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ARTICLE · 22 SEPTEMBER 2022

Court Decision Highlights "Nominee" Director Issues

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Centerra Judge found the breaches of fiduciary duties the most egregious he had ever seen.

CanadaCorporate/Commercial Law
Gary Solway
Gary Solway
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Key Highlights

  • Centerra Judge found the breaches of fiduciary duties the most egregious he had ever seen.
  • Nominee director principles in Centerra are relevant to directors of corporations governed by the Canada Business Corporations Act.
  • Shareholders may need to establish rules of engagement for "nominee" directors.

The recent Ontario Superior Court of Justice decision in Centerra Gold Inc. v. Bolturuk1 [Centerra] reported on August 26, 2022, highlights important duties of "nominee" directors-directors who have been appointed by a specific shareholder or class of shareholders.

The judge found the breaches of fiduciary duties to be the most egregious breaches he had ever seen. The facts are unusual and involve the Kyrgyz Republic's takeover of a gold mine in that country owned by a Canadian public company. The Kyrgyz Republic held a substantial minority ownership stake in the Canadian company and, pursuant to a shareholders agreement, was entitled

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