Dnanudge Ltd v Ventura Capital GP Ltd [2023] EWCA Civ 1142 (09 October 2023)

Dnanudge Ltd v Ventura Capital GP Ltd [2023] EWCA Civ 1142 (09 October 2023)

Article 9.2(a) must be read subject to Article 10.1; conversion of Series A Shares to Ordinary Shares constitutes a variation or abrogation of class rights, requiring written consent of holders of 75% in nominal value of Series A Shares; corrective construction or implication of a term is necessary to reconcile the provisions and avoid irrational and incoherent results.

Citation
[2023] EWCA Civ 1142
Parties
Appellant/defendant: DnaNudge Limited; Respondent/claimant: Ventura Capital GP Limited (acting for and on behalf of Ventura Capital LP Fund IV and Ventura Capital MG1 LP Fund)
Jurisdiction
England and Wales
Judgment Date
09 October 2023
Procedural Posture
Appeal / Court of Appeal Judgment
Outcome
Appeal dismissed
Legal Topics
Variation of Class Rights, Interpretation of Articles of Association, Shareholder Rights, Corrective Construction, Implied Terms
Company Law Contract Law Variation of Class Rights Interpretation of Articles of Association Shareholder Rights Corrective Construction Implied Terms

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Parties

DnaNudge Limited

Appellant/defendant

Ventura Capital GP Limited (acting for and on behalf of Ventura Capital LP Fund IV and Ventura Capital MG1 LP Fund)

Respondent/claimant

Procedural Posture

Appeal / Court of Appeal Judgment

Legal Issues

  1. 1 Whether conversion of Series A Shares to Ordinary Shares under Article 9.2(a) constitutes a variation or abrogation of class rights requiring consent under Article 10.1
  2. 2 Whether Article 9.2(a) should be read subject to Article 10.1
  3. 3 Whether corrective construction or implication of terms is appropriate to resolve drafting inconsistency

Ratio Decidendi

Article 9.2(a) must be read subject to Article 10.1; conversion of Series A Shares to Ordinary Shares constitutes a variation or abrogation of class rights, requiring written consent of holders of 75% in nominal value of Series A Shares; corrective construction or implication of a term is necessary to reconcile the provisions and avoid irrational and incoherent results.

Court Disposition

Appeal dismissed

Orders

  • Declaration that conversion of Series A Shares was void and of no effect due to lack of consent under Article 10.1
  • Rectification of the Company's register of members reinstating Series A Shares