UK: Scotland: the Takeover Code and enforcement by the court under the Companies Act 2006

Shortly before the end of last year, Lord Bannatayne, sitting in the Outer House of the Court of Session, delivered his opinion in The Panel on Takeovers and Mergers v King [2017] CSOH 156: see here (pdf). The opinion is an important one on the operation of section 955 ("Enforcement by the court") of the Companies Act 2006 and Rule 9 of the Takeover Code (the mandatory bid rule). Section 955 provides, on application by the Takeover Panel, that if the court is satisfied that a person has contravened a rule-based requirement or a disclosure requirement, the court "may make any order it thinks fit to secure compliance with the requirement". In respect of section 955, Lord Bannatayne stated (paras. [80] - [82]):

The intent of the provision clearly is to provide a means whereby the Panel can seek to have its decisions enforced. However, that does not mean that the court’s function is to act as no more than a rubberstamp ... The court I believe, in nearly all cases, if asked by the Panel to enforce its decision by granting an order will do so. However, there may be very rare cases where it may not do so. I do not believe that in holding that the court has discretion to refuse to pronounce an order, in what undoubtedly would be very exceptional circumstances, undermines the functioning of the Panel".