Exploring The Relationship Between Unfair Prejudice & Derivative Proceedings

The often uncomfortable relationship between unfair prejudice and derivative claims was considered by the British Virgin Islands ("BVI") Court of Appeal in Andriy Malitiskiy et al v Oledo Petroleum Ltd¹.  The appellants wanted to bring both a derivative claim (in which they sought corporate remedies) and an unfair prejudice claim (in which they sought personal remedies as shareholders). 

The facts, in outline, were that the appellants each owned half of Oledo Petroleum Ltd ("Oledo"), a BVI company at the top of a chain of filling stations in the Ukraine.  A Mr Adamovsky owned the other half, and was the sole director of Oledo.  In 2009 the parties agreed to separate, and to sell Oledo's business.  This they did, for US$71.5m, but Adamovsky transferred the entire sum to an account in the name of his own company, leaving Oledo an empty shell.  In their unfair prejudice case, the appellants sought compensation for the diminution in value of their shares.  In their