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vi
Preface
Inspired by a postgraduate module on comparative company law that we taught together at
King’s College London, the initial idea for this book was conceived at a time that was still
steeped in the optimism of the new millennium. The Enron crisis had been successfully
overcome; regulatory competition had taken off in Europe following the CJEU’s freedom
of establishment case law; and new corporate governance legislation on both sides of the
Atlantic had been enacted with a view to addressing the shortcomings of the prevalent
contractarian model of corporate law with its emphasis on shareholder value and deregula-
tion. Then the global financial crisis struck. Although corporate law and corporate govern-
ance failures were of limited significance as contributing factors, the belief in efficient capital
markets and neo-classical economics was severely shaken. In the same way as economic
theory has been looking for alternatives to traditional models ever since the crisis, corporate
(law) theory is still awaiting its reconceptualization. This book seeks to contribute to this
ongoing discussion by examining trends and comparing regulatory philosophies in repre-
sentative jurisdictions.
Following a functional approach, we provide a detailed comparative analysis of key areas
of the company laws of the United Kingdom, the United States, France, and Germany,
including relevant legislative measures adopted by the EU. We present edited and, where
necessary, translated versions of seminal case law, sketch the evolution of the law, and offer a
view on its operation in the corporate economy. Corporate law, of course, is shaped by eco-
nomic, financial, and political conditions, and shapes these conditions. We seek to under-
stand whether differences in the corporate economy in the countries that we analyse are
reflected in the law, and whether different regulatory approaches, techniques, and styles dis-
tinguish corporate law systems at a more fundamental level, be it in the tradition of ‘legal
families’, three of which are represented in our sample of jurisdictions, or of ‘varieties of
capitalism’. The translation, reprint, and analysis of actual cases will enable the reader to gain
a deeper understanding of the different styles adopted by legal systems and assess to what
extent EU harmonization measures have achieved the desired results. Where appropriate,
the discussion of the cases will be accompanied by questions that will encourage the reader
to think further and relate the decisions to the economic and theoretical underpinnings of
the area of law in question. These features make the book also suitable for classroom use.
Although a joint effort, Michael has assumed responsibility for Chapters 1 to 3 and 9
to 11, and Carsten for Chapters 4 to 8 (and the Appendix). We aim to state the law as of 1
December 2018.
We would like to thank Luca Enriques, Martin Gelter, Christian Hoffmann, Andrew
Johnston, John Lowry, Gerry McCormack, Marc Moore, Wolf-Georg Ringe, Jessica Schmidt,
and Edmund Schuster for reading draft chapters of the book and providing us with valuable
feedback and suggestions. Needless to say, any remaining mistakes are our own. Further, our
thanks to the editorial team at OUP who, whilst constantly encouraging completion of the
project, have been very patient throughout the process and competently oversaw the book’s
production from start to finish. We owe a special debt to our wives, Esin and Kathryn, who
have supported us throughout this laborious process with extraordinary patience.
vi
ix
Contents
Table of Cases xv
Table of Legislation xxxv
Table of Treaties and International Instruments lxvii
List of Abbreviations lxix
PA RT 1 : T H E BU SI N E S S C O R P O R AT IO N A S A L E G A L
I N S T I T U T IO N
1 LEGAL AND THEORETICAL FOUNDATIONS OF THE BUSINESS
CORPORATION 3
A. Concepts and Terminology in Common Law and Civil Law 4
I. Corporation and partnership as institutional archetypes 8
1. England and Wales 8
2. United States 12
3. Germany 18
4. France 22
II. The essential properties of the business corporation 26
B. Separate Legal Personality 29
I. Meaning 29
II. Economic rationale 37
C. Limited Liability 40
I. Meaning 40
II. Economic rationale 41
D. The Modern Corporation in Historic Perspective 50
E. Corporate (Law) Theory: The Nature of the Corporation 56
F. Sources of Domestic Corporate Law 74
I. United Kingdom 75
II. Germany 77
III. France 79
IV. United States 81
2 THE EUROPEANIZATION OF CORPORATE LAW 85

A. Laws and Law-making in the EU 86
I. The operation of the internal market 88
II. Nature and effect of EU law and EU legal instruments 90
III. Overview of the law-making process 94
B. The acquis unionaire—An Overview 97
I. Constitutional foundations 98
II. First wave—external liability structure 100
III. Second wave—securities regulation and corporate mobility 103
IV. Third wave—corporate governance in listed companies 107
C. Free Movement of Companies 111
I. Regulatory competition 112
II. Freedom of establishment 118
1. Scope of application 118
2. Restrictions and justification 127
III. EU legal infrastructure 130
1. Statute for a European company (SE) 131
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2. Cross-border Merger Directive 137
3. Fourteenth Company Law Directive on Transfer of the
Registered Office (Cross-border Conversions) 139
D. Free Movement of Capital 142
I. Golden shares 142
II. Capital movements 144
III. Restrictions 146
IV. Justification 149
E. The Future of EU Company Law Post-Brexit 151
3 INCORPORATION AND CORPORATE REPRESENTATION 155

A. Incorporation 157
I. Incorporation processes 157
1. Germany 158
2. France 163
3. United Kingdom 166
4. United States 170
II. Disclosure, in particular upon formation 172
1. Media of disclosure 172
2. Items to be disclosed 175
3. Effects of (non-)disclosure 176
4. The situation in the United States 179
III. Nullity 179
IV. Pre-incorporation contracts 184
2. Germany 187
3. France 190
B. Corporate Representation 195
I. Ultra vires 197
II. Primary rules of attribution 200
2. Germany 205
3. France 207
III. General rules of attribution 211
2. France and Germany 214
C. Concluding Remarks 217
PA RT 2 : ST R AT E G I E S T O R E D U C E AG E N C Y C O S T S B E T W E E N
D I R E C T O R S A N D SHA R E HO L D E R S
4 CORPORATE GOVERNANCE REGULATION 223
A. Power and Legitimacy in Business Corporations 223
I. The corporation as a public institution 225
II. Limits to the public-interest conception of corporate power 230
B. Corporate Governance as an Economic Problem 236
I. Efficiency and social welfare 237
II. Agency cost theory 240
III. Models of the market economy and the corporation 242
C. Corporate Governance as a Regulatory Technique 245
I. Domain of corporate governance regulation 245
II. Goal of corporate governance regulation 249
xi
Contents xi
III. The corporate governance movement 273
D. Corporate Actors and Patterns of Corporate Ownership 284
I. Officers 285
II. Directors 286
III. Shareholders 290
IV. Patterns of ownership 291
E. Board Structure Regulation 299
I. One-tier and two-tier board paradigm 303
1. UK 307
2. US 309
3. Germany 311
4. France 313
II. Boards as small groups 316
III. Board composition 318
1. UK 319
2. US 321
3. Germany 323
4. France 325
5. Gender diversity 327
IV. Information rights 330
5 ELEMENTS OF SHAREHOLDER DEMOCRACY 335

A. Origins of Corporate Power 335
I. UK 336
II. US 342
III. Germany 351
IV. France 359
B. Limits of Corporate Power 363
I. UK 365
II. US 373
III. Civil law jurisdictions 378
C. Shareholder Decision-making 380
I. Shareholder voting rights 384
1. One share, one vote? 384
2. Calling a general meeting and voting at meetings 391
3. Shareholder engagement and incentives 397
II. Proxies 403
1. Proxy voting and proxy regulation 409
2. The US model: managers as proxy holders 412
3. The German model: banks as proxy holders 423
III. Challenging shareholder decision-making 428
1. Germany: legality review 432
2. Other jurisdictions 437
D. Appointment and Removal of Directors 440
I. Appointment 444
II. Removal 447
III. Appointment and removal under co-determination 454
6 CONSTRAINTS ON DISCRETION: PART 1—DIRECTORS 465

A. Introduction 465
I. Managerial decision-making and legal constraints 465
II. The fiduciary basis of directors’ duties 466
B. Duty of Care 473
I. Structure of the duty of care 473
1. UK 473
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xii Contents
2. US 480
3. Germany 506
4. France 519
II. Internal control systems and excessive risk-taking 533
C. Duty of Loyalty 551
I. Self-dealing 552
1. UK 552
2. US 558
3. Germany 565
4. France 569
II. Corporate opportunities 575
1. UK 575
2. US 586
3. Germany 592
4. France 597
7 CONSTRAINTS ON DISCRETION: PART 2—SHAREHOLDERS 603

