Milestar Ltd, Re [2023] EWHC 2153 (Ch) (08 September 2023)

Milestar Ltd, Re [2023] EWHC 2153 (Ch) (08 September 2023)

Permission to continue the derivative claims is granted because each claim is one that a director acting in accordance with s.172 would consider worth pursuing, the claims are not barred by s.263(2)(a), the claimant is acting in good faith, and the claims are more appropriately brought as derivative actions rather than s.994 proceedings. The claimant is entitled to an indemnity for costs, subject to review if circumstances change.

Citation
[2023] EWHC 2153 (Ch)
Parties
Claimant: Hitesh Gandesha; First Defendant: Narendra Gandesha; Second Defendant (executor of Surendra Kumar Gandesha): Amit Gandesha; Second Defendant (executor of Surendra Kumar Gandesha): Vinesh Gandesha; Third Defendant: Milestar Limited
Jurisdiction
England and Wales
Judgment Date
08 September 2023
Procedural Posture
Derivative Claim / Permission Application (second Stage Hearing)
Outcome
Permission granted to continue derivative claims; indemnity for costs awarded to claimant.
Legal Topics
Derivative Claims, Directors' Duties, Shareholder Disputes, Costs Indemnity, Companies Act 2006 S.260 263
Company Law Civil Procedure Derivative Claims Directors' Duties Shareholder Disputes Costs Indemnity Companies Act 2006 S.260 263

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Parties

Hitesh Gandesha

Claimant

Narendra Gandesha

First Defendant

Amit Gandesha

Second Defendant (executor of Surendra Kumar Gandesha)

Vinesh Gandesha

Second Defendant (executor of Surendra Kumar Gandesha)

Milestar Limited

Third Defendant

Procedural Posture

Derivative Claim / Permission Application (second Stage Hearing)

Legal Issues

  1. 1 Whether permission should be granted to continue derivative claims under s.261 Companies Act 2006
  2. 2 Whether claimant is acting in good faith
  3. 3 Whether claims are barred by s.263(2)(a) Companies Act 2006

Ratio Decidendi

Permission to continue the derivative claims is granted because each claim is one that a director acting in accordance with s.172 would consider worth pursuing, the claims are not barred by s.263(2)(a), the claimant is acting in good faith, and the claims are more appropriately brought as derivative actions rather than s.994 proceedings. The claimant is entitled to an indemnity for costs, subject to review if circumstances change.

Court Disposition

Permission granted to continue derivative claims; indemnity for costs awarded to claimant.

Orders

  • Permission granted to Hitesh Gandesha to continue the four derivative claims on behalf of Milestar Limited.
  • Milestar Limited to indemnify Hitesh Gandesha for costs incurred in the permission application and derivative claim, subject to review if circumstances change.