in the form of lex contractus may apply the law or apply the principle of locus regit actum. Forcing the application of another law is an exception that cannot be understood extensively.

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