A. Introduction 603
B. Constraints without a Sale of Control 604
I. UK 604
1. Shareholder voting and duties 604
2. Unfairly prejudicial conduct (s 994 Companies Act 2006) 610
II. US 619
III. Germany 625
IV. France 634
C. Constraints in Sale of Control Transactions 639
I. Exit I: Mandatory bid/pro rata sharing 640
II. Exit II: Buy-out/freeze-out and appraisal 648
III. Fiduciary constraints 661
8 ENFORCEMENT 669
A. Introduction 669
B. Contractualization of Responsibility 670
I. Authorization and ratification 670
II. Indemnification and insurance 672
III. Contractual modification of directors’ duties 674
C. Legal Action 678
I. Litigation by the company 678
II. Minority shareholder lawsuit 681
1. Incentive problems and the derivative action 686
2. UK 691
3. US 699
4. Germany 709
5. France 712
6. Comparative effectiveness of the minority shareholder lawsuit 714
D. Substitute Mechanisms 716
PA RT 3 : C R E D I T O R S’ P R E F E R E N T IA L AC C E S S T O
C O R P O R AT E P R O P E RT Y
9 LEGAL CAPITAL 723
A. Basic Elements in Historic Perspective 726
I. The American experience 726
II. The European experience prior to the Second Company Law Directive 731
xi
Contents xiii
III. The Second Company Law Directive 735
B. Raising of Capital 736
I. European jurisdictions 736
1. Types of shares and issue process 738
2. Minimum capital requirements 743
3. Contributions in cash 744
4. Contributions in kind 748
5. The German doctrine of disguised contributions in kind 751
II. United States 756
1. Consideration for shares 758
2. Protection mechanisms 759
C. Capital Maintenance 761
1. Declaring a dividend 763
2. Restrictions on dividends and distributions 765
3. Unlawful and disguised distributions 769
4. Acquisition by the company of its own shares 773
5. Financial assistance 777
1. Statutory restrictions on dividends 781
2. Unlawful distributions 783
3. Contractual dividend restrictions 784
4. Acquisition by the corporation of its own shares 786
5. Financial assistance 786
D. Capital Measures 789
1. ‘Effective’ and ‘nominal’ increase 793
2. Pre-emptive rights 796
3. ‘Effective’ and ‘nominal’ reduction 800
E. Comparative Analysis: Efficiency and Efficacy 804
I. Creditor protection 805
II. Shareholder protection 807
III. Overall assessment and conclusion 808
10 VEIL-PIERCING 813
A. Insider Opportunism and Veil-piercing 814
B. United States 816
I. Piercing the corporate veil 817
1. Control 820
2. Wrongful or unjust act 822
II. Enterprise liability 829
C. Germany 834
I. The law of corporate groups (Konzernrecht) 835
1. Enterprise agreements 838
2. De facto groups 840
II. Piercing the corporate veil 842
1. Liability for causing the company’s insolvency—
Existenzvernichtender Eingriff 843
2. Amalgamation of assets 851
D. England and Wales 853
I. ‘Piercing/lifting the corporate veil’ at common law 853
II. Statutory liability under Insolvency Act 1986 861
III. Liability based on tort law 868
E. France 873
I. Civil liability under company law legislation 873
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II. Civil liability based on insolvency legislation 876
III. Identity of company and shareholders: société fictive and confusion de
patrimoines 881
F. Concluding Remarks 884
11 CORPORATE INSOLVENCY 889

A. Ending the Corporate Existence 890
I. Grounds for (solvent) dissolution 891
II. (Solvent) liquidation processes 896
III. Termination and resurrection 900
B. The Special Case of Insolvency 902
I. Overview 906
II. England and Wales 907
1. Cash flow test or commercial insolvency test 908
2. Balance sheet insolvency 910
III. Germany 913
1. Cash flow insolvency and prospective cash flow insolvency 914
2. Balance sheet insolvency 915
IV. United States 917
1. ‘Equitable (in)solvency’ (cash flow insolvency) and
‘unreasonably small capital’ 918
2. ‘Legal insolvency’ (balance sheet insolvency) 918
V. France 920
1. Cash flow insolvency 921
2. Pre-insolvency procedures 921
C. Transition Regimes 923
I. Affirmative incentives 925
II. Liability incentives 927
D. From a Tragedy of the Commons to a Tragedy of the Anti-commons 930
E. Menu of Insolvency Options 934
I. Menu choice 935
II. Collective restructuring procedures and ‘privatization’ options 946
1. United States: Chapter 11 and §363 sales 948
2. England and Wales: (Pre-pack) administration, CVA,
scheme of arrangement, reform proposals 954
3. France: court-assisted and in-court recovery and reorganization
proceedings 961
4. Germany: standard procedure, self-administration,
and insolvency plan 966
III. Group restructuring 972
1. Domestic solutions 973
2. International solutions, in particular under the 2015 EUIR 975
IV. Insolvent liquidation 977
1. Insolvent liquidation processes 978
2. Statutory orders of priority 980
F. Conclusion 985
Appendix: Competences and Decision-Making of the General Meeting 987

Index 995
xv
Table of Cases
EUROPEAN COURT OF JUSTICE
Adeneler v Ellinikos Organismos Galaktos, Case C–212/04, ECLI:EU:C:2006:443��93–94
Alpine Investment BV v Minister van Financiën, Case C-384/93, ECLI:EU:C:1995:126 ��127–28
Antonio Miravitlles Ciurana v Contimark SA, Jordi Socías Gispert, Case C-243/16,
ECLI:EU:C:2017:197�� 738
Audiolux SA v Groupe Bruxelles Lambert SA (GBL), Case C-101/08,ECLI:EU:C:2009:626��290–91, 735
Becker v Finanzamt Münster, Case 8/8, ECLI:EU:C:1982:7��92–93
Berlusconi and Others, Joined Cases C-387/02, C-391/02, and C-403/02,
ECLI:EU:C:2005:270��92–93, 176
Bosman, Case C-415/93, ECLI:EU:C:1995:463��127–28
Cartesio, Case C-210/06, ECLI:EU:C:2008:723�� 73, 118, 121–22, 127–28
Centros Ltd v Erhvervs-og Selskabsstyrelsen, Case C-212/97,
ECLI:EU:C:1999:126��104–5, 111–12, 117–20, 127–28, 129–30
CIA Security International SA v Signalson and Securitel SPRL, Case C-194/94, ECLI:EU:C:1996:172�� 92–93
CILFIT, Case 283/81, ECLI:EU:C:1982:335��754–55
Commission v Belgium, Case C-503/99, ECLI:EU:C:2002:328�� 105, 143, 146–47, 149–50
Commission v France, Case C-483/99, ECLI:EU:C:2002:327�� 105, 142, 143, 145–47, 149–50
Commission v Germany, Case C-112/05, ECLI:EU:C:2007:623�� 105, 142, 144–47, 148–49, 150,
176, 266, 387–88
Commission v Germany, Case C-191/95, ECLI:EU:C:1998:441�� 176
Commission v Germany, Case C-95/12, ECLI:EU:C:2013:676��105, 142, 144
Commission v Italy, Case C-174/04, ECLI:EU:C:2005:350��105, 142, 143, 146–47
Commission v Italy, Case C-326/07, ECLI:EU:C:2009:193��105, 142, 143–44, 145–46, 149–50
Commission v Italy, Case C-58/99, ECLI:EU:C:2000:280 �� 105, 142, 143–44
Commission v Netherlands, Joined Cases C-282 & 283/04,
ECLI:EU:C:2006:608�� 105, 142, 144–46, 147–48
Commission v Portugal, Case C-171/08, ECLI:EU:C:2010:412 ��74–150
Commission v Portugal, Case C-367/98, ECLI:EU:C:2002:326 �� 105, 142, 143, 146–48, 149, 150
Commission v Portugal, Case C-543/08, ECLI:EU:C:2010:669 ��105, 142, 143–44, 146–47, 148–50
Commission v Spain, Case C-196/07, ECLI:EU:C:2008:146�� 105, 142
Commission v Spain, Case C-338/06, ECLI:EU:C:2008:740��736, 738, 754–55, 792
Commission v Spain, Case C-463/00, ECLI:EU:C:2003:272��105, 142, 143, 145–47, 150
Commission v United Kingdom, Case C-98/01, ECLI:EU:C:2003:273�� 105, 142, 144, 145–46, 147–48
Criminal Proceedings against Keck and Mithouard, Joined Cases C-267 and 268/91,
ECLI:EU:C:1993:905�� 89, 128, 147–48
Daihatsu, Case C-97/96, ECLI:EU:C:1997:581 ��98–99, 172–73, 176
Daily Mail, Case 81/87, ECLI:EU:C:1988:456 ��118, 120–21
Diamantis, Case C-373/97, ECLI:EU:C:2000:150��790–91
Dowling and Others, Case C-41/15, ECLI:EU:C:2016:836 ��736–37, 791
Ekklisias, Case C-381/89, ECLI:EU:C:1992:142 ��790–91
Erzberger v TUI, Case C‑566/15, AG ECLI:EU:C:2017:562 ��459–60
Eurofood, Case C-341/04, IFSC ECLI:EU:C:2006:281��936–37
Faccini Dori, Case C-91/92, ECLI:EU:C:1994:292 ��92–93
Federconsumatori v Commune di Milano, Joined Cases C-463/04 & C-464/04,
ECLI:EU:C:2007:752��105, 142, 144
Flaminio Costa v ENEL, Case 6/64, ECLI:EU:C:1964:66�� 86
Foster v British Gas plc, Case C-188/89, ECLI:EU:C:1990:313��92–93
xvi
xvi Table of Cases

