BRITISH VIRGIN ISLANDS
COURT OF APPEAL
AMENDMENT TO COMPANY’S ARTICLES OF ASSOCIATION BY SHAREHOLDERS’ RESOLUTION – COMPULSORY REDEMPTION OF SHARES PURSUANT TO SHAREHOLDERS’ RESOLUTION – WHETHER RESOLUTION IN INTERESTS OF COMPANY – APPLICATIONS TO ADDUCE FRESH EVIDENCE
This was an Appeal by Staray Capital Limited (“Staray”) and Marlon Ray Chen against the learned Commercial Judge’s decision that a redemption notice issued pursuant to amended articles, to redeem Mr. Cha’s shares was invalid. Mr. Cha cross appealed. He challenged the findings that: (i) a shareholders resolution to amend the articles of association of Staray was in the interest of the company and that (ii) he was not entitled to relief under Section 184I of the BVI Business Companies Act (the “Act”) because he had not been unfairly prejudiced.
The Court of Appeal dismissed both the appeal and counter appeal and held, inter alia, that even if an amendment to a company’s articles of association operates to the disadvantage of a minority shareholder, this did not automatically mean the resolution which amended the articles was passed in bad faith particularly where, as here, the amendment applied equally to all the shareholders of Staray.