English High Court reaffirms decision not to allow activists to proceed with derivative action against Shell

1 August, 2023

In our recent blog post, we discussed the English High Court’s decision to block the shareholder derivative action commenced by an activist shareholder, ClientEarth, against Shell’s directors. The English High Court found that ClientEarth did not have a prima facie case against Shell’s directors.

While this previous decision was made on the papers, ClientEarth invoked its rights under the English civil procedures to request the Court reconsider its decision at an oral hearing. Following an oral hearing, the English High Court reaffirmed its earlier decision on 24 July 2023: ClientEarth v Shell plc [2023] EWHC 1897 (Ch). While part of the judgment concerned certain technical details at the permission stage of a derivation action under English law, the following points may be of interest to Hong Kong readers: Continue reading →

ENGLISH HIGH COURT BLOCKS DERIVATIVE ACTION AGAINST SHELL’S DIRECTORS FROM CLIMATE-CHANGE ACTIVIST SHAREHOLDER

1 June, 2023

Recently, we see a significant uptick in ESG litigations in different parts of the world. Together with this trend came activists’ attempts to make use of judicial channel to hold companies accountable to their ESG-related management decisions.

In the recent English High Court case of ClientEarth v Shell plc & Ors [2023] EWHC 1137 (Ch) ClientEarth, as a minority shareholder holding 27 shares out of a total of over 7 billion shares in Shell, sought to bring a statutory derivative action against Shell’s directors under the UK Companies Act 2006 (UK CA). ClientEarth alleged that Shell’s directors had breached their statutory duties owed to Shell by failing, among others, to formulate a management strategy (Energy Transition Strategy) that sufficiently mitigates climate risk and to take steps to ensure that a former Dutch Court order made against Shell pursuant to Milieudefensie v Royal Dutch Shell plc ECLI:NL:RBDHA:2021:5339 would be complied with (Dutch Court Order).

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