Shareholders' reserve power: Implied terms and public policy

Shareholders' reserve power: Implied terms and public policy

Do shareholders have reserve or residual powers of management when the board is unable or unwilling to act? In Chan Siew Lee v TYC Investment Pte Ltd [2015] 5 SLR 409, the Singapore Court of Appeal answered this question in the affirmative. In so doing, the court employed a contractarian approach, r...

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Bibliographic Details
Main Author: LEE, Pey Woan
Format: text
Language:English
Published: Institutional Knowledge at Singapore Management University 2016
Subjects:
company law
shareholders' reserve power
division of power between management and shareholders
terms implied in corporate constitution
public policy
Asian Studies
Business Organizations Law
Commercial Law
Online Access:https://ink.library.smu.edu.sg/sol_research/2327
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Institution: Singapore Management University
Language: English
Description
Summary:Do shareholders have reserve or residual powers of management when the board is unable or unwilling to act? In Chan Siew Lee v TYC Investment Pte Ltd [2015] 5 SLR 409, the Singapore Court of Appeal answered this question in the affirmative. In so doing, the court employed a contractarian approach, rationalising the power as one that is conferred on shareholders by a term implied in the company’s constitution on the basis of necessity or business efficacy. But a closer review will demonstrate that the court’s analysis, despite its overt reliance on contractual principles, is ultimately of a hybrid nature that takes on board both contractual as well as public policy concerns. This approach aptly reflects the complex nature of the company’s internal workings and warns against a reductionist approach that tackles the issue from a monolithic (contractual) perspective.

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