“26.1 Each shareholder shall exercise all voting rights and powers of control available to him in relation to the Company to procure that, save with A Shareholder Consent, the Company shall not effect any of the following matters (a) Permit or cause to be proposed any amendment to the Articles, (b) Permit the appointment of removal of any person as director of the Company, or (c) Permit the Company to take any step to place the Company into administration or receivership or wind up the Company (save where it is insolvent within the meaning ofsection 123 of the Insolvency Act 1986 ) 26.2 As a separate obligation, severable from the obligations in clause [sic] 26.1, the Company agrees that, save with A Shareholder Consent, the Company shall not effect any of the matters referred to in subparagraphs (a) to (c) of Article 26.1 above.”
“… this wise guidance may also apply to legal questions as well as factual ones: in large and difficult cases, the court is more likely to be able to get to the right answer in light of the facts as found and after prolonged immersion in the case in the way that can only be achieved at a trial.”
“the court is satisfied that it has before it all the evidence necessary for the proper determination of the question and that the parties have had an adequate opportunity to address it in argument, it should grasp the nettle and decide it.”
“This must depend on the extent to which the issue of law is fact dependent. Where all the relevant facts can be identified there is no reason why the issue of law cannot be determined and, indeed, it will often be consistent with the overriding objective of the Civil Procedure Rules (CPR Part 1 ) for that to be done, in the interest, in particular, of saving time and costs.”
“47 In approaching an application for summary judgment where the relief sought is the making of a declaration, this must in my view be the correct approach. Whether or not the underlying facts or matters relevant to the declarations are made out is the key issue as far as summary judgment is concerned. If the defendant has a real prospect of successfully defending the points put forward by a claimant in support of the declarations, summary judgment should not be granted. 48 However, once it is established that the defendant has no real prospect of mounting a successful defence in respect of those facts or matters, it is unlikely to be in accordance with the overriding objective to require a full trial in order to decide whether the court should exercise its discretion to make the declarations which have been sought. In terms of costs, this would in most cases be entirely disproportionate where it has already been found that there is no realistic dispute in relation to the underlying facts or matters. Although there may still be disputes as to some of the facts which may be relevant to the court’s balancing exercise in deciding whether to exercise its discretion to make or refuse to make the declarations, this should not be a reason for refusing to undertake that task or, in most cases, being unable to undertake that exercise. 49 The reference to the “claim or issue” inCPR r 24.2 (a)(ii) must therefore in my view refer to the underlying facts or matters to which the declaration relates and not to the question as to whether, as a matter of discretion, the court should make the declaration, once it is satisfied in relation to those underlying facts or matters.”
“the court is of the opinion that it is just and equitable that the company should be wound up.”
"(2) If the petition is presented by members of the company on the ground that it is just and equitable that the company should be wound up, the court, if it is of the opinion – (a) that the petitioners are entitled to relief either by winding up the company or by some other means, and (b) that in the absence of any other remedy it would be just and equitable that the company should be wound up, shall make a winding up order; but this does not apply if the court is also of the opinion both that some other remedy is available to the petitioners and that they are acting unreasonably in seeking to have the company wound up instead of pursuing that other remedy."
