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Can a party who is only (at best) beneficially interested in shares in a BVI company maintain an action for unfair prejudice?
That was one of the central questions posed in TIPP Investments PCC -v- Chagala Group Limited in proceedings before the BVI Commercial Court.
In his judgment (delivered on 9 November 2016), Justice Davis-White (Ag) emphatically answered that question in the negative. Nothing short of establishing membership of a company, that is, appearance of one’s name on the register of members in accordance with Section 41 of the BVI Business Companies Act, 2004 would suffice.
In the case, the Claimant acquired an interest in the Defendant Company’s shares (which were listed on the London Stock Exchange) via the CREST trading system. It held that interest by way of depositary interest. Claiming to have suffered unfair prejudice, the Claimant commenced proceedings in the Commercial Court against both the Company and its Directors.
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Beneficial interest insufficient to bring unfair prejudice proceedings