Gebhard v Consiglio dell’Ordine degli Avvocati e Procuratori di Milano, Case C-55/94,
ECLI:EU:C:1995:411�� 89, 127–28, 129
Germany v European Parliament and Council, Case C-376/98, ECLI:EU:C:2000:544�� 99
Germany v European Parliament and Council, Case C-380/03, ECLI:EU:C:2006:772�� 99
Grad v Finanzamt Traunstein, Case 9/70, ECLI:EU:C:1970:78��92–93
H v HK, Case C-295/13, ECLI:EU:C:2014:2410 ��935–36
Haaga, Case 32/74, ECLI:EU:C:1974:107��175–76, 201
Haribo Lakritzen Hans Riegel BetriebsgmbH v Finanzamt Linz, Joined Cases C-436/08 &
C-437/08, ECLI:EU:C:2011:61 ��145–46
Hirmann v Immofinanz, Case C-174/12, AG ECLI:EU:C:2013:856�� 179–80, 762–63
Inspire Art, Case C-167/01, ECLI:EU:C:2003:512��104–5, 111–12, 117–18, 119–20, 127–28, 129–30
Interedil Srl, Case C-396/09, ECLI:EU:C:2011:671��937–42
Internationale Handelsgesellschaft v Einfuhr und Vorrahtsstelle für Getriede und
Futtermittel, Case 11/70, ECLI:EU:C:1970:114 ��90–91
Karella and Karellas v Greek Minister of Industry, Energy and Technology, Joined
Cases C-19 and 20/90, ECLI:EU:C:1991:229 �� 736, 737, 790–91
Kefalas, Case C-367/96, ECLI:EU:C:1998:222��790–91
Kerafina, Joined Cases C-134/91 and 135/91, ECLI:EU:C:1992:434��790–91
Kornhaas v Dithmar, Case C-594/14, ECLI:EU:C:2015:806 ��935–36
Kotnik and Others, Case C-526/14, ECLI:EU:C:2016:570�� 791
Kühne v Finanzamt München III, Case 50/88, ECLI:EU:C:1989:262��92–93
Marks & Spencer plc v HM’s Inspector of Taxes, Case C-446/03, ECLI:EU:C:2005:763��120–21
Marleasing SA v La Comercial Internacional de Alimentacion SA, Case C-106/98,
ECLI:EU:C:1990:395, Judgment of the Court of 13 November 1990 �� 92–93, 180–82
Marshall v Southampton and South-West Hampshire Area Health Authority, Case 152/84,
ECLI:EU:C:1986:84��92–93
Meilicke v ADV/ORGA, Case C-83/91, ECLI:EU:C:1992:178 ��736, 737–38, 745–46
Mulliez and Others, Joined Cases C-23/03, C-52/03, C-133/03, C-337/03, and C-473/03,
ECLI:EU:C:2006:285�� 176
Nold v Commission, Case 4/73, ECLI:EU:C:1974:51��90–91
NV Algemene Transport-en Expeditie Onderneming van Gend en Loos v
Netherlands Inland Revenue Administration, Case 26/62, ECLI:EU:C:1963:1��86, 89–90
Océano Grupo Editorial SA v Murciano Quintero and Salvat Editores SA v Sánchez Alcón
Prades and Others, Joined Cases C-240 to C-244/98, ECLI:EU:C:2000:346��92–93
Pfeiffer v Deutsches Rotes Kreuz, Joined Cases C-397/01 and C-403/01, ECLI:EU:C:2004:584��92–94
Polbud, Case C-106/16, ECLI:EU:C:2017:804��118, 125–28, 129–30
Procureur du Roi v Dassonville, Case 8/74, ECLI:EU:C:1974:82��89, 127–28
Rabobank, Case C-104/96, ECLI:EU:C:1997:610 ��201–2
Rewe-Zentral AG v Bundesmonopolverwaltung für Branntwein, Case 120/78,
ECLI:EU:C:1979:42 (Cassis de Dijon)�� 89
Reyners v Belgium, Case 2/74, ECLI:EU:C:1974:68�� 98
SACE v Italian Ministry of Finance, Case 33/70, ECLI:EU:C:1970:118��92–93
Säger, Case C-76/90, ECLI:EU:C:1991:331��127–28
Segers, Case 79/85, ECLI:EU:C:1986:308�� 118
SEVIC Systems AG, Case C-411/03, ECLI:EU:C:2005:762��122, 127–28
Siemens AG v Nold, Case C-42/95, ECLI:EU:C:1996:444��792, 798–99
Staubitz-Schreiber, Case C-1/04, ECLI:EU:C:2006:39 ��938, 939–40
Stauder v City of Ulm, Case 29/69, ECLI:EU:C:1969:57 ��90–91
Test Claimants in the FII Group Litigation v Commissioners of Inland Revenue,
Case C-35/11, ECLI:EU:C:2012:707�� 146
Texdata Software, Case C-418/11, GmbH ECLI:EU:C:2013:588�� 176
Ubbink, Case 136/87, ECLI:EU:C:1988:423�� 179–80, 184–85
Überseering, Case C-208/00, ECLI:EU:C:2002:632 �� 104–5, 111–12, 117–18, 119–21, 128
Unilever Italia SpA v Central Food SpA, Case C-443/98, ECLI:EU:C:2000:496��92–93
xvi
Table of Cases xvii

United Kingdom v European Parliament and Council, Case C-66/04, ECLI:EU:C:2005:743 �� 99
United Kingdom v European Parliament and Council, Case C-217/04, ECLI:EU:C:2006:279 �� 99
VALE Épitési kft,, Case C-378/10, ECLI:EU:C:2012:440 �� 118, 123, 125–26, 127–30
Van Duyn v Home Office, Case 41/74, ECLI:EU:C:1974:133 ��92–93
Von Colson and Kamann v Land Nordrhein-Westfalen, Case 14/83, ECLI:EU:C:1984:153��92–93
AUSTRALIA
Australian Securities & Investments Commission (ASIC) v Healey [2011] FCA 717�� 480
Australian Securities & Investments Commission (ASIC) v Rich 174 FLR 128 (2003)�� 479
Edman v Ross (1922) 22 SR (NSW) 351�� 333
Gambotto v WCP Ltd (1995) 182 CLR 432 �� 609, 667
Kinsela v Russel Kinsela Pty Ltd (in liquidation) (1986) 4 NSWLR 722, 730�� 903
Link Agricultural Pty Ltd v Shanahan (1998) 28 ACSR 498 �� 444
Noel Tedman Holding Pty Ltd, Re (1967) Qd R 561 (Queensland SC)�� 9–10
Peters’ American Delicacy Co Ltd v Heath, 61 CLR 457 (High Court of Australia 1939)�� 606–7, 609, 610
Thorby v Goldberg (1964) 112 CLR 597�� 348
CANADA
Brant Investments Ltd v KeepRite Inc., 80 DLR (4th) 161 (Ontario Court of Appeal 1991) ��606–7
Canadian Aero Service Ltd v O’Malley (1973) 40 DLR (3d) 371 (Supreme Court of Canada)�� 585
FRANCE
CA [Court of Appeal] Aix-en-Provence, 18 June 1975 (Entreprise J Lefebvre)
(1976) Revue Trimestrielle Droit Commerciale 370�� 881
CA Limoges, 21 November 1963, Recueil Dalloz jurisprudence 1964, 219�� 526
CA Paris, 10 September 1999 (12/1999) Revue de jurisprudence de droit des affairs (RJDA) 1345�� 875
CA Paris, 22 March 2002 (8-9/2002) Revue de jurisprudence de droit des affairs (RJDA)�� 901
CA Paris, 22 May 1965 (Fruehauf), JCP 1965, II, no 14274 bis, Recueil Dalloz 1968, 147�� 271
CA Paris, Crim, 4 February 1985, no 84-91581 (Rozenblum)�� 272
CA Paris, 11 June 1987, Bull. Joly Sociétés 1987, 719��289–90
CA Paris, 17 October 2003, Bull. Joly Sociétés 2004, 224�� 571
CA Paris, 19 December 2000, RJDA 4/01, no 457��659–60
CA Paris, 21 February 2003, Droit des sociétés 2004�� 520
CA Paris, 27 February 1997, Bull. Joly 1997, 573, no 227�� 637
CA Paris, 4 February 1994 (Leguay c/FNB), Bull. Joly Sociétés 1994, 402�� 550
CA Paris, 4 June 2003, Bull. Joly Sociétés 2003, 1315�� 571
CA Paris, 6 December 2000, Bull. Joly Sociétés 2001, 417��438–39
CA Paris, 8 March 1958, Recueil Dalloz jurisprudence 1958, 342 �� 549
CA Versailles, 19 May 2011, Bull. Joly Sociétés 2011, 597�� 530
CA Versailles, 20 June 2006, Bull. Joly 2006, 1424, no 292�� 637
CA Versailles, 7 September 2007, Revue des sociétés 2007, 637�� 519
Cass civ [Supreme Court, civil matters], 1 June 2011, decision no 10-18143, Bull. Joly Sociétés 2011, 860��673–74
Cass civ, 12 November 2015, no 14-23716, Revue des sociétés 2016, 526�� 636
Cass civ, 4 June 1946 (Sté de teinturerie c/Motte), JCP 1947, II, 3518�� 361
Cass civ, 8 July 2015, no 13-14348 (Sté Bruxys), Bull. Joly Sociétés 2015, 643 �� 637
Cass com [Supreme Court, commercial matters], 1 April 1997, Bull. Joly Sociétés 1997, 650�� 472
Cass com, 1 July 2003, no 99-19328, Bull. Joly Sociétés 2003, 1137�� 636
Cass com, 10 February 2009, JCP E 2009, 1602�� 526
Cass com, 12 February 2002 (Etablissements Darrès), Revue des sociétés 2002, 702 ��599–600
Cass com, 12 January 1976, Revue des sociétés 1976, 330��638–39
xvi
xviii Table of Cases

