Miller (Buidheann) Ltd v Walter BAU-AG & Ors [2006] ScotCS CSOH_84 (31 May 2006)

Miller (Buidheann) Ltd v Walter BAU-AG & Ors [2006] ScotCS CSOH_84 (31 May 2006)

Clause 13 of the Shareholders Agreement is clear and unambiguous: upon an Insolvency Event affecting a shareholder or its holding company, the affected shareholder loses all rights under the Agreement except for return of capital on winding-up. The second defenders, as registered shareholders and indirect subsidiary of the insolvent first defenders, are subject to this clause and have no right to participate in compensation following termination of the concession agreement. Alleged agency or beneficial ownership arrangements are irrelevant and incompatible with the Agreement, which requires all transfers to be consented to by all shareholders.

Citation
[2006] ScotCS CSOH_84
Parties
Pursuer: Miller (Buidheann) Limited; First Defender: Walter Bau-AG; Second Defender: Dywidag Systems International Limited
Jurisdiction
Scotland
Judgment Date
31 May 2006
Procedural Posture
Commercial Action (court of Session, Outer House) / Judgment After Debate on Declarators
Outcome
Declarators granted as sought by pursuers (decree de plano for second and third conclusions)
Legal Topics
Shareholders Agreement, Interpretation of Commercial Contracts, Insolvency Events, Beneficial Ownership of Shares, Consortium Relief, Termination of Concession Agreements
Contract Law Company Law Insolvency Law Shareholders Agreement Interpretation of Commercial Contracts Insolvency Events Beneficial Ownership of Shares Consortium Relief +1 more

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Parties

Miller (Buidheann) Limited

Pursuer

Walter Bau-AG

First Defender

Dywidag Systems International Limited

Second Defender

Procedural Posture

Commercial Action (court of Session, Outer House) / Judgment After Debate on Declarators

Legal Issues

  1. 1 Whether insolvency events affecting a holding company trigger Clause 13 of the Shareholders Agreement to restrict rights of a subsidiary shareholder
  2. 2 Whether the second defenders had any right to participate in compensation following termination of the concession agreement
  3. 3 Whether an alleged agency arrangement or beneficial ownership by a third party affected the operation of Clause 13

Ratio Decidendi

Clause 13 of the Shareholders Agreement is clear and unambiguous: upon an Insolvency Event affecting a shareholder or its holding company, the affected shareholder loses all rights under the Agreement except for return of capital on winding-up. The second defenders, as registered shareholders and indirect subsidiary of the insolvent first defenders, are subject to this clause and have no right to participate in compensation following termination of the concession agreement. Alleged agency or beneficial ownership arrangements are irrelevant and incompatible with the Agreement, which requires all transfers to be consented to by all shareholders.

Court Disposition

Declarators granted as sought by pursuers (decree de plano for second and third conclusions)

Orders

  • Declarator that the decision of the Insolvency Court, Augsburg, Germany dated 1 April 2005 was an Insolvency Event under Clause 13(D)(i) of the Shareholders Agreement.
  • Declarator that an Insolvency Event has occurred in relation to the second defenders under Clause 13 of the Shareholders Agreement and Articles of Association of Skye Bridge Limited.