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§ 3. Unfair infringement of interests minoritarnyh participants of the private company in the Great Britain

Despite the fact that what the Great Britain is the country of system of a general law, its approach to protection minoritariev the private companies from oppression from the majority participant developed not under the influence of the tendencies designated in the USA, and, on the contrary, in original enough image.

Thus evolution of ways of protection minoritariev has affected not only judiciary practice, but also perfection of the English statute law in the given area. Long time, including under the influence of the well-known business v. Harbottle1 ^ [289], in English judiciary practice was not given due attention to interests minoritariev. However since 70th years of XX century the approach of the English

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Vessels to protection minoritarnyh shareholders has essentially changed [290].

In 1948 the Law on the companies which allocated shareholders with the right to demand from court has been passed to apply one of ways of protection under the equity law if they prove, that company affairs are led in such a manner that oppress some participants компании291. However in practice this position had the limited application as the House of Lords in business Scottish Co-operative Wholesale v. Meyer192 has interpreted concept «oppressing (oppressive) behaviour» as burdensome, rough and wrongful. Such interpretation has caused the additional questions connected by that should be understood under wrongful поведением293.

The explanation of these questions has been given in 1962 by the Committee specially created for perfection of the Law on the companies (Jenkins Committee on Company Law), and with a view of the definitive permission of the given problem it was recommended to use concept “unfairly prejudicial” 294 which has as a result received fastening in editions of the Law on the companies of 1980 Then this concept has been kept in the subsequent edition of the Law (item 459 of the Law on the companies of 1985) and (item 994 295) contains in the operating English Law on the companies of 2006.

According to item 994 (1) of the Law on the companies of 2006 the participant of the company can address in court with the claim, if:

(a) Company affairs are led or led in such a manner that unfairly infringe upon interests of participants of the company as a whole or interests of separate participants (including at least the claimant); or

(b) The perfect or prospective act or omission of the company (including act or omission from her name) is or will be unfairly infringing interests of the specified persons. [291 [292] [293] [294] [295]

As follows from specified article, the claim can move as in connection with infringement which takes place at the moment of claim giving, and in connection with infringement which has been made in the past or can be made in the future, i.e. at the moment of claim giving there is a serious threat such нарушения290.

Concept interpretation “unfairly prejudicial” was repeatedly given in judiciary practice. One of popular interpretations of the given concept has been given by judge Slejd [296 [297] and further is supported by judge Nors in business Re RA Noble (Clothing) Ltd.

[298]: «not limiting possible wide interpretation of the given concept which can cover and other situations, the participant of the company can submit the claim on the basis of item 75 of the Law on the companies 1980 [299] if it can prove, that cost of its participation in the company has seriously decreased or at least is exposed to such risk as a result of actions of the person supervising activity of the company that is unfair in relation to this participant» [300].

The court in the given case has paid attention that the criterion of injustice applied to behaviour of supervising participant, should be objective: it should not mean intention proving to harm interests of the applicant or unconscientiousness of the supervising participant. The objective test can consist in an estimation of consequences of behaviour of the supervising person about, whether infringe upon such consequences in the unfair image interests minoritarnyh participants; thus the estimation should be carried out how if she was spent by any passer-by (by-stander) [301].

In business Re Saul D Harrison and Sons plc302 the court has specified, that the concept “unfairly prejudicial” is enough general and should be applied flexibly, proceeding from circumstances of concrete business. Thus the behaviour of the respondent should answer two criteria simultaneously: to be “prejudicial", i.e. to restrain in any image interest of the claimant or to damnify it, and to be “unfair”, i.e. to do an injustice. If the behaviour satisfies only to one criterion the given institute cannot применяться303. Thus courts also notice, that that is fair in a context of the public company, can do an injustice in a context family компании304.

It is necessary to recognise, that the concept “unfairly prejudicial" («unfairly infringing interests») is not less abstract, than the concept “oppressive” ("oppressing"), therefore a step to legislation development has been connected not only with the given specification. If earlier it was required to prove lasting character of oppressing behaviour and its presence at the moment of the reference with the claim now was fulfilment or at least threat of fulfilment of single action or бездействия305 enough.

