Eckerle and Others v Wickeder Westfalenstahl Gmbh and Another: ChD 23 Jan 2013

By acting together, two shareholders had first refused the proposed dividend, and replaced the board. They then acquired fiurther shares and achieved a majority of more than 75%, sufficient to pass a special resolution, and proposed the cancellation of the company’s listing on the German Stock exchange, affecting the value of the remaining minority shares. Minority shareholders asked the court to reverse the de-listing decision and to order the purchase of their shares for a fair value. The majority shareholders now sought summary dismissal of the claims. The shareholdings were dematerialised and held as ‘Clearstream Interests’ and the defendants argued that on that basis the claimants did not hold the 5% of the shares necessary to make such an application.
Held: The application for summary dismissal of the claim succeeded. On its true construction, section 98 applied to the hoders of shares and not to holders of economic interests in shares: ‘a ‘shareholder’ or ‘the holder of a share’ (the terms are interchangeable) is one (and only one) whose name is registered in the register of members. There would in my view have to be an extremely strong reason to read the expression ‘the holders of not less in the aggregate than 5% in nominal value of the company’s issued share capital’ in a sense different from that indicated by the orthodox understanding of company law.’
Some of the claimants had originally voted for the resolution, and under section 98 were not permitted to seek the reveresal of the delisting.

Norris J
[2013] EWHC 68 (Ch), [2013] WLR(D) 24, [2014] BCC 1, [2014] 1 Ch 196, [2013] 3 WLR 1316
Bailii, WLRD
Companies Act 2006 97 98, Civil Procedure Rules 24
England and Wales
CitedNational Westminster Bank Plc and Another v Inland Revenue Commissioners HL 24-Jun-1994
Shares are allotted to a person when that person acquires an unconditional right to be entered on a company’s register of members. The issue of shares only becomes complete after they are registered in the company’s books for the purposes of the BES . .
CitedFarstad Supply As v Enviroco Ltd SC 5-May-2010
The defendants (E) were liable to F after a serious offshore accident, but sought a contribution from a third party (A), the main charterers, seeking to rely on section 3(2) o the 1940 Act saying that ‘if sued they might have been liable’. The court . .
CitedRe Astec (BSR) Plc ChD 1999
Jonathan Parker J said: ‘The concept of ‘legitimate expectation’ . . can have no place in the context of public listed companies . . Its introduction in that context would, as it seems to me, in all probability prove to be a recipe for chaos. If the . .

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Leading Case

Updated: 01 November 2021; Ref: scu.470529