1. A person temporarily acting as the sole executive body of the MChJ  ––  who promptly substitutes for the director including because of illness  –– acts based on the decision (order) on his appointment.

2. The criminal court’s factual findings that a person is an unofficial manager [norasmiy rahbar*] has civil law consequences, including on powers of representation and invalidating concluded transactions.

The Supreme court’s position

The claimant and the respondent concluded contracts for works dd 21 January, 4 February, and 20 April 2020. The claimant asked the court to invalidate the three contracts under Arts 116 and 126 CC. Because such contracts were signed by person K who was not the manager of the claimant, and that the consent of the participants of the claimant when concluding the contracts.

According to the Order dd 30 December 2019, due to the illness of the previous manager [person K] of the claimant, person Y was assigned to temporarily perform the duties of the manager of the [claimant]. However, the claimant was unable to provide documents confirming when person K started working.

In addition, at the time of the conclusion dd 4 February 2020, person K had powers to conclude contracts, and he went on the labor leave after the conclusion of the contract, that is, from 5 February 2020. This situation is confirmed by order No 4K dd 5 February 2020, by claimant’s order No 1 dd 26 November 2020, and by the termination of the employment contract from 26 November 2020.

[The Court has cited Art 126 CC and Art 44 of Law on MChJ] Clause 7.11 of the claimant’s charter, approved on 12 May 2005, states that the manager acts on behalf of the company without a power of attorney and acts on behalf of the company with other institutions, organizations and citizens, deals with the company’s property and funds within the approved budget, concludes contracts, and resolves other issues stipulated by legislation.

The company’s charter grants the company’s manager the authority to conclude any contracts in the management of the company’s affairs. The contracts for works are a contract concluded in the course of ordinary commercial activities, such contracts are not considered substantial transactions, and the consent of the company’s participants is not required for the conclusion of such transactions.

The claimant’s representative’s arguments that the Taqiyatas District Criminal Court’s judgement of 6 April 2021 confirmed that person K had simultaneously managed both the claimant and the respondent cannot be accepted, since [criminal court] did not establish that person K had unofficially managed the respondent.

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*) This word is ordinarily used in the media in relation to a person who effectively controls and manages activities of a commercial legal entity. See here and here.