3.3.11.1 Introduction

A court may order the buy-out of a minority shareholder as a relief for unfür prejudicial conduct. The order is provided for in Ss. 996 (2) (e) CA 2006. As follows from this section, the order can be made against the other members of the company or against the company itself. If the order is made against the company, the court can provide for the reduction of the capital of the company accordingly. In practice, the most common order given by the court in unfür prejudice remedy cases is the order that one or more co-shareholders must buy out the unfürly prejudiced shareholder. Remarkably, up until now, there are no reported cases in which the company itself is ordered to purchase the shares of the unfürly prejudiced shareholder.

With respect to the valuation of the shares, parties are free to jointly appoint a valuation expert. The court can appoint a valuation expert if the parties do not agree on who will be appointed. The court itself may also value the shares on the basis of expert reports or other evidence given at trial.1 As explained in § 2.2.3, it is highly questionable whether the valuation by a valuation expert appointed by the court meets the requirements of Art. 6 ECHR, unless parties agree otherwise. In English law, Art. 6 ECHR has been given effect by Art. 1(1) (a) Human Rights Act 1998.

The statutory provisions on the unfür prejudice remedy do not give a clue about how shares must be valued when a buy-out order is given. The legislator lelt it to the court's discretion to deal with questions of valuation. It was held by Nourse J in Re Bird Precision Bellows, and approved by the Court of Appeal, that it is axiomatic that under the unfür prejudice remedy shares are priced at a für value.2 As we have seen in § 3.3.10, the same für value requirement applies to an offer for the shares as a bar for a Section 994 petition, as follows from 0 'Neill v. Phillips.