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Privy Council Rejects C&W Appeal

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The Privy Council recently upheld a decision in the matter Cable & Wireless Jamaica Ltd (Appellant) v Eric Jason Abrahams (Respondent) (Jamaica)– Appeal No 0080 of 2023. A win for minority shareholders.

Here is an AI assisted summary of the decision – Blogmaster

Privy Council Findings
  • Separate Class Required: Minority shareholders were being bought out, while majority shareholders (Liberty affiliates) retained their shares. The treatment under the scheme was so commercially dissimilar that they could not consult together with a view to a common interest. Therefore, separate class meetings were required.
  • Reduction of Capital Not Compliant: The scheme involved cancelling minority shares and issuing new ones to Liberty. This constituted a reduction of capital, which was not authorized under section 71 of the Jamaican Companies Act. CWJ failed to follow the statutory procedure for such a reduction.
  • No Jurisdiction to Sanction: Because the scheme was improperly constituted and the capital reduction was unauthorized, the court lacked jurisdiction to sanction it.
Conclusion

The Privy Council upheld the decisions of Batts J and the Jamaican Court of Appeal. The appeal was dismissed, and the scheme was not sanctioned.

This case reinforces the importance of correctly classifying shareholders in schemes of arrangement and complying strictly with statutory procedures for capital restructuring. Let me know if you’d like a breakdown of the implications for corporate governance or shareholder rights.

Link to Judgement – https://jcpc.uk/uploads/jcpc_2023_0080_judgment_234e456446.pdf

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7 responses to “Privy Council Rejects C&W Appeal”

  1. Terence Blackett Avatar
    Terence Blackett

    YOU WANT ARTIFICIAL INTELLIGENCE – HERE’S A SNIPET FROM MACHINE LEARNING THAT SCARES THE HEEBIE-JEEBIES OUT OF OTHER RACES – NO WONDER THEY ARE SAYING THAT AI CAN BE SO DANGEROUS: THEY DON’T KNOW THE HALF OF IT

  2. Terence Blackett Avatar
    Terence Blackett

    THE ALBINO-CENTRIC PALESKIN WORLD IS ON LIFE-SUPPORT & WILL SOON VANISH INTO THE PARTICULATE DUST OF PRIMORDIALITY WITH ALL THOSE WHO HAVE SUPPORTED & PROPPED UP A 2000 YEAR OLD MONOLITHIC HISTORICAL TYRANNY THAT BEGGED, BORROWED, BULLIED & BULLED* IT WAY INTO THE D.N.A OF EVERY NATION, KINGDOM, TOWN & HAMLET

  3. Chris Halsall Avatar
    Chris Halsall

    @BU David et al.

    You are of course familiar with AI Spam?

    A brave new world…

  4. Chris Halsall Avatar
    Chris Halsall

    So, just to share… My FLOW bill is fully paid.

    I keep calling FLOW, at 1-800-804-2994. I keep being told not to worry, and keep being transfered to Customer Care, and keep being referred to WhatsApp agents, and/or AI Agents.

    I keep being told not to worry. And when I do finally get through to a Human, they are in Jamacia. And supervisors are not available.

    Then I get put on hold for scores of minutes. And are then hung up on.

  5. Bush Tea Avatar
    Bush Tea

    ANY BLACK country that allows its critical utilities and institutions to fall under the hands of the white, albino-centric, money-hungry, descendants of our past SLAVE OWNER class … FULLY deserves to have its asse(t)s raped by the likes of FLOW, DIGICEL, EMERA, Republic Bank and SAGICOR.
    …and without lubricant …when said asse(t)s were ACTUALLY locally owned AND managed by highly qualified locals – but were then SOLD OFF by low-rate political JUDASES for reasons that are not transparent, but perhaps can be justified by THEIR personal silver count.

    What C&W did to local shareholders (and EMERA to their local BLPC minority shareholders too) is par for the course where leadership IDIOCY is bliss.

    Jamaicans have BALLS!
    They are NOT saddled with OUR shiite court system.
    Bushie will NOT be overly surprised if the fate of BB minority shareholders of FLOW differs from that of the Jamaican path as detailed in the blog….

    What a place!
    Once HIGHLY blessed…
    Now BADLY cursed.