“In Lau v Chu[2020] UKPC 24 ; [2020] 1 W.L.R. 4656, at [20]-[21] per Lord Briggs JSC, the Privy Council held that the legal burden of proof is on the applicant to establish his or her entitlement to relief and, if so, that a winding up would be just and equitable if there were no other remedies available, but that if the petitioner can so establish, then the legal burden of proof shifts to the respondent to prove that the petitioner has unreasonably failed to pursue some other available remedy rather than seeking a winding up.” iii) (at [190]) that: “As emphasised by Dillon J in Re St Piran Ltd [1981] 1 W.L.R. 1300 at 1307: "The words "just and equitable" are wide general words to be construed generally and taken at their face value. Whether in any case a winding up order should be made would depend on a full investigation of the facts of the particular case … The concept of justice and equity is a very wide concept …"”; iv) (at [191]-[192]) that: “91. In Re Westbourne Galleries[1973] AC 360 , Lord Wilberforce, having rejected the notion that the expression "just and equitable" required to be construed so as only to include matters ejusdem generis the preceding clauses to the thenSection 222(f) of the Companies Act 1948 , stated that: "…there has been a tendency to create categories or headings under which cases must be brought if the [just and equitable] clause is to apply. This is wrong. Illustrations may be used, but general words should remain general and not be reduced to the sum of particular instances…"; 192. Further, subsequently at 379B, Lord Wilberforce said: "The foundation of it all lies in the words "just and equitable" and, if there is any respect in which some of the cases may be open to criticism, it is that the courts may sometimes have been too timorous in giving them full force"”; v) (at [193]) that Lady Arden JSC had approved the approach of Lord Wilberforce as regards keeping the general words general and had noted in particular that it was impossible or undesirable to define the circumstances in which equitable considerations could arise; vi) (at [194]) that, whilst the jurisdiction is most often invoked in circumstances where the company is in substance a partnership, but it is clear that the jurisdiction is not so limited, and: "may be invoked whenever justice and equity require" (here quoting Peter Gibson Jin Ringtower, at 91F); and vii) (at [194]) that: “Whilst recognising that the categories or headings under which a just and equitable winding up petition might be brought ought not to be regarded as limited or reduced to the sum of particular instances, recognised grounds for seeking a winding up on the just and equitable ground include a loss of substratum, and a breakdown of trust and confidence within a quasi partnership.”
“of the opinion both that some other remedy is available to the petitioners and that they are acting unreasonably in seeking to have the company wound up instead of pursuing that other remedy.”
“… In a situation in which the 100% economic owner of the Company does not have control of it, and the person who does have control of it has no economic interest in it (either at all or that is more than nominal), disagrees with the 100% economic owner as to how to manage it and its resources, has so far spent or caused it to spend most of its money, is continuing to spend or cause it to spend its money, and is antagonistic towards the economic owner.”
“… The more challenging issue is the valuation rationale behind the “A” share in Koza Ltd, which includes the strategic and legal reasoning, case law, and market practices that support attributing significant value to the “A” share, despite its nominal face value of£1 .”
“… contrary to the good faith and essence of the agreement between the parties that the state of things which we find here should be allowed to continue.”
“It is sometimes said that the order in that case was made on the ground of " deadlock." That is not so. … although Mr. Rothman and Mr. Weinberg were not on speaking terms they communicated through third parties, the company's business was flourishing and the articles contained a provision for arbitration to which resort could be had in the event of their failing to agree on any point. The reason why the petitioner succeeded was that the court thought it right to make the order which it would have made had Mr. Rothman and Mr. Weinberg been carrying on business under articles of partnership which contained no provision for dissolution at the instance of either of them. People do not become partners unless they have confidence in one another and it is of the essence of the relationship that mutual confidence is maintained. If neither has any longer confidence in the other so that they cannot work together in the way originally contemplated then the relationship should be ended—unless, indeed, the party who wishes to end it has been solely responsible for the situation which has arisen.”
“It is undoubtedly true that the foundation of applications for winding up, on the "just and equitable" rule, there must lie a justifiable lack of confidence in the conduct and management of the company's affairs. But this lack of confidence must be grounded on conduct of the directors, not in regard to their private life or affairs, but in regard to the company's business. Furthermore the lack of confidence must spring not from dissatisfaction at being outvoted on the business affairs or on what is called the domestic policy of the company. On the other hand, wherever the lack of confidence is rested on a lack of probity in the conduct of the company's affairs, then the former is justified by the latter, and it is under the statute just and equitable that the company be wound up.”
“ … it is not a condition precedent to the making of an order under the subsection that the conduct of those who oppose its making should have been unjust or inequitable”
“That was neither a deadlock nor a quasi-partnership case. The winding up was sought (successfully) on the ground that the minority shareholder petitioner had lost confidence in the probity of the directors.”
“the words are a recognition of the fact that a limited company is more than a legal entity, with a personality in law of its own: that there is room in company law for recognition of the fact that behind it, or amongst it, there are individuals, with rights expectations and obligations into say that are not necessarily submerged in the company structure.”