Cass com, 12 July 2005, Rev. sociétés 2006, 162�� 315
Cass com, 13 February 1996, Bull. civ. IV, no 50, 38�� 315
Cass com, 14 May 2013, Bull. civ. IV, no 80��453–54
Cass com, 15 July 1992, no 90-17216 (Sté Tapisseries de France), Revue des sociétés 1993, 400�� 638
Cass com, 15 June 1993, Revue des sociétés 1993, 806��573–74
Cass com, 15 June 2010, Bull. Joly Sociétés 2010, 814��573–74
Cass com, 15 November 2011 (DL finances), Bull. Joly Sociétés 2012, 112�� 599–600, 678
Cass com, 15 November 2011, case no 10-20544 ��453–54
Cass com, 17 December 2002 (SARL Marquette Hellige c/Brousse),
Bull. Joly Sociétés 2003, 307��438–39
Cass com, 17 January 1984, Bull. civ. IV, no 21��362–63
Cass com, 18 February 1997 (Sté Dassault), Bull. Joly Sociétés 1997, 408�� 472–73, 688–90
Cass com, 18 May 2010, no 09-14855, Bull. Joly Sociétés 2000, 651�� 438
Cass com, 2 July 1985 (Cointreau), JCP E 1985, 14758 ��332–33
Cass com, 2 June 1992, Revue des sociétés 1992, 750��362–63
Cass com, 2 November 2005, no 02-15895��289–90
Cass com, 20 February 1978, Revue des sociétés 1978, 746��361–62
Cass com, 20 March 2012, no 11-13534��438–39
Cass com, 20 May 2003 (Sté d’application de techniques de l’industrie (SATI)),
Bull. Joly Sociétés 2003, 786�� 526
Cass com, 20 November 2007, no 06-16933��289–90
Cass com, 21 January 1970 (Saupiquet-Cassegrain) JCP 1970, II, no 16541, note B Oppetit�� 271
Cass com, 22 April 1976 (Langlois et Peters), Revue des sociétés 1976, 479�� 636
Cass com, 22 May 2001, no 98-19086 (Sté Exploitation du Château Giscours),
Bull. Joly Sociétés 2001, 1003 �� 637
Cass com, 22 November 2005 (Sté Eurodirect marketing c/Pfeiffer), RTD com. 2006, 445�� 476, 875
Cass com, 23 June 1998, JCP E 1998, 29�� 522
Cass com, 23 June 2009, Bull. Joly Sociétés 2009, 1094 �� 526
Cass com, 24 April 1990 (Cointreau), Bull. Joly 1990, 511 no 134��332–33
Cass com, 24 February 1998, Bull. Joly Sociétés 1998, 813�� 467
Cass com, 25 April 2006 (Compagnie européenne d’opérations immobilières BIE c/Le
Floch, épouse Boennec), Revue des sociétés 2006, 818��570–71
Cass com, 25 March 1997, Bull. Joly Sociétés 1997, 799��521–22
Cass com, 25 October 2011 (Sté Sorim), Bull. Joly Sociétés 2012, 243�� 522, 575
Cass com, 27 February 1996 (Vilgrain), JCP E 1996, II, 838�� 472–73, 686–87
Cass com, 27 June 2006, Recueil Dalloz 2006, 1892, note A Lienhard��289–90
Cass com, 27 October 2009, Revue de Jurisprudence de Droit des Affaires 21/09, inf 23 no 3 ��646–47
Cass com, 27 September 2017, no 15-28835, Revue des sociétés 2018, 1211 ��712–13
Cass com, 28 April 1998, Bull. Joly Sociétés 1998, 888�� 526
Cass com, 28 June 2005 (Sté Total Fina Elf c/Sté KPMG), JCP E 2005, 1325��476, 687–90
Cass com, 28 September 2010, Droit des sociétés 2011, no 225 ��527–28
Cass com, 29 April 1997 (Sogénal), Droit des sociétés 1997, no 114 ��659–60, 668
Cass com, 3 January 1985, Bull. civ. IV, no 6 ��453–54
Cass com, 3 January 1995 (Nasa Electronique), Bull. Joly Sociétés 1995, 432��521–22
Cass com, 30 March 2010 (Crédit Martiniquais), Revue des sociétés 2010, 304��522–23
Cass com, 30 November 2004, no 01-16581 (Sté Champagnes Giesler), Bull.
Joly 2005, 241, no 42�� 634, 637
Cass com, 4 December 2012, no 11-25408 (Sté La Compagnie du Vent), Revue des sociétés 2013, 150 ��638
Cass com, 4 February 2014, no 12-29348, Bull. Joly 2014, 302��638–39
Cass com, 4 July 2006, Recueil Dalloz 2006, 1958�� 526, 875
Cass com, 4 June 1966, Bull. civ. III, no 284��361–62
Cass com, 4 October 1994, SAICO c/SARL Péronnet, JCP E 1994, no 48) �� 601
Cass com, 5 February 1974, Bull. civ. IV, no 51��453–54
xi
Table of Cases xix

Cass com, 6 July 1983, no 82-12910, Bull. civ. IV, no 206�� 437
Cass com, 6 June 2000, Revue de jurisprudence de droit des affaires 2000, no 868��289–90
Cass com, 6 June 2001, Lamy soc. com. 2002, no 144��599–600
Cass com, 7 June 1994 (Dallest c/SARL PRO SI DEX), Bull. Joly Sociétés 1994, 1232�� 599
Cass com, 8 February 2005 (2005) Bull. Joly §193, 855 �� 875
Cass com, 8 July 2009 (Sté Havas c/Hérail), Revue des sociétés 2009, 823��573–74
Cass com, 8 October 2002 (Mme Tassel c/Sté Nordatec), JCP E 2003, no 317��332–33
Cass com, 9 March 1993, no 91-14685 (Flandin), JCP E 1993, II, 448��638–39
Cass com, 9 March 2010 (Gaudriot), Revue des sociétés 2010, 230��473, 525–26
Cass com, 9 May 2001, Droit et Patrimoine 2002, 98�� 526
Casscom, 29 February 2000,case no 96-15827��878–81
Cass com, 26 April 2000, case no 97-12544 of��882–83
Cass com, 10 February 2009, appeal no 07-20445 (Société de gestion Pierre Cardin
c/Société MMS International)�� 526
Cass com, 24 February 1998, appeal no 96-12638 (SA PIC c/Kopcio)��598–602
Cass crim [Supreme Court, criminal matters], 11 January 1996, Revue des sociétés 1996, 586�� 530
Cass crim, 12 December 1994, Bull. Joly Sociétés 1995, 427�� 575
Cass crim, 12 December 2000 (Sté Testut), Rev. sociétés 2001, 323��472, 712–13
Cass crim, 12 December 2000, Bull. Joly Sociétés 2001, 497��472, 532–33
Cass crim, 12 September 2001, Droit des sociétés 2002, no 6�� 529
Cass crim, 14 November 2007, Revue des sociétés 2008, 159�� 530
Cass crim, 16 December 2009, JCP E 2010, 1993, no 1 ��679–81, 713
Cass crim, 16 February 1999, JCP E 1999, 1633 ��532–33
Cass crim, 17 October 2007, BRDA 2007, 3�� 530
Cass crim, 19 August 1997, Bull. Joly Sociétés 1998, 36�� 550
Cass crim, 2 April 2003, Bull. Joly Sociétés 2003, 929��532–33
Cass crim, 20 September 2000, Revue de jurisprudence de droit des affaires 2001, no 38��289–90
Cass crim, 22 September 2004 (Sté Sunn SA), Bull. Joly Sociétés 2005, 45�� 529
Cass crim, 25 October 2006, Bull. Joly Sociétés 2007 (Sté Lambda/Matra-Hachette), 243�� 529
Cass crim, 26 September 2001, Bull. Joly Sociétés 2002, 74�� 530
Cass crim, 30 May 1994, Bull. Joly Sociétés 1994, 1205 �� 530
Cass crim, 31 January 2007 (Elf), Revue des sociétés 2007, 379�� 530
Cass crim, 4 February 1985 (1985) Recueil Dalloz Sirey 478 (Rozenblum) �� 880
Cass crim, 5 November 1963, Bull. crim. no 307��528–29
Cass crim, 5 November 1991, no 90-82605 (Société Industrielle et Financière Bertin),
Revue des sociétés 1992, 91�� 720
Cass crim, 7 March 2000, Bull. Joly Sociétés 2000, 720 ��532–33
Cass crim, 27 October 1997, appeal no 96-83698 (Carignon)�� 531
Cass. 3e civ. [Supreme Court, third chamber in civil matters], 11 January 2012, no 10-20633 �� 526
Cass. 3e civ., 4 January 2006, Bull. Joly Sociétés 2006, 527��527–28
T com [Commercial Tribunal] Roubaix, 26 September 1956,
Recueil Dalloz jurisprudence 1957, 10�� 549
GERMANY
BFH [Federal Fiscal Court], judgment of 26 April 1984, V R 128/79�� 547
BGH [Federal Court of Justice], judgment of 17 May 1993, BGHZ 122, 342�� 462
BGH, judgment of 1 February 1988, BGHZ 103, 183 (Linotype)��627–30
BGH, judgment of 20 March 1995, BGHZ 129, 136 (Girmes) ��630–34
BGH, judgment of 25 February 1982, BGHZ 83, 122 (Holzmüller)�� 354–59, 688–90
BGH, judgment of 09.03.1981—II ZR 54/80, BGHZ 80, 129 ��188–90
BGH, judgment of 16/07/2007–II ZR 3/04 (Trihotel)��846–49
x
xx Table of Cases
BGH, judgment of 18/10/2010 –II ZR 151/09�� 917
BGH, judgment of 27.01.1997—II ZR 123/94, BGHZ 134, 333 ��188–90
BGH, judgment of 28/04/2008–II ZR 264/06 (2008) NZG 547��849, 850–51
BGH, judgment of 29 January 2001, II ZR 331/00, BGHZ 146�� 20
BGH, judgment of 8 June 2009, II ZR 111/08 ��148–49
BGH, judgment of 8 October 2009, IX ZR 227/06, (2009) NJW 289��151–52
BGH, judgment of 9 October 2006, II ZR 303/05�� 917
BGH, judgment of 14 November 2005, II ZR 178/03��851–53
BGH, judgment of 13 December 2004, II ZR 206/02 (Autohändler), (2005) ZIP 117��844–45
BGH, judgment of 13 December 2004, II ZR 256/02 (Unterschlagung) (2005) ZIP 250 ��844–45
BGH, judgment of 5 February 2007, II ZR 51/06, [2007] NJW-RR 1490��915–16
BGH, judgment of 19 December 2017, II ZR 88/16,��914–15
BGH, judgment of 15 February 2012, IV ZR 194/09,�� 943
BGH, judgment of 18 September 2006, BGHZ 169, 98 (WMF)��646–47
BGH, judgment of 21 April 1997, BGHZ 135 (ARAG/Garmenbeck) �� 467
BGH, judgment of1 December 2008–II ZR 102/07 (2009) NJW 850�� 813
BVerfG [Federal Constitutional Court], judgment of 9 October 2002, BVerfGE 106, 28��3-18
BVerfG, judgment of 11 July 2012, BVerfGE 132, 99 �� 379
OLG [Higher Regional Court] Düsseldorf, decision of 9 December 2009 (IKB)�� 509
OLG München, judgment of 10 May 2012, 14 U 2175/11��566–67
OLG München, judgment of 9 February 2009, 21 U 4853/08�� 566–67, 568–69
OLG Saarbrücken, judgment of 11 October 2012, 8 U 22/11-6 ��566–67
RG [Imperial Court], decision from 1901, RGZ 49, 77 ��433–34
VG [Administrative Court] Frankfurt am Main, judgment of 8 July 2004, 1 E 7363/ 03 (I) �� 508–9
NEW ZEAL AND

