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Russell v Northern Bank Development Corp Ltd

[1992] 1 WLR 588

Case summary last updated at 21/01/2020 16:22 by the Oxbridge Notes in-house law team.

Judgement for the case Russell v Northern Bank Development Corp Ltd

Agreement between all 5 shareholders and company that share structure of company should not be altered unless certain procedures in agreement were complied with.Resolution was proposed that was not compliant with agreement. C, a shareholder, sought declaration agreement was valid. Held:
Lord Jauncey
·        Is permissible for shareholders to agree amongst themselves to exercise voting rights in manner which would be unlawful if they were binding upon company.
·        However company cannot validly deprive itself of power to amend its articles.
·        Hence:
1)     Agreement as between members and company is unenforceable
-        However it is severable from agreement as between shareholders.
2)     Agreement still valid as between shareholders.

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