Hikari Miso (UK) Ltd v Knibbs & Ors [2023] EWHC 1340 (Ch) (05 June 2023)

Hikari Miso (UK) Ltd v Knibbs & Ors [2023] EWHC 1340 (Ch) (05 June 2023)

The SSA is clear and unambiguous: shareholders holding more than 25% or 30% (as applicable) have a right to veto any activity falling within the definition of Reserved Matters. The Company cannot act on such matters without the requisite shareholder consent. The SSA's construction gives effect to this veto, and there is no legal or contractual basis to override it by reference to directors' duties or other constraints. The parties are bound by the terms they agreed, and the veto operates as drafted.

Citation
[2023] EWHC 1340 (Ch)
Parties
Claimant: Hikari Miso (UK) Limited; Defendant: David Knibbs; Defendant: Lydia Smith; Defendant: Peter Conway; Defendant: Paul Newberry; Defendant: Daphne Smith; Defendant: Timothy Levy; Defendant: Roxana Nicu; Defendant: Simon Brown; Defendant: Stephen Knibbs; Defendant: Craig Burrows; Defendant: Sarah Burrows; Defendant: James Atlas; Defendant: Gerry Tomlinson; Defendant: Amanda Cowburn; Defendant: Ian York; Defendant: Hayley Tideswell; Defendant: Logical Resources FMCG
Jurisdiction
England and Wales
Judgment Date
05 June 2023
Procedural Posture
Commercial/shareholder Dispute / Final Judgment After Trial
Outcome
Declarations granted as to the construction of the SSA and the operation of Reserved Matters; no finding of breach triggering compulsory buy-out rights.
Legal Topics
Shareholder Agreements, Reserved Matters, Directors' Duties, Compulsory Buy Out, Corporate Governance
Company Law Contract Law Shareholder Agreements Reserved Matters Directors' Duties Compulsory Buy Out Corporate Governance

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Parties

Hikari Miso (UK) Limited

Claimant

David Knibbs

Defendant

Lydia Smith

Defendant

Peter Conway

Defendant

Paul Newberry

Defendant

Daphne Smith

Defendant

Timothy Levy

Defendant

Roxana Nicu

Defendant

Simon Brown

Defendant

Stephen Knibbs

Defendant

Craig Burrows

Defendant

Sarah Burrows

Defendant

James Atlas

Defendant

Gerry Tomlinson

Defendant

Amanda Cowburn

Defendant

Ian York

Defendant

Hayley Tideswell

Defendant

Logical Resources FMCG

Defendant

Procedural Posture

Commercial/shareholder Dispute / Final Judgment After Trial

Legal Issues

  1. 1 Proper construction of shareholder agreement (SSA)
  2. 2 Whether breaches of SSA occurred to trigger compulsory buy-out
  3. 3 How shareholder consent to Reserved Matters is manifested

Ratio Decidendi

The SSA is clear and unambiguous: shareholders holding more than 25% or 30% (as applicable) have a right to veto any activity falling within the definition of Reserved Matters. The Company cannot act on such matters without the requisite shareholder consent. The SSA's construction gives effect to this veto, and there is no legal or contractual basis to override it by reference to directors' duties or other constraints. The parties are bound by the terms they agreed, and the veto operates as drafted.

Court Disposition

Declarations granted as to the construction of the SSA and the operation of Reserved Matters; no finding of breach triggering compulsory buy-out rights.

Orders

  • Declarations as to the meaning and effect of the SSA's Reserved Matters provisions
  • No order for compulsory buy-out of shares