Coleman v Myers [1977] 2 NZLR 225 (New Zealand)��468–69
Daniels v Anderson (1995) 16 ACSR 607�� 535
UNITED KINGD OM
A Company (No 004415 of 1996), Re [1997] 1 BCLC 479��617–18
A Company (No 005136 of 1986), Re [1987] BCLC 82 ��364–65
A Company (No. 006834 of 1988), Ex parte Kremer, In re [1989] B.C.L.C. 36�� 614
AA Mutual International Insurance Co Ltd, Re [2004] EWHC 2430 (Ch)�� 954
AAA and Others v Unilever Plc, Unilever Tea Kenya Ltd [2018] EWCA Civ 1532�� 872
Aas v Benham [1891] 2 Ch. 244�� 581, 582, 583–84
Aberdeen Railway Company v Blaikie Bros [1854] 1 Macq 461��466–67, 553, 565–66, 568–69, 576
Adams v Cape [1990] Ch 433�� 854, 855, 858–59
Airey v Cordell [2007] EWHC 2728 (Ch); [2007] B.C.C. 785�� 694
Alexander Ward v Samyang [1975] 1 WLR 673��679–81
Al-Nakib Investments v Longcroft [1990] 3 All ER 321�� 688
Allen v Gold Reefs of West Africa Ltd [1900] 1 Ch 656�� 439–40, 606–9
Allied Business & Financial Consultants Ltd (O’Donnell v Shanahan), Re [2009] BCC 822��583, 594–95
Antonio Gramsci Shipping Corporation v Lembergs [2013] EWCA Civ 730�� 860
Antonio Gramsci Shipping Corporation v Stepanovs [2011] EWHC 333 (Comm)�� 856
APCOA Holdings GmbH, Re [2014] EWHC 3849 (Ch)��940–42, 943
APCOA Parking Holdings GmbH, Re [2014] EWHC 1867 (Ch)��940–42
APCOA Parking Ltd, Re [2014] EWHC 997 (Ch)��940–42
Arbuthnot Leasing International Ltd v Havelet Leasing Ltd (No 2) [1990] BCC 636�� 868
Ashbury Railway Carriage and Iron Co Ltd v Riche (1875) LR 7 HL 653��35, 197–201
xxi
Table of Cases xxi

Ashbury Railway Carriage and Iron Company v Riche [1874-80] All ER Rep Ext 2219��58–59
Atlantic Computer Systems Plc, Re [1992] Ch 505 (Nicholls LJ) ��955, 982–83
Atlas Maritime Co SA v Avalon Maritime Ltd [1991] 1 Lloyd’s Rep 563��815–16
Automatic Self-Cleansing Filter Syndicate Co Ltd v Cunninghame [1906] 2 Ch 34338–41, 368–69, 679–81
Aveling Barford Ltd v Perion Ltd [1989] BCLC 626�� 769
Bairstow v Queens Moat Houses plc [2002] BCC 91 (CA) �� 773
Bangha Television Ltd, Re [2010] BCC 143�� 862
Bank of Credit and Commerce International SA (No 3), Re [1993] WL 96496��974–75
Barclays Bank plc v British & Commonwealth Holdings plc [1995] BCC 1059��777–78
Barclays Bank plc v British & Commonwealth Holdings plc [1996] 1 BCLC 1 �� 771
Barings plc and Others (No 5), Re [1999] 1 BCLC 433 (Chancery Division)�� 534–39, 717–18
Barings plc, Secretary of State for Trade and Industry v Baker, Re [1998] BCC 583�� 536
Barrett v Duckett [1995] BCC 362�� 697
Belmont Finance Corporation Ltd v Williams Furniture Ltd (No 2) [1980] 1 All ER 393 �� 779
Belmont Park Investments PTY Ltd v BNY Corporate Trustee Services Ltd and Lehman
Brothers Special Financing Inc [2011] UKSC 38��983–84
Bhullar v Bhullar [2003] BCC 711 (Court of Appeal)��577, 675–77
Bird Precision Bellows Ltd, Re [1984] Ch 419��618–19
Bluebrook Limited, Re [2010] BCC 209��958–59
Bluebrook Limited, Re [2009] EWHC 2114 (Ch)�� 975
Bluecrest Mercantile BV v Vietnam Shipbuilding Industry Group and Others
[2013] EWHC 1146 (Comm)�� 940–42, 958–59
Blyth v The Company of Proprietors of the Birmingham Waterworks (1856) 11 Ex 781��473–74
BNY Corporate Trustee Services Limited et al v Eurosail-UK 2007-3BL plc [2013] UKSC 28 ��911–13
Bolton (Engineering) Co Ltd v Graham & Sons [1957] 1 QB 159 ��59–60
Borland’s Trustee v Steel Brothers & Co [1901] 1 Ch 279 �� 232
Boulting v Association of Cinematograph, Television and Allied Technicians [1963] 2 QB 606�� 348, 556
Bradford Investments plc, Re [1991] BCLC 224 ��386–87
Brady v Brady [1989] AC 755 (HL)��778–79
Bray v Ford [1896] AC 44��559–60, 577
Braymist Ltd v Wise Finance Co Ltd [2002] 1 BCLC 415 ��186–87
Brazilian Rubber Plantations and Estates, Re [1911] 1 Ch 425��473–74, 476
Breckland Group Holdings v London & Suffolk Properties (1988) 4 BCC 542 ��340–41, 348
Brenfield Squash Racquets Club Ltd, Re [1996] 2 BCLC 184 ��618–19
Brian D Pierson (Contractors) Ltd, Re [1999] BCC 26�� 862, 864
Bridge v Daley [2015] EWHC 2121�� 697
Bristol and West Building Society v Mothew [1998] Ch 1�� 466–67, 606, 688
British Eagle International Airlines Ltd v Compagnie Air France [1975] 1 WLR 758��983–84
Britoil Plc, Re (unreported) ��658–59
Brown v British Abrasive Wheel Co Ltd [1919] 1 Ch 290 ��607–8, 667
Buchler v Talbot [2004] 2 AC 298��981–82
Buchler v Talbot [2004] 2 WLR 582 ��866–67
Bugle Press, Re [1961] Ch 270��658–59
Burn v London and South Wales Coal Co (1890) 7 TLR 118 �� 333
Bushell v Faith [1970] AC 1099 (House of Lords)��386–87, 449–52, 987
Butters and Others v BBC Worldwide Ltd and Others [2009] EWHC 1954 (Ch)��983–84
Buttle v Saunders [1950] 2 All ER 193�� 383
Canada National Fire Insurance Co v Hutchings [1918] AC 451 (PC) �� 59
Cane v Jones [1980] 1 WLR 1451��340–41
Cayne v Global Natural Resources plc (unreported) (12 August 1982)��371–72
Central Estates (Belgravia) Ltd v Woolgar [1972] 1 QB 48, 55 �� 697
Chandler v Cape plc [2012] EWCA Civ 525 �� 869–70, 871, 872
xxi
xxii Table of Cases

