Tuesday, 7 June 2016
His Honour Deemster Doyle (First Deemster and Clerk of the Rolls), sitting in the High Court of Justice, gave judgment at the end of May in Gulf Hibiscus Limited v Lime Petroleum Plc (Ord, 2016/1): see here (part 1 of 2) and here (part 2 of 2). This is an important decision concerning derivative actions under the regime introduction by the Isle of Man Companies Act 2006 (pdf) and the Rules of the High Court of Justice 2009. Deemster Doyle refused a shareholder's claim to bring a derivative action under section 175 of the 2006 Act and in doing so considered the meaning and operation of those factors the court is required to take into account in exercising its discretion (including, for example, whether the shareholder was acting in good faith). Reference was made to authorities from England and also to a couple of recent decisions from the Eastern Caribbean Supreme Court, Deemster Doyle noting that Tynwald had appeared to follow British Virgin Islands legislation - section 184C of the BVI Business Companies Act 2004 - rather than English legislation in respect of derivative actions brought on behalf of companies formed or re-registered under the Companies Act 2006.