4.4.6 Relief

Remedies which are available by a s. 994 petition are laid down in s. 996. S. 996 (1) states the general guideline: wide discretion is vested in the court in granting relief. If the court is satisfied that a petition is well founded, it may make such order as it thinks fit for giving relief in respect of the matters complained of.1 Moreover, without prejudice to the general principle, 996 (2) lists a member of relief forms. The court may: regulate the conduct of the company's affairs in the future; require the company to refrain from doing or continuing an act; authorize civil proceedings to be brought in the name and on behalf of the company by such person or persons and on such terms as the court may direct; require the company not to make any, or any specified, alterations in its articles without the leave of the court; provide for the purchase of the shares of any members of the company by other members or by the company itself and, in the case of a purchase by the company itself, the reduction of the company's capital accordingly.2 The development in the UK severs the remedy from the remedy of winding up, but in practice, its equitable power enables the court to fashion any proper relief, including a winding up.3 And the court has enough discretion to impose precondition for the relief ordered.4 Generally speaking, from the viewpoints of forms of relief and equitable power to grant relief, the UK and US share the same practice and position.

The development of alternative relief other than winding up, and the preference for buyout originating in the UK have been adopted by the USA. The significance as well as rationale of the development was discussed in Chapter 3. It will not be repeated here. The most popular relief under the unfair prejudice remedy is a buy-out order.5 Generally, companies or majority shareholders are ordered to buy out the oppressed minority shareholders, and if the majority has already offered a fair value to the minority, the petition will be struck out by the court for the reason of abuse of procedure. However, if the petitions also concern facts of law, an offered made by the majority can not bar the seek of relief under this remedy.6 In appropriate circumstances, the court may also require the majority shareholders to sell their shares to the minorities if, for example, the majority shareholder has demonstrated that he is unfit to exercise control over the company because he does not allow access indispensable to the success of the business. Such a requirement does not necessarily mean that he is acting in bad faith or that he has failed to draw a proper distinction between personal interests and the company's affairs.7 The petitioner 's financial power to compel a buyout is also a consideration.