Addressing the Elephant in the room - Can a company be allowed to proceed with a suit when the board's authority is in serious dispute?
- ATLO
- Mar 15, 2024
- 1 min read
Imagine this.
Jack and Jill are shareholders. Jack has now taken over the company from Jill, and is using the company to sue Jill. Jill now questions the proprietary of Jack’s control over the company.
Can this be a ground for Jill to stay the company’s lawsuit against her? YES!
The High Court recently found that when the current board's authority to commence the suit is being seriously questioned, there is a necessity to stay the proceedings pending the resolution of such dispute.
To disallow the stay would not only be akin to condoning the potential abuse of process, but also ignoring the elephant in the room. In other words, the authority of the present board cannot be glossed over or taken at face value when it is overshadowed by such unresolved disputes.
Alex De Silva together with Joshua Lawson Cowie, as counsel, and [ATLO] Alvin Tang Law Office, as solicitors acted successfully for the 1st and 2nd Defendants in the stay application.
Read all about it here:
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