Shareholder Disputes


Shareholder grievances are at the focal of Fareya Azfar’s corporate disputes practice expertise. The firm has acted both for minority shareholders who are being marginalized in their companies, and for companies who face the threat of minority shareholder action.

Shareholders may be protected by the contractual terms of their shareholder’s agreement. If you have a shareholders agreement, the procedure for resolving disputes will be clear and known to shareholders. In that case, the dispute may be managed early, hopefully without the need for court proceedings. 

Besides the contractual protections under the shareholders’ agreement or articles of association, a shareholder with cause to believe that the directors and other shareholders have acted in a manner which is unfairly prejudicial to (at least) some shareholders, or have acted in a manner which devalues his shares has many statutory protections which provide a vast array of remedies.

We have represented minority shareholders to pursue their statutory rights and claim protections in the following instances:

  • not invited to general meetings or otherwise squeezed out of management anticipation
  • allotments of share For no discernible purpose or otherwise resulting in unfair dilution of minority share value
  • a failure to consult the complainant or to provide information;
  • misappropriation of company business or assets;
  • mismanagement of internal company affairs;
  • failure to pay reasonable dividends.

There is no prescribed list of actions or omissions that, by definition, amount to unfair prejudice. Both prejudice and unfairness must be evidenced. We take cognizance of the facts and circumstances of each case, establishing and evidencing the conduct complained.

Shareholders rights is a complex area, and shareholders and potential claimants need to consider the facts of any particular case carefully. The facts and circumstances of the case will always prescribe the choice of action which an aggrieved shareholder may bring.


―it would be impossible and wholly undesirable to define the circumstances in which the application of equitable principles might make it unjust or inequitable (or unfair) for a party to insist on legal rights or to exercise them in a particular way ― Lord Hoffmann in O‘Neill vs Phillips, (1999) 2 BCLC 1

ex-ante protections

Minority shareholders can seek to protect themselves against misuses of majority rule by bargaining for express protections in the articles of association or in separate shareholders’ agreements.

With experience, many shareholders disputes become identifiable as recurring instances. With our advice, shareholders can contemplate and agree in advance how the business will be conducted and conflicts will be resolved in future, and seek to anticipate and address likely problems insofar as these can be foreseen.

Carefully drafted incorporation agreements, partnership agreements, articles of association, and shareholder agreements can go a long way towards avoiding problems. Some of the rights that could be protected ex-ante in your shareholders’ agreement are:

  • preemption rights
  • tag-along rights
  • observer rights 
  • entrenchment of management
  • reserved matters, veto rights
  • information rights

Ex-ante contracting even addresses detailed exit provisions giving rise to a contractual right to exit on fair terms in defined events.




The remedy that is most often sought is that the other shareholders buy their shares for a fair value.

Courts have the power to impose upon the parties to a dispute whatever settlement the court considers just and equitable. This discretion is deliberately unfettered for it allows the Courts to order the remedy which circumstances so warrant.