Aabar Holdings SARL v Glencore PLC & Ors
[2024] EWHC 3046 (Comm)
Various Claimants v G4S PLC
8 November 2023
[2023] EWHC 2863 (Ch)
High Court
Shareholders sued G4S, wanting to see G4S's secret lawyer documents. The judge said only shareholders officially registered at the time the secret documents were created could see them, and it was too late to decide this so close to trial. So the shareholders lost.
Key Facts
- •This is the third CMC in three sets of proceedings against G4S PLC under s.90A and Schedule 10A of the Financial Services and Markets Act 2000 (FSMA).
- •Claimants allege "Wrongful Billing" and "Financial Model Fraud" by G4S.
- •Claimants applied for disclosure of documents withheld by G4S on grounds of privilege, arguing the "shareholder principle" applies.
- •The application was made late, just before a six-week trial.
- •Claimants include registered shareholders and ultimate beneficial owners via CREST.
- •G4S argued the shareholder principle is anomalous, inapplicable to former/non-shareholders, and encompasses various privileges.
Legal Principles
Shareholder principle: A company cannot claim privilege against its shareholders except where documents were created in contemplation of or for the dominant purpose of proceedings between the company and its shareholders.
Sharp v Blank [2015] EWHC 2681 (Ch); Woodhouse and Co (Limited) v Woodhouse [1914] 30 TLR 559
Legal professional privilege is a fundamental substantive right, only overridable by legislation.
R v Derby Magistrates' Court [1996] AC 487; McE v Prison Service of Northern Ireland [2009] 1 AC 908; Three Rivers District Council and others v The Governor and Company of the Bank of England (No 6) [2005] 1 AC 610
In proceedings under s.90A FSMA, claimants must show at least one PDMR knew of or was reckless as to false statements.
Similar claims against Standard Chartered Plc (mentioned in judgment)
Outcomes
The Claimants' application for disclosure of privileged documents was dismissed.
The court found insufficient authority to extend the shareholder principle to non-registered shareholders. The late timing of the application created insurmountable practical difficulties for trial management.
The shareholder principle, while recognized, has a shaky foundation in light of modern corporate law.
The principle's basis (common fund, trustee-beneficiary analogy) is questionable given the separate legal personality of companies and shareholders’ lack of direct interest in company property.
The shareholder principle, if applicable, applies only to registered shareholders at the time the privileged documents were created.
Rights against a company typically attach to legal share ownership; statutory claims under s.90A FSMA don't automatically grant access to privileged documents.
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