The High Court said it would stay a shareholder dispute involving Colorman (Ireland) Limited only if the respondents undertook to provide the interim protection sought by applicant Gary Clarke. The court gave the parties an opportunity to consider the judgment and said it would hear any issues about the undertaking’s form. It did not state that a stay had yet been granted or refused.
Mr Justice Denis McDonald’s judgment, delivered on 11 July 2019, concerned the respondents’ application to stay proceedings so that the dispute could be decided by an independent expert under a 2000 shareholders’ agreement. The case was in the High Court Commercial List. The application followed proceedings Clarke brought on 16 May 2019, including an application for an interlocutory injunction.
Clarke alleged that the respondents negotiated with prospective purchaser Ryhall Limited without notifying him or offering their shares to him as he said the agreement required. He also alleged oppression or disregard of his interests under section 212 of the Companies Act 2014, and raised complaints about an exclusivity clause, a share valuation and the running of pre-emption deadlines. The respondents rejected his allegations. McDonald J stressed that he had heard no argument on the merits and could not assess the parties’ competing accounts at this stage.
The judge found that the expert clause was broad enough to cover disputes about the agreement and the company’s affairs, including the section 212 claim. He accepted that the clause’s silence on procedure and the factual disputes could make expert determination slower than the respondents suggested. The court proceedings were already under way, with detailed affidavits filed. Those factors weighed against a stay.
The countervailing concern was privacy. The judge considered that a public hearing could expose commercially sensitive information and harm the company and its shareholders. But the applicant’s injunction application could still proceed even if the substantive dispute were stayed, potentially bringing that information into open court.
The court therefore said a stay could be granted only if the respondents undertook to comply with the terms of the interim relief Clarke sought until the expert determined the dispute, or earlier decided that the relevant complaint was not legally maintainable. If they did not give that undertaking, the judge said the stay should be refused. The judgment left that choice, and the resulting order, pending.