The Duomatic principle, that anything a company’s members could do by formal resolution they could also do informally if they all assented to it, does not apply where the transaction would be ultra vires: Satyam Enterprises Ltd v Burton (2021) EWCA Civ 287.
Companies
February 25th, 2021 by James Goudie KC in Capital Finance and CompaniesIn Byers v Chen (2021) UKPC 4 the Privy Council affirmed, at paras 64/65, the Duomatic principle, that, where it can be shown that all shareholders who have a right to attend and vote at a general meeting of the company assent to some matter which a general meeting of the company could carry into effect, that assent is as binding as a resolution in general meeting would be. The Privy Council also affirmed, at paras 68/69, that a director who has given the company proper notice of his or her resignation is not entitled to withdraw that notice, save with the consent of the company or possibly the ultimate beneficial owner.
Company Directors
February 9th, 2021 by James Goudie KC in Capital Finance and CompaniesOn disclosure by the director of a company of a conflict of interest, see Fairford Water Ski Club Ltd v Cohoon (2021) EWCA Civ 143. The disclosable interest may be of any kind, direct or indirect : para 43. What is then required is a clear declaration of the interest : para 45.
State Aid
December 29th, 2020 by James Goudie KC in Capital Finance and CompaniesThe Brexit deal agreement is accompanied by Declarations. These include a non-binding Joint Declaration of the UK and the EU on Subsidy Control Policies. These are described as “ guidance”. They may be “ taken into consideration” in the respective systems of subsidy controls.
The guidance is concerned with subsidies for (1) the development of disadvantaged and deprived areas or regions, (2) transport, and (3) research and development.
When determining the amount of subsidy for such areas, there may be taken into account (1) the socio-economic situation of the area, (2) the size of the beneficiary, and (3) the size of the investment project. However, (1) the beneficiary should provide its own “ substantial contribution” to the investment costs, and (2) the subsidy should not have as its “ main purpose or effect” to incentivise the beneficiary to transfer the same or a similar activity across borders.
Transport covers (1) airports, (2) roads, and (3) ports. Subsidies to road infrastructure projects may be granted if they are not designed “ selectively”, but provide benefits to society at large. It must be “ ensured” that open access to infrastructure is available to “ all” users on a “ on-discriminatory “ basis.
State Aid
December 29th, 2020 by James Goudie KC in Capital Finance and CompaniesThe UK will continue to have after 1 January 2021 a subsidy control system that will be legally enforceable. The subsidy provisions in the 1246 pages Brexit deal are however weaker than the EU’s initial proposals. These had been for the UK to align with EU state aid law. They are nonetheless stronger than the provisions of the EU’s free trade agreements with Canada and Japan. Indeed, many of the definitions and principles in the Brexit deal are similar to the EU State Aid system. There are features that the UK’s subsidy control system must include.
The Brexit deal sets out a definition of a subsidy, basically selective advantage, a list of common principles, and exemptions from prohibitions. The deal also addresses enforcement. There will have to be a Court or Tribunal for subsidy cases, and specified common remedies for breach, including recovery of a payment.
State Aid during Covid-19
July 8th, 2020 by James Goudie KC in Capital Finance and CompaniesBrexit notwithstanding, the UK remains subject to the EU State Aid regime administered by the EU Commission. On 19 March 2020 the Commission adopted a “ Temporary Framework “ for State Aid measures to support the economy during Covid-19 (the TF). The TF was amended on 3 April and 8 May 2020. A feature of the TF was that aid was not available for undertakings already in financial difficulty by 31 December 2019.
State Aid
May 13th, 2020 by James Goudie KC in Capital Finance and CompaniesCase T-8/18, easy jet Airline Co Ltd v EU Commission, General Court Judgment, about airports in Sardinia, addresses a range of features of State Aid law, including state resources, selective advantage, distortion of competition, affecting trade between member states, and compatibility with the internal market, and, from para 169, especially at paras 185, 200-203, 212 and 218, the Market Economy Operator Principle.