‘Cassation’ rules company director can be dismissed only in case of proven fraud, gross misconduct

The Second Civil and Commercial Circuit of the Court of Cassation has rejected an appeal seeking the dismissal of a company director, upholding both the initial and appellate rulings that dismissed the lawsuit.

In its ruling, the court clarified that a director may only be removed if it is proven that he engaged in fraud, gross error, intentional harm to the company’s interests, sought personal gain at its expense, or undertook activities conflicting with its objectives. The appellants, it ruled, failed to provide such proof.

Attorney Dr. Fawaz Al-Khatib, representing the director, stated that the judgment strengthens the principle of stability in companies, affirming that the dismissal of a director is not a tool to be arbitrarily wielded by partners, even by the majority.

He emphasized that removals are bound by strict legal conditions to safeguard business continuity and protect the investment climate, highlighting the necessity of adhering to proper procedures under the Companies Law.

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