As a result with inclusion in the concept law “unfairly prejudicial" the approach of vessels to protection of interests minoritariev became more flexible. It is possible to be convinced of it, having addressed to texts of decisions which were accepted right after data legislative изменений306. Now courts did not demand from the applicant of proofs of evil intention or unconscientiousness of the majority participant or other supervising person. It was not necessary to prove infringements of the rights given by the Law on the companies, - was to prove only unfair infringement of interests миноритария307 enough.

Also at an estimation of behaviour of the participant the court should consider its interests which sometimes are outside of the borders outlined by the law [302 [303] [304] [305] [306] [307]

Or the charter компании308. In one of affairs (Re a Company (No. 00477 of 1986) 309) the court, giving interpretation to concept «unfairly infringing interests of the participant», has specified, that the rights and interests of the participant should be unessentially limited by positions of the charter of the company - they can include also the proved expectations connected, in particular, with employment of a post of the director during term of participation in business. Hence, discharge of the participant from a post under such circumstances should admit unfairly infringing its interests.

Thereupon there is an uneasy question on a parity of positions of the charter of the company and expectations or arrangements of the parties which for any reasons have not received in it reflexion. On the one hand, the institute “unfair prejudice” urged to provide execution to the full all arrangements which have been reached between the parties in the beginning of their cooperation. On the other hand, the given institute should not be used to change these договоренности310.

In business V. Phillips311 the House of Lords had for the first time a possibility to define concept border “unfair prejudice" "312. However for [308 [309] [310] [311] [312] explanations of the approach of English vessels to use of criterion of justice in the corporate right not so much outcome of the given case, how many the argument of the House of Lords given in it is interesting. The court has paid attention, that it is necessary to consider two circumstances: on the one hand, the company is association of persons for achievement of certain economic targets so, certain level of formalisation (the arrangement of participants should be observed should contain in the charter or the agreement); on the other hand, the company has occurred from association which is regulated by the equity law as the contract based on kind conscience. The account of the first circumstance leads to a conclusion that complaints to injustice are not supposed until there is no breach of contract of participants concerning company business management. From the second that in some cases strict observance of positions of the law can lead to unfair result follows. Injustice can consist in infringement of rules or in their use by the way contradicting a principle of conscientiousness. Further the court has specified, that it is necessary to find balance between freedom of the judicial discretion and a principle of legal definiteness [313].

The court also has considered, that not only infringement of expectations and promises should be considered as unfair behaviour agrees item 459 of the Law on the companies [314]. For example, the impossibility of achievement of the purpose of the company for the sake of which it is created, also can become the basis for application of given article as under such circumstances would do an injustice if one of the parties continued to insist on business continuation. Injustice unessentially should follow from the positive agreement of the parties, and can consist in use mazhoritariem the powers in such a manner that minoritary never would disagree on similar use [315].

Apparently from the spent analysis, in the Great Britain, as well as to the USA, courts in many respects are guided by reasonable expectations of shareholders for definition of behaviour which infringes in the unfair image upon interests of the participant of the company. According to the given approach, the court looks for the limits outlined by the charter of the company, trying to establish fundamental arrangements of participants concerning a business dealing order. The court can carry participation of both participants of the company in a business management, reception of dividends or business dealing to such arrangements definitely [316].

Thereupon there is a question: whether the given institute only should be applied when implied agreement between the parties, concluded by means of the promise, behaviour, reasonable expectations or otherwise is broken, or the sphere of its action is wider? In the majority of English precedents courts nevertheless come to conclusion about wider understanding of institute “unfair prejudice” So, in one of affairs the court has specified, that relations of the parties are much more diverse also unfair infringement of interests can arise in a situation which the parties and at all have not provided and did not expect in the arrangements or expectations [317].

The unfair infringement of interests minoritarnogo can be found out the participant in affairs, when: 1) the supervising participant discharged minoritarija of participation in management of the company [318]; 2) one of participants made serious abusings during management of the company [319]; 3) the participant wrongfully used actives of the company or has made waste of money resources of the company [320]; 4) the participant has appropriated the essential of profit of the company [321]; 5) in the company dividends in the reasonable size were not meted; 6) additional actions or the rights that has led to share washing out minoritarija were issued; 7) the overestimated compensations or bonuses [322] were paid.

