Monday, 27 April 2015

Jersey: arbitration and the unfair prejudice remedy

Last week a copy of the Jersey Court of Appeal judgment Consolidated Resources Armenia v Global Gold Consolidated Resources Limited [2015] JCA061 was published (the judgment was handed down in March). Amongst the questions considered was one concerning the operation of the unfair prejudice remedy found in Article 141 of the Companies (Jersey) Law 1991 (the equivalent of section 994 of the UK Companies Act 2006). The judgment is noteworthy because the court adopted the approach taken in England, by the Court of Appeal in Fulham Football Club (1987) Ltd v Richards [2011] EWCA Civ 855, [2012] Ch 333], and held that there was no reason of public policy for holding that either an unfair prejudice claim or a claim for a just and equitable winding-up were incapable of arbitration. Bompas JA, delivering the judgment of the court, noted (at para 89):
There are many good reasons why the shareholders in a company may agree to refer future or present disagreements to arbitration. They may wish to maintain confidentiality to preserve commercial secrets, or to avoid tarnishing the public reputation of the company perhaps to protect the price of the company’s shares on a stock exchange. They may wish to have a method of achieving a speedier resolution than would be achievable through the courts. There is no public interest in denying parties the opportunity to do so unless there are third parties rights that cannot be protected in the arbitration. The duty of the courts is to hold the parties to the agreement they have reached".

Friday, 24 April 2015

UK: England and Wales: High Court authorises ESMA to conduct on site inspection of UK trade repository

Last month, Mrs Justice Rose, sitting in the High Court, authorised the European Securities and Markets Authority to carry out an inspection at the premises of a UK trade repository (DTCC Derivatives Repository Ltd). This was the first time that such permission had been given, within the framework set out in regulation 17 of the Financial Services and Markets Act 2000 (Over the Counter Derivatives, Central Counterparties and Trade Repositories) Regulations 2013. Today, a short judgment was published in which Mrs Justice Rose explained her decision and the principles that applied to the court's power to grant permission: see European Securities and Markets Authority (ESMA) v DTCC Derivatives Repository Ltd [2015] EWHC 1085 (Ch).

UK: Supreme Court to give judgment next week in Olympic Airlines

The Supreme Court has announced that it will hand down its judgment next Wednesday in Trustees of the Olympic Airlines SA Pension and Life Assurance Scheme v Olympic Airlines SA: see here. A summary of the issues before the court, which included the meaning of 'establishment' under the Insolvency Regulation (Council Regulation (EC) 1346/2000), is available here.

Thursday, 23 April 2015

UK: Scotland: loans to football club were not repayable on demand

Lord Tyre, sitting in the Court of Session (Outer Court), gave judgment earlier this month in Nixon v Livingston Football Club Ltd [2015] CSOH 43. At issue was whether money loaned by a director (and companies under his control) to the Livingston Football Club was repayable on demand. The judge held, on the evidence before him, that the loans were not repayable on demand but only when the company could afford to repay them. In doing so he noted that "... the concept of making a loan on the basis that it is not repayable unless and until the borrower can afford to repay, which might be regarded in certain contexts as uncommercial and therefore improbable, seems to me to be much less improbable where the borrower is a company operating a football club" (para. [26]).

Wednesday, 22 April 2015

UK: Supreme Court gives judgment in Jetivia v Bilta

The Supreme Court gave judgment earlier today in Jetivia SA v Bilta (UK) Ltd [2015] UKSC 23: see here or here (pdf). The court held that the appeal should be dismissed, finding that the wrongful activity of a company's directors and shareholders could not be attributed to the company; it also held that section 213 ("Fraudulent trading") of the Insolvency Act 1986 had extra-territorial effect.

A summary of the decision is available here (pdf) and also in the below video (if you cannot see the video, try viewing it here):

Tuesday, 21 April 2015

Ghana: company law reform - the Companies Bill 2013

A new session of Parliament began in February: see here. Amongst the Bills for consideration is one that will introduce a new company law framework: the Companies Bill 2013, a copy of which is available here (pdf).

Monday, 20 April 2015

Mongolia: new edition of the corporate governance code published

A new edition of the Mongolian corporate governance code has recently been published by the Financial Regulatory Commission: see here.

Friday, 17 April 2015

UK: Supreme Court to give judgment next week in Jetivia v Bilta

The Supreme Court has announced that it will hand down its judgment next Wednesday in Jetivia SA v Bilta (UK) Ltd: see here. A summary of the issues before the court, which included the operation of section 213 of the Insolvency Act 1986, is available here.

UK: feedback sought on the Code for the Voluntary and Community Sectors

Ten years ago, a code of governance for the voluntary and community sectors was published. The code, titled Good Governance - a Code for the Voluntary and Community Sectors, was last updated in 2010: see here. The code's steering group has this month started seeking views on whether the code addresses the main governance challenges faced by larger and more complex voluntary and community organisations: see here.

