- Directors’ duties to disclose conflicts of interest (Fairford v Cohoon)
- What are the practical implications of this case?
- What was the background?
- Issues on appeal
- What did the court decide?
- Case details
Corporate analysis: The Court of Appeal held that there had been no breach of section 317 of the Companies Act 1985 (CA 1985) (now section 177 of the Companies Act 2006) (CA 2006) by Mr Cohoon. The nature of Mr Cohoon’s interest in Craig Cohoon Watersports (Watersports) had been sufficiently disclosed to Fairford Water Ski Club’s (the Club) directors before it entered into a management agreement with Watersports for the period 2007 to 2017. The Court of Appeal’s judgment provides helpful guidance on the proper interpretation of CA 1985, s 317 as well as its successor, CA 2006, s 177. The central question was whether the other directors were ‘fully informed of the real state of things’ at a point before the contract was finalised. The court’s judgment also gave an indication of the potential application of CA 2006, s 1157 to claims of this nature. Written by Hugh Sims QC and Katie Gibb, barristers, and Charlotte Mallin-Martin, pupil barrister, Guildhall Chambers.
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