A minority member in a company does not have much power to influence its management or any majority members and, therefore, sometimes their interests are disregarded. Should they need to protect their position, a minority member may do so in a number of ways, eg they may pursue a derivative claim, bring an unfair prejudice claim by petition or seek that the company be wound up. A minority member may also bring a claim against a director in their personal capacity, rather than as a director, where there are grounds to do so. This fundamentals note considers how a minority member may seek to protect their interest in a company by pursuing a derivative claim. For further information, see Practice Notes: Derivative claim—what it is and when to use it, Statutory derivative claim—the procedure, Common law derivative claim—the procedure and Derivative claims—key and illustrative decisions [Archived]. For information on the other procedures and remedies available to a minority member, see Practice Notes: Unfair prejudice claims—fundamentals and Just and equitable winding up—fundamentals. What is a minority member? There is no

ARCHIVED: This archived Practice Note summarises a number of key and/or illustrative decisions relevant to derivative claims, with particular focus on decisions dating from June 2019 until June 2025. It is intended to provide a broad sense of the diverse range of factual scenarios and issues which can arise in respect of such claims, with particular focus on decisions dating from 1 June 2019 onwards. It is not maintained and is for background information only. For further guidance on derivative claims, see Practice Notes: • Derivative claim—what it is and when to use it • Statutory derivative claim—the procedure • Common law derivative claim—the procedure Case details and analysis Judgment date Case summary Chancery Division Chimbganda v Kundodyiwa (Re Derivative Claim - Goodpeople Health Care Ltd) [2025] EWHC 1543 (Ch) 19 June 2025 This is an interesting decision where permission to continue a statutory derivative claim was granted despite the existence of (broadly overlapping) parallel unfair prejudice proceedings.The claimant and first defendant were equal shareholders and directors of Goodpeople Health

This Practice Note considers derivative claims. It provides a broad overview of common law and statutory derivative claims, with reference to CPR 19.14–CPR 19.20 and CPR PD 19A, as well as sections 260–264 of the Companies Act 2006 (CA 2006). In particular, it sets out the origins of derivative claims and when they might be used, with specific focus on who has standing to bring a statutory derivative claim and on which companies’ behalf they can be brought. Practitioners should note that the CPR provisions relevant to derivative claims were amended with effect from 6 April 2023. In particular, CPR 19 was revised and CPR PD 19C was amended and moved to become CPR PD 19A. Such changes did not materially impact the substance of the approach to derivative claims, but the numbering of relevant provisions was altered. Judgments which pre-date the amendments coming into force on 6 April 2023 may therefore include reference to the previous provisions and numbering. For further information, see: • LNB News 03/02/2023 9—Civil Procedure (Amendment) Rules 2023

Dispute Resolution analysis: The High Court granted extensive declaratory relief in favour of Dexia in connection with interest rate swap transactions entered into with the Comune di Torino. The judgment followed earlier summary judgment establishing that Torino’s Italian proceedings had been brought in breach of an exclusive English jurisdiction clause in the parties’ ISDA Master Agreement. At trial, Baker J considered Torino’s substantive challenges to the swaps, including alleged incapacity, invalidity under Italian law, breach of Italian regulatory duties, absence of authority, advisory duties, and claims for damages or restitution. The court held that the transactions were valid hedging arrangements, not speculative derivatives; that Torino had capacity and authority to enter into them; that no advisory relationship existed; that Torino had suffered no recoverable loss; and that Dexia was entitled to a contractual indemnity in respect of Torino’s commencement and pursuit of the Italian proceedings. The decision continues the English courts’ broadly consistent post-Cattolica approach of upholding ISDA-documented Italian municipal swaps where the transactions are genuine hedges linked to actual indebtedness.

Works, such as compilations and anthologies, that draw on other works. Other examples are books and articles quoting or summarising source material, such as in legal textbooks or a film being made from a book. Each of the original and derivative works has its own copyright.

Financial instruments, such as futures and options, whose value is derived from that of underlying securities.

