CWH, headquartered in Newton, MA, recently made a bylaw change which an arbitration panel has struck down.

NEW YORK CITY-Both sides claimed victories in an arbitration panel ruling that pitted CommonWealth REIT against Related Fund Management LLP and Corvex Management LP, which seek to remove CWH’s entire board. Wednesday’s ruling from the three-member panel denied Corvex and Related’s motion for partial summary judgment ordering CWH to elect new trustees. Yet the panel also determined that the Newton, MA-based REIT’s recently imposed bylaw change, imposing higher minimum requirements for requesting a consent solicitation date, was invalid.

That bylaw change, adopted this past April, set a minimum holding period of three years for stock ownership before requesting a consent solicitation date, along with a minimum ownership threshold of 3% of the office REIT’s stock. Meeting in New York City, the panel said the so-called “3+3 bylaws” made obtaining a consent solicitation date “unreasonably difficult,” although the panel also concluded that the trustees hadn’t acted in bad faith.

In its ruling, the panel ordered that the previous minimums of $2,000 of stock and one year of ownership be reinstated. Between them, Corvex and Related control 9% of CWH stock, but have only owned it since the beginning of 2013, and thus still fall short of the “2+1” threshold in the bylaws.

The panel, chaired by Henry J. Silberberg, ordered an evidentiary hearing for Oct. 7 to address the validity of CWH’s 2+1 bylaws along with Corvex and Related’s consent solicitation to remove the REIT’s board. In a statement, Keith Meister of Covex and Jeff Blau of Related call the ruling “a tremendous victory for shareholder rights and for all CommonWealth shareholders. We are gratified by the decision and look forward to October’s evidentiary hearing and an expeditious and favorable resolution that will enable shareholders to regain control of CommonWealth by year-end.”

For its part, CWH points to its previous assertion that “the purported consent solicitation undertaken by Corvex/Related has no legal effect and believes the rulings by the arbitration panel confirm this understanding. We look forward to continuing through the arbitration process and to a full hearing on these matters. We are confident that when all of the evidence is presented to the arbitration panel, the invalidity of the Corvex/Related consent solicitation will be established.”