Representation of Galasys Plc [2016] JRC 188 (17 October 2016)

Representation of Galasys Plc [2016] JRC 188 (17 October 2016)

Where the board is unable to act due to conflicts of interest and deadlock, shareholders in general meeting may exercise management powers by ordinary resolution; special resolutions are not required unless ratifying undisclosed interests. The EGM resolutions were validly passed and effective to discontinue litigation and restrict director authority.

Citation
[2016] JRC 188
Parties
Applicant: Mr Teh; Respondent: Mr Seah; Respondent: Mr Chuah; Former Director: Mr Lai
Jurisdiction
Jersey
Judgment Date
17 October 2016
Procedural Posture
Company Law Dispute / Post EGM Challenge to Validity of Resolutions
Outcome
Summons dismissed; EGM resolutions upheld.
Legal Topics
Board Deadlock, Shareholder Powers, Ratification of Board Decisions, EGM Resolutions, Director Conflicts of Interest
Company Law Board Deadlock Shareholder Powers Ratification of Board Decisions EGM Resolutions Director Conflicts of Interest

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Parties

Mr Teh

Applicant

Mr Seah

Respondent

Mr Chuah

Respondent

Mr Lai

Former Director

Procedural Posture

Company Law Dispute / Post EGM Challenge to Validity of Resolutions

Legal Issues

  1. 1 Whether ordinary resolutions at EGM were valid to discontinue litigation and restrict director authority
  2. 2 Whether special resolutions were required
  3. 3 Extent of shareholders' reserve powers when board is deadlocked

Ratio Decidendi

Where the board is unable to act due to conflicts of interest and deadlock, shareholders in general meeting may exercise management powers by ordinary resolution; special resolutions are not required unless ratifying undisclosed interests. The EGM resolutions were validly passed and effective to discontinue litigation and restrict director authority.

Court Disposition

Summons dismissed; EGM resolutions upheld.

Orders

  • No grounds to declare EGM resolutions invalid.
  • No further EGM to be convened.