Shareholders' Reserve Power: Implied Terms and Public Policy
Do shareholders have reserve or residual powers of management when the board is unable or unwilling to act? In Chan Siew Lee v TYC Investment Pte Ltd  5 SLR 409, the Singapore Court of Appeal answered this question in the affirmative. In so doing, the court employed a contractarian approach, rationalising the power as one that is conferred on shareholders by a term implied in the company’s constitution on the basis of necessity or business efficacy. But a closer review will demonstrate that the court’s analysis, despite its overt reliance on contractual principles, is ultimately of a hybrid nature that takes on board both contractual as well as public policy concerns. This approach aptly reflects the complex nature of the company’s internal workings and warns against a reductionist approach that tackles the issue from a monolithic (contractual) perspective.
company law, shareholders' reserve power, division of power between management and shareholders, terms implied in corporate constitution, public policy
Asian Studies | Commercial Law
Journal of Business Law
Sweet and Maxwell
LEE, Pey Woan.
Shareholders' Reserve Power: Implied Terms and Public Policy. (2016). Journal of Business Law. , (2), 128-138. Research Collection School Of Law.
Available at: http://ink.library.smu.edu.sg/sol_research/1686
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