SUMMARY: On 27 August 2025, the Swedish Supreme Court issued a judgment in a case involving SK (the “Plaintiff”) on the one hand, and JB and JF (the “Defendants”) on the other. The Supreme Court held that transferring a procured framework agreement from a jointly owned company to a company newly established and wholly owned by the Defendants, without informing or compensating the Plaintiff, was objectively intended to transfer economic value to the Defendants, giving them an undue advantage at the Plaintiff’s expense and incurring liability. The Supreme Court also held that, while the Plaintiff could not prove the value of the framework agreement, she had provided all the evidence reasonably possible, enabling the Supreme Court to estimate damages to a reasonable amount.
Background
In 2017, the Plaintiff and the Defendants jointly founded ENP-Gruppen AB, a company that provided healthcare services. Each of the three parties held one-third of the shares and were board members of ENP-Gruppen AB. In 2018, the company secured a framework agreement with Region Gävleborg in a public procurement process. However, due to a conflict among the shareholders, it was decided at the annual shareholders’ meeting that ENPGruppen AB was going to be liquidated. Later that day, the Defendants transferred the framework agreement from ENPGruppen AB to a company newly established and wholly owned by the Defendants without compensation. The Plaintiff was not informed of this transfer. ENP-Gruppen AB subsequently entered liquidation and was declared bankrupt.
The dispute
The Plaintiff sought damages from the Defendants under Chapter 29, Section 1 of the Swedish Companies Act. The Plaintiff asserted that the transfer gave the Defendants an undue advantage by transferring the framework agreement without remuneration, while reducing the value of her shares in ENPGruppen AB. This violated the principle of shareholder equality (Chapter 8, Section 41 of the Swedish Companies Act) and caused damage to the Plaintiff. The Plaintiff argued that her damages should amount to one-third of the new company’s earnings for two financial years, representing her lost share of profits from the government contract.
The Defendants disputed the claim, arguing that the principle of shareholder equality had not been breached. They contended that the framework agreement held no intrinsic value at the time of the transfer because the parties had previously decided to liquidate ENPGruppen AB. Any value arising from the framework agreement had been created by the Defendants’ labour and was not intrinsic to the framework agreement itself.
Both the Örebro District Court and the Göta Court of Appeals rejected the claim, ruling that the transfer of the framework agreement did not constitute an undue advantage and that the damages had not been substantiated. The Plaintiff appealed to the Swedish Supreme Court.
The Swedish Supreme Court’s judgment
The Supreme Court ruled that the assessment of whether a shareholder has been given an ‘undue’ advantage under Chapter 8, Section 41 of the Swedish Companies Act is holistic. While the economic value of the advantage is important, the reason for the action intended to create an undue advantage and the surrounding circumstances before and after the action should also be considered. In this case, the Supreme Court found that the framework agreement was ENP-Gruppen AB’s primary asset, with demonstrable economic value. This was evidenced by the Defendants’ efforts to transfer it, as well as by prior discussions of buying out the Plaintiff for 200,000 SEK. By transferring the framework agreement to the Defendants’ new company without disclosing this to the Plaintiff or compensating her for it, the Defendants effectively moved economic value from the jointly owned company to themselves, giving them an undue advantage in breach of Chapter 8, Section 41 of the Swedish Companies Act.
Regarding the proof of the damages, the Supreme Court referred to the case NJA 2017 p. 261 (“Sjukhuscaféet”) and stated that, although the injured party should prove the facts underlying a business valuation, the valuation itself is not a matter of evidence but an assessment made by the court. Moreover, if it is very difficult or impossible to prove the amount of the loss, the court may estimate damages to a reasonable amount under Chapter 35, Section 5 of the Swedish Code of Judicial Procedure, provided that the plaintiff has presented all the evidence reasonably available. In this case, the Supreme Court found that the evidence invoked by the Plaintiff could not be used to determine the value of the framework agreement. Due to the challenges involved in valuing the agreement, the absence of public information regarding market valuations of such agreements, and the Defendants having prevented the Plaintiff’s previous attempts to value the company, the Court used the evidentiary rule in the Swedish Code of Judicial Procedure, permitting a reasonable estimate and awarded damages of 200,000 SEK.