What is a clearing house? The clearing obligation under the European Markets Infrastructure Regulation (EU) No 648/2012 (EU EMIR) and in the UK, under Assimilated Regulation (EU) 648/2012 (UK EMIR), refers to a requirement that all eligible derivatives be cleared through a central counterparty (CCP). CCPs are also known as clearing houses. For more information on the clearing obligation, see Practice Notes: EU EMIR—essentials—Clearing obligation and UK EMIR—essentials—Clearing obligation. A CCP is a market infrastructure designed to reduce and manage counterparty risk through clearing and settlement of transactions. Once a transaction has been agreed between two parties and registered with a CCP, the CCP inserts itself into the transaction to become the buyer to every seller and the seller to every buyer. The CCP nets transactions between members on a multilateral basis. This means that a payment due to the CCP from parties A and B can be netted off against payments due on the same day from the CCP to parties C and D. This produces much

What does this Practice Note cover? Over-the-counter (OTC) derivatives are a common feature in structured finance transactions and they can occur in a variety of different forms (eg swaps, options, and forwards). Derivatives in structured finance transactions are frequently used to convert the cash flows received by an issuer from the underlying asset pool into the cash flows it requires in order to meet its payment obligations in respect of the securities it has issued to fund that asset. This Practice Note explains some of the different types and uses of derivatives in structured finance transactions, including: • interest rate swaps • currency rate swaps • credit default swaps • credit linked notes, and • total return swaps Different types of entities, such as banks, investment firms or insurance companies, may act as swap counterparty in a structured finance transactions. This Practice Note also considers the specific structural features of derivatives in structured finance transaction, including: • the restriction on an issuer from engaging in any other business other than the issuance of notes—see ‘What restrictions

Banking & Finance analysis: What have been the key developments in the world of derivatives over the past six months?

What does this Practice Note cover? The International Swaps and Derivatives Association, Inc. (ISDA) is a trade association for participants in the derivatives industry. It has developed standard documentation for derivatives. The vast majority of over-the-counter (OTC) derivative transactions are documented using ISDA standard documentation. This Practice Note explains the key ISDA documents in a typical OTC derivatives transaction, their framework and how they interrelate. The key documents are: • master agreement • schedule • credit support document (only applicable if the parties require collateral or security to be provided), and • confirmation Documentation framework ISDA ISDA is a global association which represents participants in the international privately negotiated OTC derivatives market. Members of ISDA include derivatives dealers, corporations, law firms, among others. Its members are listed on the ISDA website. ISDA has produced standardised derivatives documentation. The benefits of having standardised documents are: • the time and cost involved to negotiate and agree derivative transactions is greatly reduced • increases liquidity (as it is cheaper and easier for parties to engage in repeat transactions), and

What does this Practice Note cover? It is not only banks and financial institutions that enter into derivative transactions. The types of entities seeking to enter into derivative transactions can vary widely from, for example, a company to a university. This raises the issue of a party's capacity to enter into derivative transactions. The legal issues relating to capacity in the context of derivatives are complex and require careful consideration. Parties will be concerned to ensure that the entity with which they are dealing (their counterparty) has capacity to enter into the derivative transaction because the consequences of lack of capacity may be that the contract is declared void from the outset as a result of it being ultra vires. This Practice Note explains: • the key issues to note when considering an entity's capacity to enter into a derivatives transaction from a general perspective • the key points to consider when looking at a signatory's authority to sign derivatives documentation, and • issues surrounding the most common types of counterparties where capacity and authority might be an

This Practice Note sets out certain key cases and associated analysis that is relevant to derivatives lawyers. The cases are divided by topic area and include: • Derivatives cases relating to capacity to enter into transactions • Derivatives cases relating to classification of swaps • Derivatives cases relating to wagering or gaming • Derivatives cases relating to constructing ISDA master agreements • Derivatives cases relating to payments and close-out amounts • Derivatives cases relating to disputes on jurisdiction • Derivatives cases relating to the mis-selling of derivatives or LIBOR manipulation • Derivatives cases relating to tax issues, and • Derivatives cases relating to regulatory issues Derivatives cases relating to capacity to enter into transactions Names of parties Judgment date Case summary Relevant analysis and articles Dexia SA v Comune di Torino [2026] EWHC 1401 (Comm) 18 June 2026 The High Court granted extensive declaratory relief in favour of Dexia in connection with interest rate swap transactions entered into with the Comune di Torino. The judgment followed earlier summary judgment establishing that Torino’s Italian proceedings