Nigeria: National Code of Corporate Governance - draft published by Financial Reporting Council

Earlier this week the Financial Reporting Council published for comment a draft National Code of Corporate Governance: see here. The Code is divided into three parts: private sector, public sector and not for profit. A short press release about the new Code, with information on how to respond to the consultation, is available here.

Thursday, 16 April 2015

South Africa: the King IV corporate governance code - terms of reference published

The terms of reference for the review of South Africa's corporate governance code have been published: see here (pdf). Further information about the review, which will lead to a new governance code to be known as 'King IV', is available here.

Singapore: company law reform - implementation of the Companies (Amendment) Act 2014

Parliament passed the Companies (Amendment) Bill 2014 in October last year: see here (pdf). A copy of the Act is available here. The Act is being implemented in two stages, the date of stage one being 1 July 2015. The Accounting and Corporate Regulatory Authority  yesterday provided information concerning the provisions that will be implemented as part of stage one: see here. Further background information is available here.

Finland: corporate governance code review underway

A review of the Finnish Corporate Governance Code (published in 2010 by the Securities Market Association) is underway. The aim is to have a new code in force for the spring of 2016. Further information, in Finnish, is available here. Information about the review has not yet been published in English on the SMA website.

Wednesday, 15 April 2015

Australia: a 30% target for women on boards

Various initiatives are taking place, the aim of which is to increase the proportion of women on company boards. In February, the Australian Council of Superannuation Investors set a target of 30% for women on ASX200 company boards, to be met within three years: see here (pdf). A few days ago, the Australian Institute of Company Directors adopted the same target, but argued that it was appropriate for all companies, not just listed companies: see here (pdf).

Tuesday, 14 April 2015

Ireland: Companies (Amendment) Bill 2015 - officer liability for breaches of employment law

The Companies (Amendment) Bill 2015 was introduced in the Dáil Éireann earlier this year: see here. It is a Private Member's Bill and a copy, as introduced, is available here (pdf). The Bill will, if enacted, amend the Companies Act 2014 by inserting the following new subsection in section 224 ("Directors to have regard to interests of employees") of the 2014 Act:

(3) Where a breach of employment law is committed by a body corporate or by a company officer or officers acting on behalf of a body corporate and is determined to have been so committed, with the consent, connivance or approval of, or to have been attributable to any neglect on the part of, a person or persons who, when the breach was committed was a company officer or officers of the body corporate, then that person or persons shall be personally liable for the breach committed.”

Monday, 13 April 2015

Philippines: SEC recommendations on governance best practice

The Philippines Securities and Exchange Commission has written to all publicly listed companies recommending that they follow certain governance practices (as outlined in the ASEAN Corporate Governance Scorecard), including the appointment of at least one female independent director: see here (pdf).

Austria: amended corporate governance code published

Earlier this year the Working Group for Corporate Governance published an amended version of the Austrian corporate governance code. A copy of the new code, in English, is available here (pdf).

Friday, 10 April 2015

Cayman Islands: Law Reform Commission update on directors' duties project

The Law Reform Commission has recently published an update on its current work programme, including its project on directors' duties: see here (pdf). The Commission states that it plans to publish a consultation paper discussing, amongst other things, directors disqualification and indemnification. It also notes that the majority of those responding to its consultation last year on the codification of directors' duties were against any form of codification.

OECD Corporate Governance Factbook - second edition published

Yesterday the OECD published the second edition of its Corporate Governance Factbook: see here (pdf). The book provides information on all OECD member countries as well as Argentina, Brazil, Hong Kong, India, Indonesia, Lithuania, Saudi Arabia and Singapore.

Thursday, 9 April 2015

Kenya: Companies Bill 2014 withdrawn in order to be republished in revised form

A new company law framework - the Companies Bill 2014 - was introduced last year in the National Assembly: see here (pdf) . It was, however, withdrawn by its sponsor earlier this year. Hansard, the record of debate, explains why: the Departmental Committee on Justice and Legal Affairs, which has considered the Bill, has said that many clauses need to be amended and for this reason the Bill should be withdrawn and republished with the incorporated amendments. A copy of the Hansard record is available here (pdf).

Burma: consultation on new companies law

The Directorate of Investment and Company Administration has recently consulted on a new company law framework. Draft chapters of the new legislative framework - called the Companies Law - have been published: see here. The draft chapters are accompanied by a policy paper, which explains some of the changes being made (including new statutory duties for directors): see here (pdf).

Wednesday, 8 April 2015

Fiji: Companies Bill 2015 introduced in Parliament

Earlier this year the Companies Bill 2015 was introduced in Parliament and referred to the Standing Committee on Justice, Law and Human Rights. A copy of the Bill as introduced is available here (pdf). Its purpose is to modernise the legal framework concerning the incorporation, regulation and winding-up of companies in Fiji.

