The Cayman Islands Court of Appeal has confirmed that a shareholder’s just and equitable winding-up petition does not need to advance a class remedy for the benefit of all shareholders as was previously held in Ctrip Investment Holding Ltd v eHi Car Services Limited.
In Ctrip, Justice Kawaley held that a petitioner cannot properly use a just and equitable winding-up petition to further its own commercial interests; it can only seek relief designed to vindicate the rights of shareholders generally. In addition, Justice Kawaley held the main purpose of eHi’s petition was quite obviously to advance a rival merger bid supported by the petitioner, not to advance the class interests of the shareholders on whose behalf the petitioner was meant to be representing.
The Court of Appeal in Tianrui (International) Holding Company Limited v China Shanshui Cement Group Limited essentially disagreed with Justice Kawaley that a shareholder petitioning on the just and equitable ground is meant to be representing the interests of the shareholders as a whole. The Court of Appeal accepted that if a creditor’s petition did not invoke a class remedy the petition may be an abuse of process, but doubted the same principle would apply in respect of a shareholder’s just and equitable petition. Lack of a class remedy, at most, may support an argument that the petition is brought for an improper purpose.
The Court of Appeal held that a shareholder’s petition will likely include complaints particular to that shareholder, which may not be relevant to other shareholders. A shareholder must be able to petition against acts of the company promoted by other shareholders, the remedy to which will clearly not seek to benefit those very shareholders behind those acts.
This is welcome clarification that shareholder-petitions brought on the just and equitable ground do not need to have the purpose of advancing a class remedy on behalf of all shareholders and failure to do so will not in and of itself result in a finding that the petition was brought for an improper collateral purpose and an abuse of the process of the Court.

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