Unfair prejudice petition—the procedure
Produced in partnership with Mark Hubbard of New Square Chambers

The following Dispute Resolution practice note produced in partnership with Mark Hubbard of New Square Chambers provides comprehensive and up to date legal information covering:

  • Unfair prejudice petition—the procedure
  • Preliminary considerations
  • Funding the litigation
  • Limitation
  • Pre-action conduct
  • Starting a claim and parties
  • How and where to start an unfair prejudice claim
  • Procedure
  • The petition
  • Alternative claim for just and equitable winding-up
  • More...

Unfair prejudice petition—the procedure

Coronavirus (COVID-19): The guidance detailing normal practice set out in this Practice Note may be affected by measures concerning process and procedure that have been introduced as a result of the coronavirus (COVID-19) pandemic. For further information, see Practice Notes:

  1. Coronavirus (COVID-19) implications for dispute resolution

  2. Coronavirus (COVID-19)—Changes to the court process in insolvency proceedings

Depending on the court in which your matter is proceeding, you may also need to be mindful of additional provisions—see further below.

For an overview on unfair prejudice petitions plus an illustration of the diverse range of factual scenarios and issues which can arise in respect of such claims, see Practice Notes:

  1. Unfair prejudice petition—what is it and when to use it

  2. Unfair prejudice petitions—key and illustrative decisions

Preliminary considerations

Funding the litigation

It is ‘a general principle of company law that a company’s funds should not be expended upon disputes between stakeholders’ (see para [63] of Koza Ltd v Koza Altin Isletmeleri AS).

As a result, neither the petitioner nor the majority may properly use the company’s assets to fund litigation under section 994 of the Companies Act 2006 (CA 2006) (at least without the consent of all shareholders). Misuse of the company’s assets to fund the defence of a claim (for example by making loans to the majority for this purpose) may in itself amount to unfair prejudice, as indicated by

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