Zavarco Plc v Ranjeet Singh Sidhu

Zavarco Plc v Ranjeet Singh Sidhu

Mr. Sidhu is contractually liable under his undertaking in the memorandum, as interpreted with reference to the statement of capital and initial shareholdings and section 584 of the Companies Act 2006, to pay €84 million in cash for the 840 million shares he took on incorporation. Section 593 does not apply to subscriber shares, and the court has no power under section 606 to relieve him from this liability.

Parties
Claimant/respondent: Zavarco PLC; Defendant/appellant: Ranjeet Singh Sidhu
Jurisdiction
England and Wales
Judgment Date
22 July 2022
Procedural Posture
Civil Appeal / Appeal From High Court Judgment
Outcome
Appeal dismissed
Legal Topics
Payment for Shares, Subscriber Liability, Public Company Formation, Relief From Liability, Interpretation of Companies Act 2006
Company Law Payment for Shares Subscriber Liability Public Company Formation Relief From Liability Interpretation of Companies Act 2006

Case Brief

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Parties

Zavarco PLC

Claimant/respondent

Ranjeet Singh Sidhu

Defendant/appellant

Procedural Posture

Civil Appeal / Appeal From High Court Judgment

Legal Issues

  1. 1 Whether section 593 of the Companies Act 2006 applies to subscriber shares taken on incorporation
  2. 2 Whether Mr. Sidhu is liable to pay cash for 840 million shares under section 584 of the Companies Act 2006
  3. 3 Whether the court has power to grant relief under section 606 of the Companies Act 2006 for liability arising under section 584

Ratio Decidendi

Mr. Sidhu is contractually liable under his undertaking in the memorandum, as interpreted with reference to the statement of capital and initial shareholdings and section 584 of the Companies Act 2006, to pay €84 million in cash for the 840 million shares he took on incorporation. Section 593 does not apply to subscriber shares, and the court has no power under section 606 to relieve him from this liability.

Court Disposition

Appeal dismissed

Orders

  • Mr. Sidhu to pay €84 million to Zavarco PLC
  • Interest payable as previously ordered