Introduction
On 24 July 2025, the Judicial Committee of the Privy Council delivered a landmark judgment in Jardine Strategic Limited v. Oasis Investments II Master Fund Ltd and 80 others [2025] UKPC 34. This is a timely decision and follows a series of recent cases in the English High Court in which the existence of the Shareholder Rule has been seriously questioned. Most recently, Mr. Justice Picken held in Aabar Holdings S.à.r.l. v. Glencore Plc [2024] EWHC 3046 (Comm) that the Shareholder Rule, which historically allowed shareholders to access certain company documents protected by privilege, should no longer be applied. That judgment was appealed directly to the Supreme Court, which declined the leapfrog because the same issue fell to be resolved by the Privy Council in Jardine, and the Privy Council could, if appropriate, make a Willers v. Joyce order so that its decision would be binding in England and Wales. This is what the Privy Council decided for the following reasons.
Background to the dispute
The case concerned dissenting shareholders who challenged the fair value offered for their cancelled shares following an amalgamation of Jardine Strategic Holdings Ltd (Jardine Strategic) and JMH Bermuda Ltd.
The central issue was whether these shareholders were entitled, by virtue of the Shareholder Rule, to access legal advice obtained by Jardine Strategic prior to the litigation, which Jardine Strategic claimed was protected by legal professional privilege.
The background to the Shareholder Rule is considered in our previous articles on this topic, The English High Court considers the Shareholder Principle and The end of the “Shareholder Rule”?.
The Privy Council’s decision
The Privy Council held that the Shareholder Rule forms no part of the law of Bermuda and should no longer be recognised in England and Wales. In forming this view, the Privy Council found that:
- The original proprietary justification for the shareholder rule is fundamentally inconsistent with the modern doctrines of company law, whereby companies have separate legal personalities and members have no proprietary interest in the funds or assets of the company. The Privy Council also found that the proprietary basis for the rule had not been supported for some time either in reported cases or academic writings [paragraph 80].
- The more recent justification for the existence of the shareholder rule was joint interest privilege. The Privy Council considered the notion that there was a joint interest between the company as a separate legal entity and its shareholders to be a “serious oversimplification” which wrongly assumed that the interests of the shareholders were always aligned among themselves [paragraph 86]. In short, it could not sensibly be said that there was always a community of interest between every company and its shareholders.
- The relationship between a company and its shareholders is essentially contractual, and the terms of that contractual relationship (e.g., the articles of association or bye-laws) typically govern what a shareholder is entitled to see. A company’s articles or bye-laws often restrict shareholders from seeing company documents. Accordingly, the Privy Council considered that it would be strange if an exception to privilege could be based on a special relationship between a company and its shareholders, when the contractual agreement between the parties pointed in the opposite direction [paragraph 90].
The Privy Council also rejected the more nuanced, case-by-case approach to joint interest privilege, pursuant to which the burden would be on the shareholder to demonstrate, on the particular facts of the case, a sufficient joint interest in obtaining and receiving legal advice. The Privy Council emphasised the need for certainty in the context of legal professional privilege and noted that the application of a “general rule that privilege would not be available, subject to fact-sensitive exceptions, would be even worse” than the application of the Shareholder Rule [paragraphs 92-93].
The Privy Council considered that whether legal advice was privileged or not “demands a bright line”. If it were held that the relationship between a company and its shareholders falls within the joint interest principle and so allows a shareholder to obtain privileged legal advice, then the Privy Council considered that this would have serious disadvantages. These were that it would (i) discourage companies from obtaining candid legal advice in confidence; (ii) ignore the separate personality of the company; and (iii) wrongly assume a simple coincidence of interests, contrary to the typical commercial reality.
Practical implications
For companies, this decision provides reassurance that legal advice obtained in the ordinary course of business will remain privileged and confidential, even in the face of subsequent shareholder litigation. For shareholders, it clarifies that their rights to company information do not extend to privileged legal advice (save where a recognised exemption applies).
For shareholders, the decision removes a key leverage often utilised in litigation by shareholders
Given the Willers v. Joyce order, the Privy Council’s decision binds all the courts in England and Wales, and so the Court of Appeal hearing on the Aabar v. Glencore case that was due to take place in January 2026 has been vacated.
In light of this decision, companies may wish to revisit internal policies and training to ensure that privilege is properly maintained and asserted against shareholders.
Conclusion
The decision in Jardine marks a decisive new chapter in the law of privilege and shareholder rights. By abolishing the Shareholder Rule, the Privy Council has conclusively settled the debate and reinforced the fundamental importance of legal professional privilege. It has also provided much-needed certainty for companies and their advisers. Clients are encouraged to consider the implications of this decision for their own governance, litigation strategy, and shareholder relations.
Client Alert 2025-215
