Case Digest: Jardine Strategic Ltd v Oasis Investments II Master Fund Ltd and others [2025] UKPC 34

<center>Judgment Date: 24 July 2025</center>

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Background

The case arose from the amalgamation of companies within the Jardine Matheson group. Jardine Strategic Ltd, the appellant, cancelled shares of one entity and was required to pay dissenting shareholders the fair value of those shares. Proceedings under section 106(1) of the Bermuda Companies Act 1981 followed to determine that value.

The shareholders sought disclosure of legal advice given when the share price of US $33 was set. Jardine Strategic resisted disclosure, citing legal advice privilege. At first instance and on appeal in Bermuda, the shareholders succeeded, with the courts applying the so-called “Shareholder Rule”.

Decision of the Privy Council

In a joint judgment, Lord Briggs and Lady Rose concluded that the rule lacked any sound legal foundation. They described it as “altogether unclothed”, rejecting the idea that shareholders hold a proprietary interest in company funds or a presumed “joint interest” in privileged advice.

The Board dismissed suggestions that courts could apply the rule flexibly on a case-by-case basis, finding such an approach would create unacceptable uncertainty. Instead, it drew a “bright line”: companies retain full privilege over their legal advice, even against shareholder claimants.

Practical Implications

The decision clarifies that companies and directors may rely on privilege without exception in disputes with shareholders. However, shareholders have lost an avenue for obtaining disclosure that had been assumed to exist in several contexts, including:

unfair prejudice petitions under section 994 of the Companies Act 2006;
derivative actions under section 260 of the Companies Act 2006 and common law equivalents;
“fair value” assessments in offshore jurisdictions such as the Cayman Islands and the BVI; and
claims under sections 90 and 90A of the Financial Services and Markets Act 2000 (“FSMA”).

The judgment is also an emphatic affirmation of privilege as a fundamental right. While it strengthens corporate defendants’ position, it may leave claimant shareholders facing a more difficult path in litigation.

Conclusion

The ruling closes the door on the Shareholder Rule after more than a century of uncertain application. It resolves questions about the rule’s scope—such as whether it applied to intermediated shareholders or other forms of privilege—and aligns the law with modern commercial reality. The Privy Council’s approach underscores that privilege cannot be diluted without clear justification, even where this creates information imbalances between companies and their shareholders.

Key Takeaways

The Shareholder Rule is no longer good law in England and Wales following a Willers v Joyce direction.
Companies can now withhold privileged legal advice from shareholders in all contexts.
The decision provides certainty for directors but narrows disclosure rights for shareholders in unfair prejudice claims, derivative actions, FSMA claims and offshore “fair value” proceedings.
The Board emphasised the need for a “bright line” approach, rejecting flexible or open-textured applications of privilege.
The ruling reflects the modern complexity of corporate structures, where divergent shareholder interests make a “joint interest” analysis unsustainable.

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