Tuesday, 8 February 2011

UK: Scotland: Court of Session considers Re Duomatic principle and directors' entitlement to remuneration

The Court of Session, Inner House, delivered its opinion in Tayplan Ltd v Smith [2011] CSIH 8 last week. The court was required to consider the legal principles regarding directors' entitlement to remuneration and the operation of the so-called Re Duomatic principle. With regard to the latter, Lord Brodie, delivering the opinion of the court, observed (para. [28]):

... if in fact all of the shareholders agree to a particular proposal which is honest and within the powers of the company it should be regarded as having been agreed to, even although assent is not signified by a formal vote in general meeting and even if assent is given by different parties at different times. But there must have been a proposal of which all parties were aware and it must have been agreed to".

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