Shareholder Data Open: Federal Court of Justice Strengthens Right to Information in Conflict with the GDPR

The Federal Court of Justice (BGH) has clarified: A request for information by a shareholder that also serves the purpose of using the names, addresses, and shareholdings of co-shareholders to make them offers to purchase their shares does not constitute an impermissible exercise of rights or an abuse of the right to information. Such a request for information is also not precluded by the provisions of the General Data Protection Regulation (BGH, decision of January 22, 2025 - II ZB 18/23).

Background

In its established case law, the Federal Court of Justice (BGH) recognizes the right of a shareholder in a partnership to know his contractual partner. This right may conflict with the interest of the shareholder concerned in keeping his personal data confidential. The Munich Local Court also saw a conflict with the General Data Protection Regulation (the "GDPR") and suspended two proceedings and referred them to the ECJ.

In the original proceedings, the plaintiffs demanded that the defendant limited partners disclose the names and addresses of all co-shareholders indirectly involved via the trustee. The trust agreements between the limited partner and the indirect co-shareholders contained a prohibition on the disclosure of this data.

On September 12, 2024, the ECJ ruled that the data may not be disclosed if the relevant agreement expressly excludes the disclosure of such personal data to other shareholders.

Facts of the case

The plaintiff was linked to the defendant, a trust limited partner, by a trust agreement and thus indirectly held interests in two fund companies. According to the articles of association of the fund companies, the provisions of the articles of association were to apply mutatis mutandis to the trustors, i. e., among others, the plaintiff. In addition, according to the articles of association, the trustors were authorized by the trust limited partnership to exercise their membership rights to the extent of their trust contribution, in particular to participate in general meetings.

In a letter from its lawyer, the plaintiff requested the defendant to provide information on the personal data and the shareholdings of all shareholders, i.e. the trust limited partners and the directly affiliated limited partners. It required this information in order to be able to exercise its membership rights in an informed manner and to make purchase offers to other shareholders. The defendant refused to disclose the information.

The Regional Court ruled in favor of the plaintiff. The defendant's appeal against this ruling was not allowed by the Court of Appeal and was dismissed as inadmissible. The defendant's appeal against this ruling is unsuccessful.

Reasons for the decision

The Second Civil Division of the Federal Court of Justice dismisses the appeal as unfounded.

The shareholder is entitled to a right to information

As the Federal Court of Justice has held in its case law since 2013 at the latest, a shareholder in a partnership is entitled to know his contractual partner. The right to information also applies to a trustor who is equivalent to a directly participating shareholder. It is limited by the prohibition of the unlawful exercise of rights (Section 242 of the German Civil Code (BGB)) and the prohibition of harassment (Section 226 BGB). The right to information includes the names and addresses of the co-shareholders and their shareholdings. A shareholder must know how the votes and thus the power relations within the company are distributed in order to be able to exercise his membership rights in an informed manner.

For the first time, the Federal Court of Justice clarified that it does not constitute an impermissible exercise of rights or an abuse of the right to information if the company "also" wishes to use the data of the co-shareholders "to make them offers to purchase their shares." The court also ruled for the first time that an agreement restricting the right to information is invalid pursuant to Section 166 (2) of the German Commercial Code (HGB). According to this provision, an agreement in the articles of association that excludes or restricts the information rights of a shareholder under Section 166 (1) HGB is invalid.

The information is GDPR-compliant

The BGH found that the transfer of personal data was lawful pursuant to Art. 6 para. 1 subpara. 1 b) GDPR. The transfer was necessary for the performance of the contract between the trustor and the trust limited partnership. In this regard, the BGH distinguishes between the reasons for the request for information:

• If the information is intended to enforce membership rights and the intended purchase of shares, direct communication with the co-partner is necessary and therefore the disclosure of name, address, and shareholding.
• If the information is used exclusively for the purpose of submitting purchase offers, direct communication and thus the disclosure of the co-shareholders' data is not necessary. In this case, the company may forward the shareholder's request to the co-shareholders.

No contradiction with the ECJ ruling of September 12, 2024?

Last year, the ECJ ruled that the disclosure of personal data is not permissible if the participation and trust agreements prohibit the disclosure of the data of indirect shareholders to the other shareholders. In such cases, the justification under Art. 6 para. 1 subpara. 1 b) GDPR does not apply. The disclosure of the data is not necessary for the performance of the contract.

In stark contrast to the Federal Court of Justice, the ECJ considers the essential feature of an indirect participation in a public fund company to be precisely the anonymity of the shareholders, including in their relations with each other. The persons concerned opted for confidential treatment of their data by the investment fund.

However, the BGH does not wish to follow the ECJ's assessment, as the facts of the respective decisions are different:

• In the ECJ cases, it remains unclear whether the trustors are treated as equivalent to the directly participating shareholders. No information on this point is provided in the judgment or in the orders for reference of the Munich Regional Court.
• In the case of the BGH, it is not apparent that the trust agreement prohibits the disclosure of personal data of the shareholders.

Outlook

The Federal Court of Justice continues its case law. It further strengthens the rights of shareholders requesting information. If, in addition to the intention to purchase, there is an interest in exercising membership rights in an informed manner, a request for information is not an abuse of rights. This view strengthens the secondary market for closed-end funds in Germany. The Federal Court of Justice also indicates that it will measure a contractual restriction of the right to information against the standard of Section 166 (2) of the German Commercial Code (HGB) and consider it invalid.

It is doubtful whether the ECJ considers such an interpretation and application of Section 166 (2) of the German Commercial Code (HGB) to be compatible with Article 6 (1) subparagraph 1 of the GDPR. The GDPR takes precedence over the national law of the Member States. What is "necessary for the performance of a contract" must therefore be interpreted autonomously under EU law. Even a provision in a contract that is supposedly invalid under national law is part of the contract and determines what is necessary for the performance of the contract. This is supported by the meaning of Art. 6(1) subpara. 1(b) GDPR, which leaves it to the contracting parties to determine the lawfulness of the data processing themselves. The national courts, and in particular the Federal Court of Justice, will therefore have to respect a contractual restriction on the right to information.