CORPORATE | Italian Supreme Court on alleged unjustified removal of directors under simul stabunt, simul cadent clause

On 16 January 2025, the Italian Supreme Court issued its judgment in case No. 1121/2025, ruling on the application of the simul stabunt, simul cadent clause. The Court clarified that the termination of all directors pursuant to this clause – triggered in the case at hand by the revocation of certain directors without just cause (“giusta causa”) – does not, in principle, qualify as an implicit unjustified removal of the entire board of directors. Rather, the clause serves a legitimate purpose: preserving the balance within the board of directors and preventing distortions arising from the co-optation mechanism under Article 2386 of the Italian Civil Code. Accordingly, when not abusively applied, the clause does not constitute a revocation from the office and does not give rise to any right to compensation for the outgoing directors.  Indeed, by accepting their appointment, directors implicitly agree to the company’s by-laws, including provisions governing the conditions for the appointment and permanence of corporate bodies, and thus accepting the risk of early termination of their office without being entitled to damages.

Newsletter n. 107 – May 2025