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Published on December 14, 2023
Court of Appeal hands down judgment in Ntzegkoutanis v Kimionis (Re Coinomi)

The Court of Appeal has handed down its judgment in Ntzegkoutanis v Kimionis [2023] EWCA Civ 1480.

Tim Elliss, Jonas Habert, Alex Jenkins and Maria Boutovitskai of Enyo Law LLP acted for the successful Appellant.

James Mather of Serle Court was instructed by Enyo Law LLP.

The appeal, arising in a shareholder dispute concerning a cryptocurrency business, raised the issue of the relationship between the unfair prejudice remedy and the derivative claim and in particular when it is legitimate for an unfair prejudice petition to claim relief in favour of the company to which the petition relates. The Court of Appeal held that, contrary to a suggestion made in the Hong Kong Court of Final Appeal in Re Chime Corp Ltd, the position under English law is not that only in a rare and exceptional case will relief be permitted to be sought by way of an unfair prejudice petition which could otherwise be sought by way of a derivative claim. In the present case, where the petitioner alleged that the respondent shareholder had stripped the company’s assets, he had a genuine interest in seeking reconstitution of misappropriated assets and damages for the company alongside other relief and in consequence the petition was not abusive. The Court of Appeal also rejected an argument that, whatever the common law position, the provision made by the Companies Act 2006 for derivative claims precluded the seeking of corporate relief within a petition, although Snowden LJ reached a different conclusion from the majority (Newey LJ and Whipple LJ) on how the 2006 Act provisions apply in this area.

The case contains important clarification of the law on the relationship between unfair prejudice petitions and derivative claims and reviews the numerous recent authorities touching on this question.

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