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Judgment No. SC 34/18|15
Civil Appeal No. SC 165/16
Marange itself had already passed a resolution to adopt the Minister’s plans for the
consolidation of diamond mining companies, including Mbada into one single entity
without agreement with Grandwell, its co-shareholder. This was in spite of the
outstanding details Grandwell had requested on the proposed scheme. Further, the
evidence showed that it was officials from Mbada, as the Minister’s
representatives, with the assistance of the police, who had executed the
Minister’s directives.
In my view, the spirit of the derivative action, being an exception to the rule in
Foss v Harbottle, is that “—the claims of justice would be found superior to any
difficulties arising out of technical rules respecting the mode in which
corporations are required to sue.”
These are the reasons which swayed the court a quo to allow derivative action by
Grandwell (the first respondent).
The second situation, which basically reflects the English position, is that if it is
proved that calling a meeting was an exercise in futility, the other shareholder can institute
proceedings on behalf of the company without seeking a resolution that the company institute
the proceedings. For the shareholder who seeks to rely on derivative action to rely on this
option, the court must be satisfied that the majority shareholders or equal shareholders, who
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