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Court of Appeal to determine whether interim payment regime applies to Cayman share valuation proceedings

In the matter of Qunar Cayman Islands Limited, the company (represented by Harneys) has obtained leave to appeal, and a stay pending appeal, of an interim payment order made against it on the application of a dissenting shareholder group.

After the Grand Court’s decision in Blackwell Partners LLC & Ors v. Qihoo 360, it appeared settled that the interim payment regime in the Grand Court Rules did apply to proceedings under section 238 of the Companies Law (being the statutory mechanism by which a shareholder may dissent from a merger or consolidation, reject the compensation being offered for its shares, and have the value of its shares determined by the Court instead). In Qunar, the company argued that the interim payment regime did not apply to section 238 proceedings upon a proper construction of both the Rules and the Companies Law. In short, the company argued that:

  • A dissenting shareholder does not obtain a monetary judgment in a section 238 proceeding (being the threshold requirement of the interim payment regime) – the only remedy to which it is entitled is a declaration as to fair value; and
  • Otherwise, that the regime is inconsistent with the self-contained and unique nature of section 238.

The Judge expressed sympathy with the company’s arguments, however felt bound to follow the decision in Qihoo pursuant to the common law principle that judges of the same court should speak with one voice unless one judge is convinced the other was wrong. Qunar will be the first opportunity the Court of Appeal has to consider and provide guidance the construction of section 238.

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