Company Law

Ofwono & Anor v African Cable Networks Ltd (HCT-00-CV-CI-0025 -2015) [2016] UGHCCD 21 (25 April 2016);

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This was a Company Cause brought by Petition under Section
248 (1) of the Companies Act of 2012 and Section 98 of the
Civil Procedure Act Cap. 71 seeking orders that: Court does
direct an Annual General Meeting of the Company to be
called to determine the remuneration of the directors,
operation and regulation of the company. That court makes
orders on the regulation and conduct of the Company’s
affairs/business or otherwise as shall be just.
Court considered whether the matters over which the
Petitioners complains in the Petition and the evidence in
support thereof can amount to a conduct of the affairs of the
Company in a manner which is unfairly prejudicial to them as
shareholders.
Court ruled that to constitute unfair prejudice the value or the

quality of the shareholder’s interest, that is his/her shares in
the Company limited by shares, must be adversely affected.
To invoke the principle of “unfair prejudice” two elements
must be present for one to succeed in a Petition under Section
248 and these are, the conduct must be prejudicial in the sense
of causing prejudice to the relevant interest of members or
some part of the members of the Company i.e. shareholders;
and it must also be unfair.
Court held that that the Petitioners’ shareholding in the
company came with the legitimate expectation of participation
in the management of the Company. Therefore, court found
that the affairs of the Respondent Company were conducted in
a manner unfairly prejudicial to the interests of the Petitioners
as shareholders/members.
Court accordingly allowed the petition and granted the
remedies that the petitioner sought for.

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