Re Dragon Capital Ltd (Shrimpton and anr v Scriven and ors)


BVI HC (COM) 2014/0171


15 Jun 2016


High Court, British Virgin Islands


Robin Hollington QC and Adrian Pay are instructed for the Petitioners in a claim under section 184I BVI Business Companies Act 2004 to have their shares in Dragon Capital Ltd (‘the Company’) bought. The Company is a large Vietnamese investment fund, of which Mr Shrimpton, the First Petitioner, was the co-founder. Mr Shrimpton owns approximately 35% of the issued shares (personally and through a company, the Second Petitioner). Mr Shrimpton claims, inter alia, that he was unfairly excluded from management.

Mr Shrimpton claims that the Company was, from its inception, a quasi-partnership between him and Mr Scrivener, the co-founder, subject to equitable understandings, including a right to participate in management. A number of Vietnamese individuals subsequently became partners, but with their shareholdings held indirectly by Mr Shrimpton and Mr Scrivener.

Some time thereafter, the International Finance Corporation (part of the World Bank) (‘IFC’) and Promotion et Participation pour la Cooperation Economique (‘Proparco’) acquired shareholdings, at which time formal shareholders’ agreements were executed. The Vietnamese partners did not execute the shareholders’ agreements.

The Company, which had taken an active stance in the proceedings and filed a Defence which inter alia denied the existence of a quasi-partnership, applied for declarations (1) that the Company had been and remained entitled to be an active defendant in the proceedings; and (2) to sanction the costs already incurred and to be incurred by the Company in defending the proceedings.

The Judge examined the authorities on participation by a company in unfair prejudice proceedings, including, in particular, Re A Company [1994] 2 BCLC 146, Power v Ekstein [2010] NSCWC 137, Trojan Equity Ltd v CMI Ltd (2011) 87 ACSR 144 and Annuity & Life Re & or v Full Apex (Holdings) Ltd [2012] SC (Bda) 73 Com.

The Judge dismissed the application, ordering the Company to pay the Petitioners’ costs. As to the Company’s entitlement to participate, there had been no application by the Petitioners to restrain it from doing so. The Company was free to participate if it chose to do so. As to the sanction of costs incurred or to be incurred, that was an issue for trial: it was quite impossible at this stage to determine whether historic and proposed participation by the Company would amount to a misfeasance on the part of the directors causing it do so.

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