Directors' duties are set out in some detail (see Part 10, division 3) and in language very similar to that found in Part 10, Chapter 2, of the UK's Companies Act 2006. Elsewhere in the Bill it is provided that only a natural person can be a director (clause 93) and all companies (with the exception of private companies) must have at least three directors (clause 91). Private companies must have at least one director (clause 91). The Bill also provides that shares of a company have no par value (clause 193) and it removes the power of companies to issue bearer shares (clause 195).

Tuesday, 7 April 2015

Hong Kong: the new uncertificated securities market regime

The Securities and Futures and Companies Legislation (Uncertificated Securities Market Amendment) Ordinance 2015 was published in the Gazette at the end of last month. The Ordinance contains the framework for Hong Kong's new uncertificated securities market regime. Further information, including a copy of the Ordinance, is available here.

Monday, 6 April 2015

Oman: CMA seeks comments on draft corporate governance code

The Capital Markets Authority has published for comment a draft of its corporate governance code for public companies: see here (pdf). A copy of the code, in English, is expected in the next couple of weeks.

Update (8 April 2015) - a copy of the draft code, in English, is available here (pdf).

Friday, 3 April 2015

UK: PRA supervisory statement on internal governance

The Prudential Regulation Authority yesterday published a supervisory statement on internal governance: see here (pdf). The statement sets out the PRA's expectations of banks, building societies and PRA-designated investment firms, in respect of their compliance with internal governance rules in the PRA Rulebook. It includes, for example, the PRA's view on when it is appropriate for a firm to have an audit committee.

Thursday, 2 April 2015

South Africa: 'enforcement action' during business rescue proceedings

The Supreme Court of Appeal gave judgment towards the end of last month in Cloete Murray NO v FirstRand Bank Ltd (20104/2014) [2015] ZASCA 39: see here (pdf). The operation of section 133 of the Companies Act 2008 was at issue: it imposes restrictions on the bringing or continuing of legal proceedings against the company including enforcement action. The court held that 'enforcement action' did not include the cancellation of an agreement concluded prior to the start of the business rescue proceedings. A summary of the decision is available here (pdf).

Wednesday, 1 April 2015

UK: England and Wales: what is a collective investment scheme?

The Court of Appeal gave judgment last week in Financial Conduct Authority v Capital Alternatives Ltd [2015] EWCA Civ 284. At issue was whether several schemes were collective investment schemes within section 235 of the Financial Services and Markets Act 2000. A short summary of the decision, prepared by the ICLR, is available here and this contains the following headnote: "The critical question in deciding whether property was 'managed as a whole' within section 235(3)(b) of the Financial Services and Markets Act 2000 was whether a characteristic feature of the arrangements under the scheme was that the property to which those arrangements related was managed as a whole. Whether that condition was satisfied required an overall assessment and evaluation of the relevant facts".

Tuesday, 31 March 2015

UK: Grant Thornton's housing governance review 2015

Grant Thornton has published a review of the governance of the the sixty largest (by income) not for profit registered providers of social housing in England: see here (pdf). The review is based on the disclosures contained in financial statements as well as best practice guidance including the 2010 edition of the code of governance published by the National Housing Federation.

Note - a revised edition of the NHF code of governance was published earlier this year: see here (pdf).

Monday, 30 March 2015

UK: Election 2015: Labour Party outlines corporate governance reforms

The Labour Party today published a manifesto for business, as part of its general election 2015 campaign: see here (pdf). The manifesto includes several corporate governance proposals:
We will give institutional investors a duty to act in the best interests of ordinary savers and to prioritise the long-term growth of the companies they invest in. We will change takeover rules to strengthen the role of long term investors by restricting voting to those already holding shares when a bid is made, and strengthen the public interest test to protect the UK’s science and research base. Everybody supports reward for outstanding achievement. Labour will improve the link between executive pay and performance by simplifying pay packages, putting employee representation on remuneration committees and requiring investment and pension fund managers to disclose how they vote on pay and other issues".

UK: The Companies, Partnerships and Groups (Accounts and Reports) Regulations 2015

The Companies, Partnerships and Groups (Accounts and Reports) Regulations 2015 were made last week and come into force on 6 April 2015: see here or here (pdf). The purpose of the Regulations is to update and consolidate existing legislation on the content and presentation of company accounts, making amendments to Part 15 (Accounts and reports) of the Companies Act 2006 and other legislation, and in doing so implement Chapters 1-9 of Directive 2013/34/EU.

The Regulations will, for example, permit small companies to prepare an abridged balance sheet and abridged profit and loss account; they also remove the requirement for micro-entity companies (as defined by sections 384A and 384B of the Companies Act 2006) to prepare a Directors’ Report. Further information is available in the accompanying explanatory memorandum (herepdf), impact assessment (here, pdf) and transposition note (here, pdf).

