Ntzegkoutanis v Kimionis & Ors [2023] EWCA Civ 1480 (12 December 2023)

Ntzegkoutanis v Kimionis & Ors [2023] EWCA Civ 1480 (12 December 2023)

The Court of Appeal held that the statutory derivative claim procedure under Part 11 of the Companies Act 2006 does not preclude a petitioner from seeking relief in favour of the company within an unfair prejudice petition under s.994, provided the petitioner is acting in their own right as a member and not on behalf of the company. The court has jurisdiction to grant such relief, but it should only do so where it is appropriate and convenient in the context of the unfair prejudice proceedings. The Judge erred in striking out the claims solely on the basis of the Chime approach or section 260(2).

Citation
[2023] EWCA Civ 1480
Parties
Petitioner/appellant: Giannis Ntzegkoutanis; Respondent to the Petition and Appeal: Georgios Kimionis; Respondent to the Petition: Coinomi Limited; Respondent to the Petition: Coinomi Holdings Ltd (Cyprus); Respondent to the Petition: Coinomi Ltd (BVI)
Jurisdiction
England and Wales
Judgment Date
12 December 2023
Procedural Posture
Appeal (civil) From High Court (business and Property Courts, Insolvency and Companies List) / Appeal Judgment
Outcome
Appeal allowed
Legal Topics
Unfair Prejudice Petition, Derivative Claims, Directors' Duties, Abuse of Process, Remedies for Shareholders, Jurisdiction to Grant Relief to Company
Company Law Insolvency Law Unfair Prejudice Petition Derivative Claims Directors' Duties Abuse of Process Remedies for Shareholders Jurisdiction to Grant Relief to Company

Case Brief

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Parties

Giannis Ntzegkoutanis

Petitioner/appellant

Georgios Kimionis

Respondent to the Petition and Appeal

Coinomi Limited

Respondent to the Petition

Coinomi Holdings Ltd (Cyprus)

Respondent to the Petition

Coinomi Ltd (BVI)

Respondent to the Petition

Procedural Posture

Appeal (civil) From High Court (business and Property Courts, Insolvency and Companies List) / Appeal Judgment

Legal Issues

  1. 1 Whether relief in favour of the company can be claimed in unfair prejudice proceedings under s.994 Companies Act 2006 without following the statutory derivative claim procedure
  2. 2 Whether the 'Chime approach' (from Re Chime Corp Ltd) forms part of English law and restricts such relief to rare and exceptional cases
  3. 3 Whether the claims for compensation and constructive trust in favour of the company should be struck out as an abuse of process

Ratio Decidendi

The Court of Appeal held that the statutory derivative claim procedure under Part 11 of the Companies Act 2006 does not preclude a petitioner from seeking relief in favour of the company within an unfair prejudice petition under s.994, provided the petitioner is acting in their own right as a member and not on behalf of the company. The court has jurisdiction to grant such relief, but it should only do so where it is appropriate and convenient in the context of the unfair prejudice proceedings. The Judge erred in striking out the claims solely on the basis of the Chime approach or section 260(2).

Court Disposition

Appeal allowed

Orders

  • The order striking out paragraphs 32.2 and 32.3 of the petition is set aside.
  • The claims for compensation and constructive trust in favour of the company may proceed within the unfair prejudice petition.