Apparently from the listed categories of the affairs, the given institute is crossed with institute of the derivative or indirect claim when the shareholder files action in interests of the company in connection with infringement by the director of the fiduciary duties assigned to it. Thus infringement of fiduciary duties by the director in itself is not a case of unfair infringement of interests minoritarnogo the participant of the company, however the unfair infringement of interests of the participant [323] can be a consequence of such infringement.

In three affairs resolved in 1986 [324], judge Hoffman has come to conclusion, that infringements of fiduciary duties can become the basis for finding of fact of unfair infringement of interests minoritariev (“unfair prejudice ’") in the private or small companies. The court unequivocally recognised, that even if there are bases for a reference to the court with the indirect claim, it cannot be an obstacle for the reference with the statement under item 459 of the Law on the companies 1985 [325]

However in judiciary practice some restrictions have been designated also. So, simple infringement by the director of the duty to show due care (duty of care) will not admit unfair infringement of interests minoritariev. Thus in case of rough and constant abusings during management of the company (for example when the majority participant in the interests insists on preservation as a member of the family despite its absolute incompetence) unfair injury to interests of the participant can be established [326].

Discharge minoritarija from management is the basis for application of the given institute in a context of kvazi-associations as in them it is supposed more often, that all participants of the company will accept active participation in a business management, however this position can be not reflected in the charter of the company or the agreement of shareholders [327]. Minoritarii can not receive protection if they have been discharged of management in connection with their actus reus or for other reason which is worthy as then such discharge will not be unfair. However in any case the court makes the decision proceeding from concrete circumstances of business [328].

The question on, whether is neraspredelenie dividends in the reasonable size the cause of action from unfair injury to interests minoritarnogo the participant, also completely depends on business actual facts. Idle time neraspredelenie dividends even if it lasts some years, is not the basis for such claim. However neraspredelenie dividends or payment of unreasonably low dividends in a situation when the company presumes their payment in the considerable size, can become the cause of action. Also if directors at all do not consider a question on distribution of dividends or is artificial underestimate their size of dividends to use company's resources for financing of the compensations, most likely, there are bases to consider such behaviour infringing interests minoritarnyh participants of the company [329].

Release by directors of additional actions, especially in a situation when it has been made secretly or maliciously for the purpose of share washing out minoritarnogo the participant, too can be the basis for giving of the claim from unfair infringement of interests of the participant of the company. In one of affairs [330] director who was also the majority participant of the company, not having notified the claimant, has secretly let out additional actions to own advantage and has washed away a share of the claimant with 40 to 4 %. The judge named this case a scandalous example of unfair infringement of interests minoritarija, having noticed, that economic feasibility of similar increase in the capital of the company if minoritarnomu possibility to participate in it [331] has not been given the participant has no value.

Despite the fact that what the norm of item 994 of the Law on the companies of 2006 is formulated by the general image, actually it practically is not applied concerning the public companies which actions have undergone listing procedure at a stock exchange. It is connected by that the category of reasonable expectations of participants is inapplicable concerning the companies which actions bargain at a stock exchange [332], and, besides, most often awarded way of protection - the repayment of actions of the claimant - also has no essential practical value in a context of the public company as actions minoritarija can be always sold in the market. Besides, the decision of problems of oppression minoritarnyh shareholders in the public companies is promoted by action of mechanisms of the open market, and also the control from a regulator.

The given conclusion also proves to be true the statistics resulted in the monography of professor Bojlja: from 156 claims submitted to 1994-1995 in High court of London on the basis of norm of the law on unfair infringement of interests minoritariev (unfair prejudice), 96 % concerned the private companies, thus 85 % of such private companies had to five shareholders [333]. Thereupon the Commission which developed amendments to the Law on the companies, even has prepared special positions of the Law for the small private companies with number of participants from two to five, discharges concerning cases minoritarnogo the participant from management. However subsequently has been decided not to accept such special positions as minoritarnye shareholders of the private companies are effectively enough protected by means of the general mechanism, and occurrence more the special provision would lead to partial duplication of institutes [334].

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A source: Boyko Tatyana Stanislavovna. PROTECTION OF THE RIGHTS AND INTERESTS MINORITARNYH OF PARTICIPANTS OF NOT PUBLIC SOCIETY IN THE RIGHT OF RUSSIA, THE USA AND The Great Britain. The dissertation on competition of a scientific degree of the master of laws. Moscow 2017. 2017

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