“The “just and equitable” provision does not, as the respondents suggest, entitle one party to disregard the obligation he assumes by entering a company, nor the court to dispense him from it. It does, as equity always does, enable the court to subject the exercise of legal rights to equitable considerations; considerations, that is, of any personal character arising between one individual and another, which may make it unjust, or inequitable, to insist on legal rights, or to exercise them in a particular way.”
“Mr Ipek agrees to accept that the directors of Koza Altin are authorised to act on Koza Altin’s behalf in all matters in relation to Koza that Koza Altin can lawfully perform as a shareholder of Koza. The undertaking: 1. is given without prejudice to the parties’ rights and obligations in terms of the orders that make up the Interim Regime 2. is given without prejudice to the pending proceedings in the Constitutional Court of the Republic of Türkiye, and any subsequent proceedings in the European Court of Human Rights, challenging the confiscation of Koza Altin, and any relief that may be granted in those proceedings, including in respect of the restoration of any confiscated shares; and 3. does not apply to litigation, claims, or steps taken or purportedly taken in terms of court orders in Türkiye. For the avoidance of doubt, nothing in this undertaking waives Mr Ipek’s rights as Director or ‘A’ shareholder of Koza Ltd, nor his rights in any other jurisdiction or in matters unrelated to Koza Ltd.”
“154. I accept that the good faith and conflicts duties cannot be abrogated entirely: they form part of the irreducible core of a fiduciary’s duties to his principal. However, the scope of their operation can be limited, sometimes dramatically so.”
“The extent to which the shareholders could effectively agree that a particular nominee director could act in a way which he, and the rest of the board, saw to be positively against the interests of the company must be open to question”; and, at [67](e) “… it is doubtful whether, as a matter of English law, it is possible to release a director from his general duty to act in the best interests of the company”; however, at [67](g) “… I see no reason in principle why in relation to specific areas of interest, a director should not be released from his fiduciary duty to give his best independent judgment to the company”; and at [68]: “But whatever can be said as a matter of generality, I consider that the extent of the duties of a director in such a situation are very much fact-specific. The general duty is clear; the difficult question is the extent to which the duty is qualified. That qualification will depend critically on the context of the relationship and the particular action which is said to constitute a breach of duty.”
“(1) The limitations on the exercise of the power to amend a company’s articles arise because, as in the case of all powers, the manner of their exercise is constrained by the purpose of the power and because the framers of the power of a majority to bind a minority will not, in the absence of clear words, have intended the power to be completely without limitation. These principles may be characterised as principles of law and equity or as implied terms. (2) A power to amend will be validly exercised if it is exercised in good faith in the interests of the company. (3) It is for the shareholders, and not the court, to say whether an alteration of the articles is for the benefit of the company but it will not be for the benefit of the company if no reasonable person would consider it to be such. (4) The view of shareholders acting in good faith that a proposed alteration of the articles is for the benefit of the company, and which cannot be said to be a view which no reasonable person could hold, is not impugned by the fact that one or more of the shareholders was actually acting under some mistake of fact or lack of knowledge or understanding. In other words, the court will not investigate the quality of the subjective views of such shareholders. (5) The mere fact that the amendment adversely affects, and even if it is intended adversely to affect, one or more minority shareholders and benefit others does not, of itself, invalidate the amendment if the amendment is made in good faith in the interests of the company (6) A power to amend will also be validly exercised, even though the amendment is not for the benefit of the company because it relates to a matter in which the company as an entity has no interest but rather is only for the benefit of shareholders as such or some of them, provided that the amendment does not amount to oppression of the minority or is otherwise unjust or is outside the scope of the power. (7) The burden is on the person impugning the validity of the amendment of the articles to satisfy the court that there are grounds for doing so.”
“This is because in none of these cases is the shareholder’s vote altering the legal rights of all shareholders, including the dissenting shareholders. It is irrelevant that, in these latter examples, the vote may alter the value of the rights [of] shareholders. That is an incident of almost every corporate activity.”
