Litigation Update: Test Case On The Redemption Of Shares

Harneys has recently acted for a client in an important and novel case on the effect of a redemption notice, served by a company on a member, under the BVI Business Companies Act ("the Act"). The case will be of general interest in the context of the compulsory redemption of shares in BVI companies.

The case concerned section 176 of the Act which provides that the members of a company holding 90% of the voting shares may give a written instruction to the company directing the company to redeem the shares held by the remaining members. Upon receipt of the written instruction the company must redeem the shares of the remaining members and give notice to each member whose shares are to be redeemed stating a redemption price. Section 179 (1)(d) then states that a member is entitled to payment of the fair value for its shares upon dissenting from the redemption. The Act then sets out a mechanism for an