Reed Smith Client Alerts

Key takeaways

  • Careful drafting of company articles of association is crucial to avoid ambiguous and contradictory provisions.  
  • Mechanisms for the variation of shareholder rights are often heavily negotiated and are not always straightforward.
  • Where the drafting of the articles is unclear, the courts will seek to interpret the articles in a manner that makes commercial sense.

Auteurs: Ravi Pattani Marcus Price Jamie Fryer

There is no rational or logical justification for such a bizarre regime” – Lord Justice Snowden

October saw the Court of Appeal hand down its judgment in DnaNudge Ltd v. Ventura Capital Ltd [2023] EWCA Civ 1142, in which it considered the interpretation of provisions in articles of association dealing with the variation of the rights attaching to preference shares, and held that the ordinary shareholders’ attempt to convert preference shares into ordinary shares was null and void.