Ehi Car Services Limited (the Company) sought directions, similar to those that were sought by JA Solar in a directions hearing on 18 July 2019, which departed from the ‘standard-form’ arguing that they operated in a way which was duplicative, unfair and disproportionately costly for the Company therefore inconsistent with the overriding objective for conduct of proceedings.

The Court concluded that there was no good reason to vary the directions as (i) the proceedings should not proceed on a working assumption that professional experts and attorneys have not conducted themselves in a reasonable and proportionate manner; and (ii) as long as the directions do not cause injustice, the ‘standard-form’ directions are useful and the best ‘starting point’.

1. The Court has inherent jurisdiction to compel a company incorporated in Cayman Islands to attend management meetings because the Company has submitted to or is otherwise subject to its jurisdiction. It determined that management meetings were in accordance with the overriding objective in achieving a fair outcome for the parties and was a crucial part of the information gathering process for the experts to obtain an understanding of the core issues efficiently. As the Court noted that the Company’s argument had been previously rejected on three occasions, it did not find any convincing reason that those decisions had been wrongly decided.
2. Experts should not be required to review data room material before submitting an information request because it is overly prescriptive and unworkable in practice. Again, the Court relied upon the working assumption that experts will act reasonably and proportionately due to their credibility and reputation being at risk.
3. It is not necessary for the submission of factual evidence to follow the end of the information request process as it is important for the experts to consider the commercial reality of the Company through factual evidence together with the data room material.
4. The categories of documents to be disclosed by the Dissenters should not be extended to include documents irrelevant to evidence of value such as an investigation into the characteristics and motivations for decisions and instructions by the Dissenters.
5. The Court will not interfere with the coordination by attorneys and counsels representing multiple dissenters.
6. The Company is responsible for disclosing the total number of shares that is subject to the valuation in the proceedings.

Given the heavily contested nature of section 238 litigation, it is likely the Court will continue to determine a myriad of issues. However, it would appear that unless there are special circumstances or reasons to justify a departure from the directions which have been previously decided in similar cases, the Court will be hesitant to depart from the ‘standard-form’ directions.