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A move towards no fault commercial divorce?

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A move towards no fault commercial divorce?

As Lord Hoffman emphasised in O’Neill v Phillips [1999] 1 WLR 1092, the jurisdiction under section 994 Companies Act 2006 to provide relief from unfairly prejudicial conduct of a company’s affairs does not provide the courts with a “no fault divorce” jurisdiction. Rather, the courts can only order a “buy out” of a shareholder’s interest under section 994 if the affairs of the company concerned have been conducted in a manner unfairly prejuA move towards no fault commercial divorce?dicial to the interests of that shareholder.

Likewise, although the courts in England and Wales have long held the power to order the winding up of a company in circumstances where it is “just and equitable” to do so (section 122 Insolvency Act 1986) they have no power to order a “buy out” of shares in such circumstances.

In contrast, in 2014 legislators in Singapore conferred on their courts an additional power to order a “buy out” in circumstances where there has been no “unfairly prejudicial” conduct but simply when it is considered “just and equitable” to do so: see section 254(2A) Singapore Companies Act (Cap.50, 2006 Rev. Edn). That jurisdiction and its parameters have been recently considered and confirmed by the Court of Appeal in Singapore in Ting Shaun Ping v Scanone Pte Ltd [2017] 1 SLR 95: see LQR 2017, 133(Jul), 372-377.

In light of Singapore’s example and that in other jurisdictions such as Canada and the Cayman Islands, is it not time for the recognition of a no fault jurisdiction for commercial divorce between participants in companies in England and Wales?

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