This dispute concerned the construction of a statute relating to the rights of minority shareholders.
The Commercial Court determined the true construction of an Italian statute, introduced in 2003, in order to effect sweeping Italian company law reforms and to increase minority shareholder protections. This statute has been (and continues to be) the subject of extensive and conflicting Italian case law and academic writing.
The case is instructive in demonstrating the commercial approach taken by Courts in this jurisdiction towards interpreting legislation. The Claimant shareholder had exercised a statutory “exit” right to liquidate its shareholding in the defendant company in exchange for substantial (€64 million) compensation. The Court declined to permit the shareholder also to receive a dividend, which had been declared after the shareholder had exercised its statutory exit right, but before the process of liquidating its shares was complete. The Court held that payment of the dividend to the shareholder was inconsistent with the shareholder’s decision to exercise the statutory exit right and would result in overcompensation.
The case also illustrates the limitations of adducing expert evidence on foreign law. The Defendant submitted, essentially, that it was for the Court to construe the relevant Italian statute having regard to its text and the overall legislative scheme and purpose. The Claimant, nonetheless, adduced extensive expert evidence addressing the numerous conflicting Italian court decisions and academic commentary. After cross-examination, the Court concluded that this evidence was not of significant assistance.
The Commercial Court’s findings on the issue under consideration will be highly significant in Italy, where the scope and effect of the statutory minority protection regime continues to be the subject of extensive debate. The case also illustrates the ongoing popularity of the English Commercial Court as a forum of choice for international litigation.
Sonia Tolaney QC and James MacDonald appeared for the successful Defendant company (instructed by Cleary Gottlieb Steen & Hamilton LLP). The Judgment can be found here.
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