Commercial Law Cases

Credit Suisse International v Stitching Vestia Groep

A party generally cannot avoid contractual obligations by claiming a lack of internal capacity or authority after entering the contract, especially when the other party relied on its representations.

Credit Suisse International v Stitching Vestia Groep

Significance:

-limits on the powers of public/social entities

-parties cannot avoid contracts by claiming lack of capacity

-importance of certainty in financial markets

Freeman and Lockyer v Buckhurst Park Properties

Indoor Management Rule: Protects bona fide outsiders from internal procedural irregularities

Distinguishing Rama Corp: Contractors can rely on apparent/ostensible authority even without specific inspection of the AOA.

Freeman and Lockyer v Buckhurst Park Properties

This case introduced the Diplock LJ's four conditions:

1) Representation

2)Authority of the representation

3)Inducement

4)Capacity

Moir v Duff & Co

If contractual/articles provisions are independent, one can survive even if the other is illegal. (severability)

Moir v Duff & Co

Significance: Refusal clauses in AOA are highly protected by the court, even if the questioned article is poorly drafted or legally impossible.

Moir v Duff & Co

Dissent: Lord Moncreiff thought Art. 12 and 14 were "one & indivisible". He also believed it was unfair to apply the new rules to a case that had already started 4 days before these rules were confirmed.

Muirhead v Forth and North Sea

Contractual incorporation can make a rule binding independently from its corporate validity (e.g. internal procedural defect).

Muirhead v Forth and North Sea

Commercial law principles:

1)Incorporation by reference

2)Contract Sanctity

3)Commercial Certainty

Sembcorp Marine Ltd v PPL Holdings

The JVA suggested 50/50 governance. Court of Appeal treated the JVA as context dependent. Shareholding changed and therefore the condition did not hold. While ownership and control are generally separate, in this case a change in shareholding resulted in a shift in the control.

Bennington Sugar Refineries Co. v Thomson's Trustees

A company's articles may impliedly authorize a share buyback where it is necessary to make transfer restrictions workable and avoid SHs being locked in.

Procedural irregularities may be cured by shareholder ratification as the transaction involved "physiological" business risk, not illegal capital reduction.

Bennington Sugar Refineries Co. v Thomson's Trustees

Significance: Shares remain freely traceable, a core principal of modern capital market regulations and MIFID frameworks.

Sembcorp Marine Ltd v PPL Holdings

Courts do not imply terms into contracts unless necessary for business efficacy or obviousness.

Stewart v James Keiller & Sons, Limited

The refusal was not dishonest.

The valuation of 20 was not found to be dishonest and the court cannot replace a genuine directors' valuation with their own.

Art. 37 does not apply due to the legal form of the share transfer.

Stewart v James Keiller & Sons, Limited

Dissent: The refusal was retaliation. The valuation was self-dealing (COI). Would have ruled in Mrs. Stewart's favour. Modern law would likely agree.

Stewart v James Keiller & Sons, Limited

Significance:

1) Directors cannot use their power however they like.

2) Courts do not run companies.

3) How you receive shares determines your legal rights.

4) The dissent points to a real problem.