Channel Collieries Trust Ltd v Dover, St Margaret’s and Martin Mill Light Railway Co
[1914] 2 Ch 506�� 202
Charterbridge Corp. Ltd v Lloyd’s Bank Ltd [1970] Ch 62�� 514
Charterhouse Capital Ltd, Re [2015] EWCA Civ 536��609, 610, 667
Charterhouse v Tempest Diesels (1985) 1 BCC 99��777–78
Chartmore Ltd, Re [1990] BCLC 673 ��743–44
Chaston v SWP Group Ltd [2003] 1 BCLC 675 (CA)��777–78
Chez Nico (Restaurants) Ltd, Re [1991] BCC 736��658–59
City Equitable Fire Insurance Company Ltd, Re [1925] Ch 407 (Chancery Division) ��475–77
Clydebank Football Club Ltd v Steedman 2002 SLT 109�� 771
CMS Dolphin Ltd v Simonet [2002] BCC 600��585–86
Colin Gwyer and Associates Ltd v London Wharf [Limehouse] Ltd [2003] 2 BCLC 153��468–69, 903
Connelly v RTZ Corporation Plc [1998] AC 854 ��868–69
Constable v Executive Connections Ltd [2005] EWHC 3 ��606–7
Continental Assurance Co of London Plc (No 4), Re (2001) WL 720239��863, 864, 867
Conway v Petronius Clothing Co [1978] 1 WLR 72�� 333
Cook v Deeks [1916] 1 AC 554 (Privy Council)�� 556, 557–58, 586
Cotronic (UK) Ltd v Dezonie [1991] BCC 200��185–87
Cotter v National Union of Seamen [1929] 2 Ch 58�� 692
Cowan v Scargill [1985] Ch 270�� 383
Creasey v Breachwood Motors [1992] BCC 638�� 861
Criterion Properties plc v Stratford UK Properties LLC [2002] EWHC 496 (Ch); reversed
[2002] EWCA Civ 1783 (Court of Appeal)��371–72
Cullen Investments Ltd v Brown [2015] BCC 539�� 696, 697
Customs and Excise Commissioners v Barclays Bank [2007] 1 AC 181 �� 870
CVC/Opportunity Equity Partners Ltd v Demarco Almeida [2002] BCC 684��618–19
D’Jan of London Ltd, Re [1993] BCC 646�� 478
Dafen Tinplate Co Ltd v Llanelly Steel Co (1907) Ltd [1920] 2 Ch 124��607–8
Daniels v Daniels [1978] Ch 406�� 692
DAP Holdings NV, Re [2005] EWHC 20192 (Ch) ��940–42
Derry v Peek (1889) LR 14 App Cas 337�� 688
DHN Food Distributors Ltd v Tower Hamlets London Borough Council [1976] 1 WLR 852��853–54
DKG Contractors Ltd, Re [1990] BCC 903�� 862
DKLL Solicitors v Revenue and Customs Commissioners [2007] BCC 908��956–57
Dorchester Finance Co v Stebbing [1989] BCLC 498�� 478
Dovey v. Cory [1901] AC 477��533–34
Drax Holdings Ltd, Re [2003] EWHC 2743 (Ch)��940–42
Duomatic Ltd, Re [1969] 2 Ch 365 ��340–41
Eastwood v Magnox Electric Plc [2004] UKHL 35��223–24
Ebrahimi v Westbourne Galleries Ltd [1973] AC 360�� 616
Eckerle v Wickeder Westfalenstahl GmbH [2013] EWHC 68 (Ch)��410–11
Edmunds v Brown and Tillard [1669] 1 Lev 237�� 50
Edwards v Halliwell [1950] 2 All ER 1064 ��691–92
EIC Services Ltd v Phipps [2004] EWCA Civ 1069��203–5
EIC Services Ltd v Phipps [2005] 1 WLR 1377��795–96
Elgindata Ltd, Re (1991) BCLC 959��618–19
Ernest v Nicholls (1875) 6 HL Cas 401�� 9–10
Evans v Rival Granite Quarries Ltd [1910] 2 KB 979 �� 905
Exchange Banking Co, Flitcroft’s case, Re (1882) 21 Ch D 519 (CA) (Jessel MR) �� 732
Ferguson v Wilson (1866) LR 2 Ch App 77��9–10, 196
Folgate London Market Ltd (formerly Towergate Stafford Knight Co Ltd) v Chaucer
Insurance Plc [2011] EWCA Civ 328��983–84
xxi
Table of Cases xxiii

Forest of Dean Coal Mining Co, Re (1878) 10 Ch D 450��466–67
Foss v Harbottle (1843) 2 Hare 461��74, 364–65, 468, 686–87, 691–93, 696–97, 703–4, 714
Franbar Holdings Ltd v Patel [2008] EWHC 1534 (Ch); [2008] B.C.C. 885�� 372, 694, 695–96
Fraser v Oystertec plc [2004] BBCC 233�� 264
Freeman & Lockyer (a firm) v Buckhurst Park Properties (Mangal) Ltd [1964] 2 QB 480��212–13
Fulham Football Club Ltd v Cabra Estates plc [1992] BCC 863�� 348
Gaiman v National Association for Mental Health [1971] Ch 317��262–63, 371
Gaussen v Morton (1830) 10 B & C 731��339–40
George Newman & Co Ltd, In re [1895] 1 Ch 674 �� 771
Giles v Rhind [2003] Ch 618��688–90
Goldsmith v Sperrings Ltd [1977] 1 WLR 478�� 697
Great Eastern Ry Co v Turner (1872) LR.8 Ch 149, 152��466–67
Greenhalgh v Ardene Cinemas Ltd [1951] Ch 286�� 609
Guilford Motor Co Ltd v Horne [1933] Ch 935��854, 859–60
H. R. Harmer Ltd, In re [1959] 1 W.L.R. 62�� 613
Halket v Merchant Traders’ Ship, Loan & Insurance Association (1849) 13 QB 960�� 51
Hallmark’s Case, 25 Ch D 752 ��472–73
Halt Garage (1964) Ltd, Re [1982] 3 All ER 1016��617–18, 769
Hans Brochier Ltd v Exner [2006] EWHC 2594��939–40
Harborne Road Nominees Ltd v Karvaski [2011] EWHC 2214 �� 618
Hawk Insurance Co Limited, Re [2002] BCC 300��958–59
Hedley Byrne v Heller & Partners Ltd [1964] AC 465 �� 872
Heiton v Waverley Hydropathic Co Ltd (1877) 4 R 830�� 202
Hellas Telecommunications (Luxembourg) II SCA, Re [2009] EWHC 3199 (Ch)��939–40
Hely-Hutchinson v Brayhead Ltd [1968] QB 549�� 212
Henry Head & Co Ltd v Ropner Holdings Ltd [1952] 1 Ch 124��744–45
Heron International Ltd v Lord Grade [1983] BCLC 244 ��688–90
Hilder v Dexter [1902] AC 474 (HL)��732, 744–45
Hogg v Cramphorn Ltd [1967] Ch 254��365–67, 370, 371–72, 375, 797–98
Howard Smith Ltd v Ampol Petroleum Ltd [1974] AC 821�� 365–66, 367–72, 375–76, 608, 797–98
Hutton v West Cork Railway Co (1883) 23 Ch D 654��262–63
Hydrodan (Corby) Ltd, Re [1994] BCC 161��288–89
Hydrom Ltd, Re [1994] 2 BCLC 180��862–63
Iesini v Westrip Holdings Ltd [2010] BCC 420 (Chancery Division)��693–98
Imperial Mercantile Credit Association v Coleman (1870–71) L.R. 6 Ch. App. 558
(Court of Appeal)��232–33, 554, 675–77
Industrial Development Consultants Ltd v Cooley [1972] 1 WLR 443��675–77
Industrial Development Consultants Ltd v Cooley [1972] 2 All ER 162��578–79, 582
Innes & Co, Limited, In re [1903] 2 Ch 254�� 749
IRC v Gray [1994] STC 360 ��10–11
Irvine v Irvine [2006] EWHC 406��617–18
Island Export Finance Ltd v Umunna [1986] BCLC 460�� 585
Isle of Wight Railway Company v Tahourdin [1884] LR 25 Ch D 320
(Court of Appeal)�� 336–38, 339–40
It’s a Wrap (UK) Ltd (in liquidation) v Gula [2006] BCC 626 (CA)��772–73
J.E. Cade & Son Ltd, In re [1992] B.C.L.C. 213 �� 612
Jay, ex parte (1880) LR 14 (Ch D) ��983–84
JH Rayner (Mincing Lane) Ltd v Department of Trade and Industry [1989] Ch 72�� 853
Johnson v Gore Wood & Co [2002] 2 AC 1��686–87
Jones v Associated Tunnelling Co Ltd [1981] IRLR 477 (EAT)��223–24
Jones v Lipman [1962] 1 WLR 832 ��854, 859–60
Jupiter House Investments (Cambridge) Ltd, Re [1985] 1 WLR 975�� 802
xvi
xxiv Table of Cases

Kaupthing Singer & Friedlander Ltd, Re [2010] EWCH 316 (Ch)��983–84
Kayley Vending Ltd, Re [2009] EWHC 904 (Ch) ��955–56
Kaytech International Plc, Re [1999] 2 BCLC 351��862–63
Keith Spicer Ltd v Mansell [1970] 1 WLR 333 (CA)��186–87
Kelner v Baxter (1866) LR 2 CP 174��185–87
Kirby v Wilkins [1929] 2 Ch 444��410–11
Kleanthous v Paphitis [2012] BCC 676��695–96, 697
Konamaneni v Rolls-Royce Industrial Power (India) Ltd [2003] BCC 790��116–17
KR Hardy Estates Ltd, Re [2014] EWHC 4001 ��618–19
Kyrris v Oldham [2004] BCC 111��955–56
La Seda de Barcelona SA, Re [2010] EWHC 1364 (Ch)��940–42
Lagunas Nitrate Co. v. Lagunas Syndicate [1899] 2 Ch 392, 435��476–77
Lands Allotment Company, Re [1894] 1 Ch 616��466–67
Lazarus Estates Ltd v Beasley [1956] 1 QB 702��859–60
Lee v Lee’s Air Farming Ltd [1961] AC 12 �� 33
Legal Costs Negotiators Ltd, Re [1999] BCC 547 �� 611
Lehman Brothers International (Europe) (in administration), Re [2018]
EWHC 1980 (Ch)�� 940–42, 958–59
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Another random document with
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line has been conceded, but the idea is growing amongst the
French of Tonquin that, instead of diverting traffic from the
West River, a line from Langson to Lungchow and Nanning would
prove an additional feeder of the West River route.
3. From Pakhoi inland, presumably to Nanning; length, say 120

miles. The Tonquin press have pointed out that this line will
benefit English commerce more than French. It will never, in
my opinion, be built-by the French.
" German.
1. Kiao-chau-Yichow-Tsinan line; length, 420 miles. Nothing
has been done towards the construction of this line, which
does not promise commercially.
2. Tien-tsin-Chin-kiang line to be built by an Anglo-German

