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Minority Oppression Remedy: Court Discretion and its Limits. Analysis of the BVI Case Law

Under section 184I(2) of the BVI Business Companies Act, 2004 (Act) the Court may, if it considers that it is just and equitable to do so, order relief that it thinks fit, if the conduct of which the member of a company complains is oppressive, unfairly discriminatory or unfairly prejudicial to that member. For the purpose of section 184I beneficial owners of shares are not members1.

This relief, commonly referred to as the oppression remedy, was introduced in the UK Companies Act, 1948 as an alternative to winding up on the just and equitable ground, which was regarded as too drastic a remedy in many cases2. Under section 184I of the Act, the Court has a wide discretion. However, there are limits to what the Court may order. This article discusses the types of relief that the BVI Court may order, considers how the court exercises its discretion and identifies the limits of that discretion based on leading BVI case law.

Types of Relief

The oppression remedy is one of the most effective tools available to shareholders when the conduct of the affairs of a company causes oppression, unfair prejudice or unfair discrimination. Unfairness in this context must be judged on an objective basis3. A good starting point for the purpose of ascertaining what type of relief a minority shareholder may seek is to look at the forms of relief available under section 184I(2) of the Act. The orders available include:

  1. in the case of a shareholder, requiring the company or any other person to acquire the shareholder’s shares;
  2. requiring the company or any other person to pay compensation to the member;
  3. regulating the future conduct of the company’s affairs;
  4. amending the memorandum or articles of the company;
  5. appointing a receiver of the company;
  6. appointing a liquidator of the company under section 159(1) of the Insolvency Act on the grounds specified in section
    162(1)(b) of that Act;
  7. directing the rectification of the records of the company; and
  8. setting aside any decision made or action taken by the company or its directors in breach of this Act or the memorandum or
    articles of the company.

 

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Minority Oppression Remedy: Court Discretion and its Limits. Analysis of the BVI Case Law

 


Jerry D. Samuel
Partner

British Virgin Islands   +1 284 852 1116


Jevgenija (Jane) Fedotova
Associate

British Virgin Islands   +1 284 852 1140


1. Claim No. BVIHC (COM) 2016/102 Tipp Investments PCC v Chagala Group Limited and Others
2. Latimer Holdings v Powell, [2005] 2 NZLR 328 (case CA 214/03 15th September 2004) cited in BVIHC(COM) 2015/0037 CH Trustees SA (as Trustee of the Maple Leaf Trust) v Omega Services Group Limited & Ors [98]
3. Claim No. BVIHC (COM) 0037 of 2015 CH Trustees SA (as Trustee of the Maple Leaf Trust) v Omega Services Group Limited & Ors

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