Wednesday, 16 November 2016
A shareholder seeking relief for unfair prejudice under section 994 of the Companies Act 2006 (the unfair prejudice remedy) need not come to the court with "clean hands". To put this another way: misconduct by the petitioning shareholder does not preclude their petitioning for relief. This said, where a case of unfairly prejudicial conduct is successfully established, the court's willingness to grant an order for relief under section 996 is likely be influenced by the petitioning shareholder's behaviour. This is well illustrated by a decision of Mr Justice Morgan, handed down yesterday - Interactive Technology Corporation Ltd v Ferster & Ors  EWHC 2896 (Ch) - in which no relief under section 996 was granted to the petitioning shareholder, notwithstanding a finding of unfair prejudice. The petitioning shareholder's misconduct was, in the judge's opinion, "many times graver" than that of the other parties.