Wednesday 29 April 2015

UK: Supreme Court decision in Olympic Airlines

The Supreme Court handed down its judgment today in Trustees of the Olympic Airlines SA Pension and Life Assurance Scheme v Olympic Airlines SA [2015] UKSC 27: see here or here (pdf). A summary of the decision is available here (pdf). Lord Sumption delivered the only reasoned judgment and dismissed the appeal (from [2013] EWCA Civ 643).

The court was required to consider what connection a foreign company should have with the United Kingdom in order to entitle an English court to wind it up where the company's centre of main interests was in another EU Member State. Lord Sumption said there needed to be a fixed place of business, with business activity consisting of dealings with third parties, and not merely acts of internal administration. In his Lordship's view, Olympic Airlines SA was not carrying on business activity at its head office on 20 July 2010 (the date when pension scheme trustees presented a winding-up petition in England) and did not therefore have an 'establishment' in the UK at that date. There was consequently no jurisdiction to make the winding-up order.

Ireland: implementing the new company law framework

The Companies Act 2014, which contains Ireland's new company law framework, became law last December: see here. The new framework will come into force on 1 June this year. Secondary legislation is now being made and the first Regulations - the Companies Act 2014 (Forms) Regulations 2015 - have been published on the Irish Statute Book website: see here (pdf). Further information about the Act and its implementation is available here.

Tuesday 28 April 2015

ICGN says stewardship does not benefit from differential ownership rights

The International Corporate Governance Network has today set out its opposition to differential ownership rights as a means of promoting stewardship: see here (pdf). According to the ICGN's viewpoint document, "...the introduction of differential ownership rights should be discouraged - even if the nominal intent to promote long-term thinking is a worthy one".

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).

Update (28 July 2015) - a new Bill, the Companies Bill 2015, has been introduced in the National Assembly: see here.

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).

Update - a copy of the new Act is available here (pdf).

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".