“ … the pursuit of insolvency proceedings in respect of a debt which is otherwise undisputed will amount to an abuse in two situations. The first is where the petitioner does not really want to obtain the liquidation or bankruptcy of the company or individual at all, but issues or threatens to issue the proceedings to put pressure on the target to take some other action which the target is otherwise unwilling to take. The second is where the petitioner does want to achieve the relief sought but he is not acting in the interests of the class of creditors of which he is one or where the success of his petition will operate to the disadvantage of the body of creditors.”
“It is also clear from those authorities, and as a matter of common sense, that the jurisdiction of the court to dismiss a petition based on an undisputed debt on the grounds of collateral purpose must be exercised sparingly. Bankruptcy proceedings cannot be allowed to become the forum for a detailed investigation into past and present relationships or an exploration of what the petitioner hopes to gain from the insolvency of the company or individual, in financial or personal terms and a consideration of whether those hopes are legitimate or not.”
“[M]otive and intention as such are irrelevant … : the fact that a party who asserts a legal right is actuated by feelings of personal animosity, vindictiveness or general antagonism towards his opponent is nothing to the point… Accordingly the institution of proceedings with an ulterior motive is not of itself enough to constitute an abuse: an action is only that if the Court's processes are being misused to achieve something not properly available to the plaintiff in the course of properly conducted proceedings.”
“a purpose will not be regarded as illegitimate if it is no more than the natural consequence of the action succeeding.”
“Mr. Bateson says that the defendant's object is simply to wreck the plaintiff company and that his only motive is enmity against Mr. Smith. The judge, rightly in my opinion, thought that a petition could not be an abuse simply because the petitioner was actuated by malice. If a petitioner has a sufficient ground for petitioning, the fact that his motive for presenting a petition, or one of his motives, may be antagonism to some person or persons cannot, it seems to me, render that ground less sufficient.”
“I am not concerned with his motives or with the past conduct of the company, which was here deplorable or worse and which may have led the petitioner to have justifiable dislike for and a desire to see the downfall of some person such as the main protagonist in the company … the only proper purpose for which a petition can be presented is for the proper administration of the company’s assets for the benefit of all in the relevant class.”
“A petitioner who relies on the " just and equitable " clause must come to court with clean hands, and if the breakdown in confidence between him and the other parties to the dispute appears to have been due to his misconduct he cannot insist on the company being wound up if they wish it to continue.”
“The Petition should be struck out or dismissed on the basis that it is brought for improper collateral purposes, namely to persecute Mr Ipek for his perceived political affiliation and/or to unlawfully expropriate his assets and/or remove the Company’s assets from his control; and/or that Koza Altin has unclean hands.”
“is reserved for exceptional cases where those seeking to invoke it have put themselves beyond the pale by reason of serious immoral and deliberate misconduct such that the overall result of equitable intervention would not be an exercise but a denial of equity” and from [122] in the same case that: i) the party relying on the doctrine: “must show that the party seeking the relief has been guilty of or responsible for some misconduct which is “sufficiently closely connected” with the equitable relief sought”; ii) whether the misconduct is sufficiently closely connected to the relief sought depends on the facts of each case, but the test commonly cited is that it must have an “immediate and necessary relation to the equity sued for”; and iii) the misconduct must be ““in some way immoral and deliberate” and not trivial. However, “the court will assess the gravity and effect of misconduct cumulatively, so that, while the elements of misconduct taken individually might be too trivial for the maxim to be applied, they might be sufficient taken together.” and from [122] in the same case that: “must show that the party seeking the relief has been guilty of or responsible for some misconduct which is “sufficiently closely connected” with the equitable relief sought”; ““in some way immoral and deliberate” and not trivial. However, “the court will assess the gravity and effect of misconduct cumulatively, so that, while the elements of misconduct taken individually might be too trivial for the maxim to be applied, they might be sufficient taken together.”
“2. That Koza Ltd's Points of Defence be struck out in their entirety pursuant toCPR r.3.4 (2)(a) and / orCPR r.3.4 (2)(b) 3.