Oppression remedy

In corporate law in Commonwealth countries, an oppression remedy is a statutory right available to oppressed shareholders. It empowers the shareholders to bring an action against the corporation in which they own shares when the conduct of the company has an effect that is oppressive, unfairly prejudicial, or unfairly disregards the interests of a shareholder. It was introduced in response to Foss v Harbottle, which had held that where a company's actions were ratified by a majority of the shareholders, the courts will not generally interfere.

It has been widely copied in companies legislation throughout the Commonwealth, including:

The Companies Ordinance of Hong Kong also contains similar provisions.

An oppression remedy, intended to operate as an alternative to winding up a company, was adopted as s. 210 of the Companies Act 1948, which declared:

210. (1) Any member of a company who complains that the affairs of the company are being conducted in a manner oppressive to some part of the members (including himself) or, in a case falling within [s. 169(3)], the Board of Trade, may make an application to the court by petition for an order under this section.

In the Companies Act 2006, the relevant provision is expressed in s. 994 (and the Secretary of State has similar authority under s. 995):

994. (1) A member of a company may apply to the court by petition for an order under this Part on the ground—

Conduct that is considered to constitute "unfair prejudice" has been given a broad interpretation, which can include:

The conduct is not confined to a specific group. In Re HR Harmer Ltd, Jenkins LJ noted that the definition is "wide enough to cover oppression by anyone who is taking part in the conduct of the affairs of the company whether de facto or de jure." Therefore, it can cover the actions of:

Provisions similar to s. 210 of the 1948 UK Act were first introduced into Canadian law through the 1975 passage of the Canada Business Corporations Act. It incorporated recommendations made in 1962 by the UK Jenkins Committee on Company Law for removing the linkage of the remedy with that of winding-up and for broadening its scope. Most provinces later adopted similar provisions.

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