IOSCO publishes new Code of Conduct Fundamentals for Credit Rating Agencies

The International Organization of Securities Commissions has published a new edition of its Code of Conduct Fundamentals for Credit Rating Agencies. A copy of the new code is contained in Appendix A of the report published last week by the IOSCO, in which it explained the changes made in the new edition: see here (pdf).

UK: HM Treasury consultation - Markets in Financial Instruments Directive II transposition

HM Treasury has begun a consultation regarding transposition of the Markets in Financial Instruments Directive II: see here (pdf). The consultation paper is accompanied by four draft statutory instruments (see here) and an impact assessment (see herepdf).

UK: England and Wales: RTM companies can only manage one self-contained building or part of a building

The Court of Appeal gave judgment last Friday in Triplerose Ltd v Ninety Broomfield Road [2015] EWCA Civ 282 and unanimously held that Upper Tribunal (Lands Chamber) had been wrong to conclude that a right to manage company (as defined in section 73 of the Commonhold and Leasehold Reform Act 2002) was able to acquire the right to manage more than one self-contained building or part of a building. Such companies, the court held, could only manage one self-contained building or part of a building.

Friday, 27 March 2015

UK: The Deregulation Act 2015

The Deregulation Bill received Royal Assent yesterday: see here. A copy of the new Act - the Deregulation Act 2015 - is available here (pdf). An explanatory memorandum has not yet been published but background information is available here. Some of the Act's provisions relate to company and insolvency law, in particular section 17 (Authorisation of insolvency practitioners), section 18 (Auditors ceasing to hold office) and section 19 (Insolvency and company law: miscellaneous).

Update (30 March 2015) - The Deregulation Act 2015 (Commencement No. 1 and Transitional and Saving Provisions) Order 2015 was made on 27 March: see here.

UK: On microscopes and telescopes - a speech by Andy Haldane

The Chief Economist of the Bank of England, Andy Haldane, delivered a speech today titled On microscopes and telescopes: see here (pdf). In his speech, Mr Haldane argues that complexity theory may be a useful lens through which to begin exploring the public policy questions that arise from the new architecture of macro-financial policy.

UK: The Small Business, Enterprise and Employment Act 2015

The Small Business, Enterprise and Employment Bill received Royal Assent yesterday: see here. A copy of the new Act - the Small Business, Enterprise and Employment Act 2015 - is available here (pdf). An explanatory memorandum for the Act is not yet available but fact sheets were published yesterday by the Department for Business, Innovation and Skills in order to provide more information about the changes being introduced: see here.

The fact sheet on company transparency, available here (pdf), contains information on the new register of significant control, the abolition of bearer shares and the provisions concerning corporate and shadow directors. The fact sheet on company filing requirements is available here (pdf) and the fact sheet on directors' disqualification and creditor compensation is available here (pdf).

UK: The Mutuals’ Deferred Shares Act 2015

The Mutuals’ Deferred Shares Bill received Royal Assent yesterday: see here. A copy of the new Act is available here or here (pdf). The Act gives the Treasury the power, through secondary legislation, to permit or facilitate the issue of deferred shares by a friendly society or mutual insurer. For further background information, see the briefing paper provided by the Commons Library and available here.

Thursday, 26 March 2015

UK: Women on boards 2015 - fourth annual report from Lord Davies and a new edition of Cranfield's Female FTSE Board report

Lord Davies of Abersoch has published the fourth annual review of women on boards, reporting on progress towards the 25% target set in his report published in 2011: see here (pdf). The headline figures for FTSE100 boards this month are: 23.5% women; 76.5% men. More specifically, within the FTSE100, 8.6% of executive directors and 28.5% of non-executive directors are women. There are no all-male boards in the FTSE100.

Lord Davies' report appeared on the same day as Cranfield University published its annual Female FTSE Board report: see here (pdf).

Wednesday, 25 March 2015

UK: The Companies (Disclosure of Address) (Amendment) Regulations 2015

The Companies (Disclosure of Address) (Amendment) Regulations 2015 were laid before Parliament yesterday and come into force on 30 June 2015: see here or here (pdf). An explanatory memorandum is available here (pdf). The purpose of the Regulations is to enable the Minister for the Cabinet Office to obtain the residential address of a director for the purposes of data matching under Schedule 9 of the Local Audit and Accountability Act 2014.

UK: FRC publishes 2015/16 budget and plan

The Financial Reporting Council has published its budget and plan for 2015/16, following an earlier consultation: see here (pdf). The priorities for the FRC include work on the following: supporting better engagement between boards and shareholders; helping smaller listed and AIM companies to improve the quality of their reporting; and reviewing how effective boards establish company culture and practices and embed good corporate behaviour.