A discussion on the provisions under article 402 of chapter 386, the Companies Act, in the context of the protection of minority shareholder rights with particular reference to article 402(3)(g)

Abstract

The object of this dissertation is to analyse the elements of the unfair prejudice remedy under Article 402 of the Maltese Companies Act and endeavour to thoroughly examine Article 402(3)(g), which provision regulates the order for dissolution and consequential winding up of the company in an unfair prejudice action. Reference will be made to relevant judgments in this area of law, both delivered by local courts, along with those delivered by UK courts. Firstly, the sources of Maltese company law within this sphere of minority shareholder protection will be evaluated. This exercise will be carried out by considering the position under UK law, New Zealand law and other Commonwealth jurisdictions. The Maltese Article 402 will then be analysed in terms of its relevant sub-articles and significant juridical points brought about through court decisions. An effort will be made to clarify the distinction between Article 214(2)(b)(iii) and Article 402(3)(g), commenting on where the provisions share similarities and where they diverge. Interim orders in the proceedings of an Article 402 action will also be examined and relevant recommendations will be drawn therefrom. The analysis of these aspects of an action under Article 402 are intended to contribute towards a more comprehensive understanding of the unfair prejudice remedy.