Key Facts
- •Durnont Enterprises Limited (Durnont), holding 27.94% of Polish Real Estate Investment Limited (PREI)'s shares, brought derivative claims against PREI's directors and BNP Paribas Bank Polska SA (the Bank).
- •The claims alleged breaches of contract, fiduciary duty, and liability under Article 415 of the Polish Civil Code.
- •The alleged breaches stemmed from early repayment of bonds by M-JWK, a subsidiary seemingly controlled by Jaroszewicz family members, and a share purchase agreement (SPA) between the Bank and PSPT (controlled by Michael Jaroszewicz).
- •Durnont claimed these actions led to PREI losing assets worth over €100 million.
- •The lower court dismissed claims against the Bank, Czeremcha, and de Makay, finding no prima facie case.
Legal Principles
Permission to continue derivative claims requires a prima facie case that the company is entitled to relief and the action falls within the exception to the rule in Foss v. Harbottle.
Prudential Assurance Co Ltd v Newman Industries Ltd (No. 2) [1982] Ch 204
A prima facie case is a higher test than a seriously arguable case; it's a case that, without a defendant's answer, would merit judgment.
Abouraya v Sigmund [2014] EWHC 277 (Ch)
In derivative claims against overseas companies, common law principles apply, considering the totality of evidence.
CPR 19.17
Article 415 of the Polish Civil Code imposes liability for fault causing damage to another.
Expert evidence of Mr Pawel Moskwa
Pre-emption rights in company articles are triggered only when a shareholder has a contractual obligation to transfer shares in violation of those rights.
Re Sedgefield Steeplechase Co (1927) Ltd, Scotto v Petch [2000] 2 BCLC 211
An unsatisfied condition precedent prevents a purchaser from acquiring any proprietary interest in shares.
Re Coroin Ltd, McKillen v Misland (Cyprus) Investments Ltd [2012] EWHC 2343 (Ch)
A director's duty to act bona fide in a company's interests is subjective; the test is the director's honest belief, not objective correctness.
Regentcrest plc v Cohen [2001] 2 BCLC 80
Outcomes
Appeal dismissed.
The court found no prima facie case against the Bank, Czeremcha, or de Makay for breach of contract, fiduciary duty, or liability under Article 415 of the Polish Civil Code. The alleged breaches lacked sufficient evidence of causation and wrongdoing.