Company.
See Number 5 of the British Concessions.
"Belgian.
The Lu-Han or Peking-Hankow Railway. A Franco-Belgian
Syndicate have secured the Concession for this, a trunk line
of some 650 or 700 miles, passing north and south through
Chihli, Honan, and Hupeh. This railway is an old project born
of Chang-Chih-Tung's objection to building lines near the
coast, 'lest they should facilitate the access of an enemy.'
Its prospects as a commercial enterprise are not considered so
good as those of the rival Tien-tsin-Chinkiang line.
"American.
The only railway in which America is at present interested is
the trunk line projected from Hankow to Canton."
See British Concessions, Number 11.
{86}
On the 18th of December the British Minister announced to Lord
Salisbury: "An Imperial Decree, stating that no more railway
proposals will be for the present entertained by the Chinese
government, has been officially communicated to me by the
Yamên." To which the response from London was: "You should
inform the Chinese Government that Her Majesty's Government
claim, in the event of their revoking their present resolve
not to entertain any more proposals for railways, priority of
consideration by the Chinese Government of all British
applications already made." This notice was given, as
directed, and the Yamên replied to it (December 31) with some
dignity: "We have the honour to observe that the development
of railways in China is the natural right and advantage of the
Chinese Government. If, hereafter, in addition to the lines
already sanctioned, which will be proceeded with in order,
China proposes to construct other railways, she will negotiate
with the nation which she finds suitable. When the time
arrives China must use her own discretion as to her course of
action. The applications of British merchants can, of course,
be kept on record as material for negotiation at that day, but
it is not expedient to treat them as having a prior claim over
all others to a settled agreement."
Great Britain, Papers by Command:

China, Number 1, 1899, pages 164-69, 190-92, 215-16,
327, 344-47; and Number 1, 1900, page 22.
CHINA: A. D. 1898 (March).

An intelligent Chinese view of the situation of the country.
How well the situation and the dangers of their country were
understood at this period by some, at least, of the Chinese
officials, and how intelligently they considered them, may be
gathered from some passages in a memorial addressed by Viceroy
Chang Chih-tung and another high official, Sheng Hsuan-huai,
Director-General of Railways, to the Emperor, on the subject
of the construction of the Hankow-Kwangtung Railway. A
translation of the document was transmitted to London at the
end of March. The memorialists say: "The original idea was
that the construction of the Hankow-Kwangtung Southern trunk
line should be postponed for a time, but now, owing to the
exigencies of the present situation, this work must not be
delayed. The powerful foreign nations stand around watching
for their opportunity, and, making use of trivial pretexts in
the conduct of international affairs, swiftly dispatch their
war-ships from one end of the Empire to the other. It is
impossible to say when our communication by sea may be
blocked, and the establishment of internal communication by
railways has become a necessity. Kwungtung is a rich province,
and the defence of the southern territory and waterways must
not be neglected, so that the making of the Hankow-Kwangtung
line should be proceeded with at the same time as the northern
road. The original intention was to construct a road from
Kwangtung to Hupeh viâ Chiangsi, but this circuitous route is
longer than the direct route through Hunan Province, and for
many reasons it will be a source of greater prosperity and
strength to the Empire if the latter route is adopted. There
is, moreover, no doubt that the officials and merchants of the
three provinces are in favour of this scheme. The most direct
route will be to proceed viâ Ch'en-chou, Yung-chou, Feng-chou,
and Ch'ang-sha to Wuch'ang, and so to Hankow. … Now Hankow is
the central point to which all the waterways of the eighteen
provinces from north, south, east, and west converge. If
England is allowed to build the Hankow and Kwangtung road,
passing through this important point, afterwards when the
Russian line advances southward, and the English line is
continued to the north, although we shall be in possession of
the Hankow-Lü Kou-chiao line, we shall be stilled and our
profits curtailed, for, being between the other lines, we
shall not be able to defend our own. It is also greatly to be
feared that our own line would pass into either English or
Russian hands. In this case not only is our throat stopped by
the foreigners being in possession of our ports, but our vital
parts are injuriously affected. Should we wish to raise and
drill soldiers, make arms, or obtain funds for the necessities
of the Empire, it will be impossible, and China not only will
not make progress, but we fear she will barely be able to
maintain her independence.
"Your memorialists are distressed when they consider the

extreme danger of the situation, but they think that the best
method of meeting it is to proceed ourselves at once with the
construction of the Hankow-Kwangtung Railway. Should it be
made by degrees, starting from Kwangtung through Hunan to
Hankow, it will be seized forcibly before completion, and we
fear sufficient funds cannot be raised for hurrying forward
its construction. Your memorialist, Sheng, had the intention
of employing American capital for the construction of the Lü
Kou-chaio-Hankow line, but afterwards when the American,
Washburn, came to China, his conditions were found to be too
hard, and consequently negotiations were broken off. Your
servant was thus constrained to approach Belgium. By acting
thus our privileges would not be lost, nor would ill
consequences follow. But Belgium is a small country, and her
strength is inconsiderable, and often she has pointed out that
an unfinished railroad is hardly a sufficient guarantee for
the loan. Consequently she is very undecided, but we have
hopes that by the adoption of some compromise terms may be
arrived at, though the question is extremely difficult. Thus
another scheme must be adopted for raising the capital for the
southern line. There are grave objections to allowing either
England, France, or Germany to undertake the work, and your
memorialists suggest that Wu Ting-fang, the Minister at
Washington, should be communicated with. He is a Cantonese,
and will not fail to do his best to find a scheme."

China, Number 1, 1899,pages 87-89.
CHINA: A. D. 1898 (March-July).

Russian acquisition of Port Arthur and Talienwan.
Ineffectual British opposition.
Consequent British demand for Wei-hai Wei.
Its lease by China.
While the British Minister at Peking was securing these

assurances from the Tsung-li Yamên, concerning the
non-alienation of the Yang-tsze region and the opening of
inland waters to steam navigation, the Russian Minister was
equally busy, extorting a cession or lease of Port Arthur and
Talienwan, with privileges of railway construction through
neighboring territory which gave immense value to those
acquisitions. The probability of his success was soon known to
the British authorities, who made no serious objection to the
leasing of Talienwan, but were strongly opposed to a Russian
occupation of Port Arthur.
{87}
On the 22d of March, 1898, Lord Salisbury wrote to the British
Ambassador at St. Petersburg: "Her Majesty's Government on
their part would not regard with any dissatisfaction the lease
by Russia of an ice-free commercial harbour, connected by
rail with the trans-Siberian Railway which is now under
construction. Questions of an entirely different kind are
opened if Russia obtains control of a military port in the
neighbourhood of Peking. Port Arthur is useless for commercial
purposes, its whole importance being derived solely from its
military strength and strategic position, and its occupation
would inevitably be considered in the East as a standing
menace to Peking and the commencement of the partition of
China."
On the 28th of March he wrote again: "Port Arthur is not a

commercial harbour. It is doubtful whether it could be
converted into one. It is certain that, even if such a project
were possible, it could never be worth while for the owners or
lessees of Talienwan to embark upon it. But though not a
commercial harbour, Port Arthur supplies a naval base, limited
indeed in extent, but possessing great natural and artificial
strength. And this, taken in connection with its strategic
position, gives it an importance in the Gulf of Pechili and
therefore at Peking, upon which, in their representations to
Japan at the close of the war with China, the Russian
Government laid the greatest emphasis. It is from this last
point of view that the occupation of Port Arthur chiefly
concerns Her Majesty's Government. It is not because a
position which can easily be made a naval arsenal of great
strength has been acquired by Russia that they regret its
occupation by that Power. It is because the possession, even
if temporary, of this particular position, is likely to have
political consequences at Peking of great international
importance, and because the acquisition of a Chinese harbour
notoriously useless for commercial purposes by a foreign Power
will be universally interpreted in the Far East as indicating
that the partition of China has begun.
"As regards the second of these reasons nothing further need

be said, inasmuch as Her Majesty's Government understand from
Count Mouravieff's communication to you that this result is as
little desired by the Russian Government as it is by that of
Her Majesty. As regards the first, it may perhaps be proper to
observe that a great military Power which is coterminous for
over 4,000 miles with the land frontier of China, including
the portion lying nearest to its capital, is never likely to
be without its due share of influence on the councils of that
country. Her Majesty's Government regard it as Most
unfortunate that it has been thought necessary in addition to
obtain control of a port which, if the rest of the Gulf of
Pechili remains in hands so helpless as those of the Sovereign
Power, will command the maritime approaches to its capital,
and give to Russia the same strategic advantage by sea which
she already possesses in so ample a measure by land. Her
Majesty's Government have thought it their duty thus to put on
record their grave objections to the occupation of Port Arthur
by Russia."
Before this despatch was written, Lord Salisbury already knew
that his remonstrances had failed and that Russia was to
possess Port Arthur, and he had cabled, March 25, the
following instructions to Sir Claude MacDonald, the British
Minister to Peking: "Balance of power in Gulf of Pechili is
materially altered by surrender of Port Arthur by Yamên to
Russia. It is therefore necessary to obtain, in the manner you
think most efficacious and speedy, the refusal of Wei-hai Wei
on the departure of the Japanese. The terms should be similar
to those granted to Russia for Port Arthur. British fleet is
on its way from Hong Kong to Gulf of Pechili." The day
following, Lord Salisbury advised the British Ambassador at
Berlin by telegram: "Her Majesty's Government have demanded a
reversionary lease of Wei-hai Wei, and it is possible that the
German Government will address you with regard to our
occupying territory which forms part of the Province of
Shantung. Should this be the case, you are authorized to
explain that Wei-hai Wei is not at present, and cannot, we
believe, be made a commercial port by which access can be
obtained to any part of the province. We do not wish to
interfere with the interests of Germany in that region. The
action, in our opinion very regrettable, of Russia with
respect to Port Arthur, has compelled us to take the course we
are now pursuing."
On the 29th of March the completion of the transaction by

