Liquidation and the remedy of unfair prejudice in the BVI

Introduction

Minority shareholder rights in the British Virgin Islands are codified under section 184I of the BVI Business Companies Act 2004 (as amended) (the BCA). Under this section, minority shareholders of BVI incorporated entities can petition the BVI court for redress in circumstances where they feel that the affairs of the company are being conducted in a manner that is unfairly prejudicial to them. Under this section, the BVI court enjoys a wide discretion to protect and provide relief to minority shareholders who make out their allegations of oppressive conduct against the company and those in control of it.

Ordinarily, the rights that shareholders enjoy are governed by the terms on which they associate[1]. However, the imbalance of voting powers often leads to the controlling majority meting out conduct that is prejudicial to the rights of minority shareholders; the court is concerned with offering relief in these circumstances.

In Yao Juan v Kwok Kin Kwok & Crown Treasure [2022] UKPC 52, the Privy Council considered the classic elements of a claim for unfair prejudice under BVI law and what was the appropriate remedy.

[1] Joffe V, Minority Shareholders: law Practice and Procedure (5^th edn Oxford University Press 2015)

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