Ghai & Ors v Chahal & Anor

Ghai & Ors v Chahal & Anor

The claimants did not make the alleged fraudulent misrepresentations. Even if they had, the first defendant did not rely on them or affirmed the Shareholders’ Agreement by his conduct. Restitution is impossible due to insolvency, so rescission is not available. The Shareholders’ Agreement stands and should be enforced.

Parties
Claimant: Akash Ghai; Claimant: Harjit Kaur Ghai; Claimant: Deepinder Singh Somal; Defendant: Ranjit Singh Chahal; Defendant: Bolbec Hall Limited
Jurisdiction
England and Wales
Judgment Date
27 August 2020
Procedural Posture
Civil (shareholder/company Dispute) / Judgment After Trial
Outcome
Judgment for the claimants
Legal Topics
Shareholders' Agreements, Fraudulent Misrepresentation, Rescission, Rectification of Register, Directors' Duties
Company Law Contract Law Equity Shareholders' Agreements Fraudulent Misrepresentation Rescission Rectification of Register Directors' Duties

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Parties

Akash Ghai

Claimant

Harjit Kaur Ghai

Claimant

Deepinder Singh Somal

Claimant

Ranjit Singh Chahal

Defendant

Bolbec Hall Limited

Defendant

Procedural Posture

Civil (shareholder/company Dispute) / Judgment After Trial

Legal Issues

  1. 1 Whether the claimants made fraudulent misrepresentations inducing the first defendant to enter into the Shareholders’ Agreement
  2. 2 Whether the first defendant was entitled to rescind the Shareholders’ Agreement
  3. 3 Whether the Shareholders’ Agreement should be enforced including rectification of the share register and appointment of directors

Ratio Decidendi

The claimants did not make the alleged fraudulent misrepresentations. Even if they had, the first defendant did not rely on them or affirmed the Shareholders’ Agreement by his conduct. Restitution is impossible due to insolvency, so rescission is not available. The Shareholders’ Agreement stands and should be enforced.

Court Disposition

Judgment for the claimants

Orders

  • Rectification of the share register to reflect the claimants’ shareholding
  • Appointment of Dr Ghai and Dr Somal as directors of the Company