  6. Chris Halsall Avatar
    Chris Halsall

    @Bush Tea…

    I hear you, but I respectfully disagree.

    One must always be prepaired to stand alone. That is what I was always taught by my elders.

    Turns out I had a bad ethernet cable between the CTB and the CPE. My bad.

  7. David Avatar
    David

    Traditional media catching up!

    Case in Jamaica gives local C&W shareholders hope

    Barbados-based minority shareholders awaiting a court decision on their class action suit against telecommunications company Cable & Wireless (C&W) say they are buoyed by a Privy Council ruling in a similar case in Jamaica.

    On September 25, the Privy Council, which is Jamaica’s highest court, dismissed C&W Jamaica’s Limited’s (CWJ) appeal against minority shareholder Eric Jason Abrahams.

    The Privy Council decision said Jamaican Justice David Batts and that country’s Court of Appeal were both right not to sanction a scheme of arrangement “to enable CWJ to become a wholly owned subsidiary of Liberty Latin America Ltd, by cancelling the minority shares in consideration of the payment by CWC Cala Holdings Ltd of J$1.45 per share”.

    Some 365 minority shareholders in Barbados, including claimants Ricky Went, Philip Osborne and Omstand, represented by Douglas Skeete, brought a class action suit seeking a court ruling on whether their shareholder rights were infringed during the 2017 amalgamation of C&W (West Indies) Limited and C&W Barbados.

    The claimants subsequently filed an application to join Liberty Global and C&W (West Indies) to the class action suit.

    The case went to trial before Justice Jacqueline Cornelius. After eight years of case management, affidavits, and cross-examination during 54 days of trial that saw pleadings exceed 10 000 pages, the court is currently considering all arguments prior to giving its decision.

    The claimants’ attorney Garth Patterson, SC, of Lex Caribbean (LEX), filed a supplemental submission following the Privy Council’s recent ruling on the CWJ’s appeal those involved in the case said.

    Went, speaking on behalf of the minority shareholders, said that having been quietly confident all along they were now upbeat about the outcome of the class action suit following the Privy Council decision.

    “This Privy Council decision is a landmark decision. Locally, the court is reviewing a lot, let us remain patient,” he said.

    Indirect subsidiary

    In its written 23-page decision, the Privy Council noted that “in 2018, when the scheme was proposed, CWJ was a partly owned indirect subsidiary of Liberty Latin America Ltd.”

    “As at 30, June 2018 Liberty, through its subsidiaries CWC Cala Holdings Ltd and Kelfenora Ltd, held 92.27 per cent of the issued ordinary shares of CWJ. The remaining shares (“the minority shares”) were held by 20 585 shareholders. [Abrahams] held 0.38 per cent – 0.24 per cent in his name and 0.14 per cent through a trust for him. No shares of any other class have been issued,” it stated.

    “The purpose of the scheme was to enable CWJ to become a wholly owned subsidiary of Liberty, by cancelling the minority shares in consideration of the payment by CWC Cala of J$1.45 per share.

    “The shares of CWJ had been listed on the Jamaica Stock Exchange since October 1988 and remained listed until April 2018. The cancellation of the listing followed a voluntary take-over offer by CWC Cala pursuant to which it increased its majority shareholding in CWJ.”

    Before making its ruling, the Privy Council stated that “under the scheme in the present case, the treatment of the minority shares and the shares held by CWC Cala and Kelfenora could hardly be more different”.

    “The minority shares would be cancelled in consideration of the payment of J$1.45 per share, while the other shares would remain unaffected, with the result that CWJ would become a wholly owned subsidiary of Liberty,” said the judgment.

    “The rights attached to the minority and the majority shares are the same before the scheme takes effect, but the treatment of the minority and majority shareholders under the scheme is completely different.

    “In those circumstances, it is clear that they constituted separate classes for the purposes of the Scheme and that, without approval by the statutory majorities at a meeting of the minority shareholders and the separate consent of CWC Cala and Kelfenora, the court had no jurisdiction to sanction the Scheme.”

    The Privy Council said “accordingly, [Justice] Batts was right to refuse to sanction the scheme and the Court of Appeal was right to affirm his decision”.

    (SC)

    Source: Nation

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