which China transferred Port Arthur and Talienwan to Russia
was officially announced at St. Petersburg by the following
publication in the "Official Messenger": "At Peking on the
15th (27th) March a special Agreement was signed by the
Plenipotentiaries of Russia and China, by virtue of which
Ports Arthur and Talienwan, with the corresponding territory
and waters, have been ceded to the Imperial Government for
twenty-five years—which period, by mutual agreement, may be
still further prolonged—and the construction allowed of
branches of railways in order to connect these ports with the
main Great Siberian line. This Agreement is a direct and
natural outcome of the friendly relations between great
neighbouring Empires, all of whose endeavours should be
directed towards the preservation of tranquillity along the
vast extent of their neighbouring possessions for the common
benefit of the people of both of them. The peaceful
occupation, by the diplomatic Agreement of the 15th March, of
the ports and territory of a friendly nation shows, in the
best possible way, that the Government of China truly
appreciates the meaning of the Agreement established between
us.
"Securing the inviolability of the sovereign rights of China,

and satisfying the daily requirements of Russia in her
capacity of a great and neighbouring naval Power, this
Agreement can in no way insure [injure?] the interests of any
other foreign Power; on the contrary, it gives to all nations
of the world the possibility in the near future of entering
into communication with this hitherto closed-up country on the
coast of the Yellow Sea. The opening to the commercial fleets
of all foreign nations of the port of Talienwan creates in the
Pacific Ocean a new and extended centre for the commercial and
trading undertakings of those nations, especially by means of
the Great Siberian line, henceforth to be taken into account,
and which, thanks to the friendly Treaty between Russia and
China, will unite the extreme ends of the Old World. Thus, the
Agreement signed at Peking has for Russia a deep historical
signification, and must be joyfully welcomed by all to whom
happy peace and successes, based on the mutual understandings
of nations, are dear."
{88}
On the 3d of April, Sir Claude MacDonald was able to announce

by cable to Lord Salisbury: "Yamên agreed yesterday to the
following arrangement: China will lease Wei-hai Wei to Great
Britain on the same terms as Port Arthur has been leased to
Russia, but Great Britain agrees not to take possession of the
place until it has been given up by Japan. The lease will
continue until Russia ceases to occupy Liaotung Peninsula.
Details are left for subsequent adjustment." Negotiations
relative to the terms of the lease of Wei-hai Wei were
protracted until the first of July, when the Convention
determining them was signed at Peking. Its provisions were as
follows: "The territory leased shall comprise the Island of
Liu-kung and all islands in the Bay of Wei-hai Wei, and a belt
of land 10 English miles wide along the entire coast line of the
Bay of Wei-hai Wei. Within the above-mentioned territory
leased Great Britain shall have sole jurisdiction. Great
Britain shall have, in addition, the right to erect
fortifications, station troops, or take any other measures
necessary for defensive purposes, at any points on or near the
coast of the region east of the meridian 121° 40' east of
Greenwich, and to acquire on equitable compensation with that
territory such sites as may be necessary for water supply,
communications, and hospitals. Within that zone Chinese
administration will not be interfered with, but no troops
other than Chinese or British shall be allowed therein. It is
also agreed that within the walled city of Wei-hai Wei,
Chinese officials shall continue to exercise jurisdiction
except so far as may be inconsistent with naval and military
requirements for the defence of the territory leased. It is
further agreed that Chinese vessels of war, whether neutral or
otherwise, shall retain the right to use the waters herein
leased to Great Britain. It is further understood that there
will be no expropriation or expulsion of the inhabitants of
the territory herein specified, and that if land is required
for fortifications, public officers, or any official or public
purpose, it shall be bought at a fair price."

China, Number 1, 1898, and Number 1, 1899.
CHINA: A. D. 1898 (April-July).

Charges of corruption against Li Hung-chang and
the Tsung-li Yamên.
"One of the censors of highest rank memorialised the Emperor

early in April, accusing the whole Tsung-li Yamên of being in
Russian pay, and alleging that the sum of 10,000,000 taels was
paid to them. He also stated that Li Hung-chang had secured
from Russia 1,500,000 taels, and he prayed for a full inquiry
and for the decapitation of Li Hung-chang if the accusation
were proved, or if he were found guiltless, he himself should
be decapitated. Li Hung-chang was dismissed on September 6,
but afterwards in November was appointed an imperial
commissioner to report on the inundations of the Yellow River,
an unwelcome post. … A Black Flag rebellion in the southern
province of Kwang-si, in which the secret society called The
Triads was said to be concerned, was giving the Pekin
Government great anxiety in July. The rebels, numbering about
40,000, were for a time victorious and seemed determined to
overthrow the dynasty."
Annual Register, 1898, pages 333-334.
CHINA: A. D. 1898 (April-August).

France in the field with demands.
New demands from Great Britain.
France had now come forward to seize a place in the attacking

line, preparatory to what seemed to be the impending partition
of China. On the 12th of April, Sir Claude MacDonald cabled to
Lord Salisbury the following despatch: "I had an interview
with the Yamên yesterday, at which they informed me that
China, had acceded to the following demands on the part of
France:
1. Kwangchow Wan [in the Lei-chau peninsula, on the southern

coast, near Tonquin] to be leased as a coaling-station to
France.
2. The right to construct a railway to Yünnan-fu from the
Tonquin frontier.
3. The promise not to alienate any territory in the three

provinces of Kwangtung, Kwangsi, and Yünnan, which border on
the French frontier.
4. The Chinese Government agree that if ever they constitute a

Postal Department independent of the maritime customs, and if
a European is to be appointed as Director thereof, France
shall have an equal right with that of other Powers to
nominate a candidate for the post of Director.
The Chinese Government are willing—
1. To lease us as much additional territory on Kowloon

promontory [opposite Hong Kong], exclusive of Kowloon city, as
is required for military and naval purposes.
2. The Yamên state that China is quite willing to allow the

extension into Yünnan of the Burmah Railway."
On the 13th, Mr. Balfour, in the absence of Lord Salisbury,

cabled from London in reply: "Inform Yamên that, although they
have not followed our advice, we are anxious to maintain, as
far as possible, integrity of China, and will, therefore, not
make new territorial demands upon them. It is, however,
absolutely necessary, if we are to pursue this policy, that
they, on their side, should first immediately conclude
negotiations—
(a) for giving us an the land required for military defences

of Hong Kong;
(b) to fulfil their promise to make Nanning a Treaty port;

(c) to give some railway concession;
(d) an agreement as to the non-alienation of Kuang'tung and

Yünnan.
In connection with condition (d), it is in the interests of

the integrity of China, and is justified by the proximity of
Yünnan to Burmah, and by our commercial preponderance in
Kuang'tung."
On the same day (13th April) the British Minister at Paris

telegraphed to the Foreign Office, London: "It is stated in
to-night's papers that, at the Cabinet Council held this
morning, M. Hanotaux was able to announce to his colleagues
that the French demands on China had been satisfactorily met.
They are stated in the semi-official 'Temps' to be:—
1. Concession of a lease of a bay on the south coast of China.
2. Concession of a railway connecting Tonquin with Yünnan-fu

by the Red River.
3. Engagement on the part of China never to alienate the

territories of the provinces contiguous to Tonquin.
4. Engagement never to cede to any other Power the Island of

Hainan.
5. Arrangement in regard to the constitution of the postal

service."
Thus, for the time being, France was satisfied, and England
would be, before she gave rest to the Tsung-li Yamên. Her
present demands, as above specified by Mr. Balfour, were
pressed without ceasing by the pertinacious Sir Claude. On the
9th of June he obtained from the Yamên a lease for the British
government of about 200 square miles of territory on the
mainland opposite its island crown colony of Hong Kong, and
surrounding the Chinese city of Kowloon, the latter, however,
to remain under Chinese jurisdiction.
{89}
The term of the lease was 90 years. With regard to the opening
of Nanning as a Treaty Port, he received an assurance from the
Yamên in August that it should be done so soon as the Kwang-si
rebellion was crushed. On the other points he had equal
success.
Great Britain. Papers by Command:

China, Number 1, 1899, pages 12, 19, 98-99, 178.
CHINA: A. D. 1898 (May).

How the murder of a missionary was made the ground of French
demands for a Railway Concession.
On the 17th of May, 1898, the British Minister at Peking

cabled to Lord Salisbury: "Murder of missionary in Kuang-si.
French demands for compensation. … The Yamên … said they were
not certain that the murdered missionary was not a Chinaman,
and that the demands made by the French for compensation
comprise a Concession for a railway to some point on the
sea-coast not specified, a chapel to be built, and a pecuniary
indemnity of 100,000 fr. to be paid. Up to the present they had
refused all these demands." Later, the following particulars
of the murder were received from the British Consul at Canton:
"The occurrence happened about a fortnight ago at
Yun-gan-chou, in the P'ing-lo Prefecture. While walking
through the streets the missionary noticed a placard directed
against the Christian religion. Having discovered the author
of the placard, the missionary, with two converts, proceeded
to his house and attempted to arrest him. Out of this a
disturbance arose in which the passers-by took part, and in
the end the missionary and the two converts lost their lives."
On the 21st of May Sir Claude MacDonald reported to Lord

Salisbury from Peking: "I am very reliably informed that the
demands made at an interview with the Yamên yesterday by M.
Pichon, the French Minister, in connection with this case
were:—
1. A Concession to construct a railway from Pakhoi to Nanning;
2. Construction of a chapel at Pakhoi;
3. A pecuniary indemnity of 100,000 fr.; and
4. The responsible officials to be punished.
In response to these demands, the Yamên suggested that the

Railway Concession should be granted in a document by itself,
apart from the granting of the other demands, and that the
chapel should be built at Yungan-chou, the scene of the
murder, instead of at Pakhoi, and the French Minister
undertook to refer these modifications to his Government for
their favourable consideration."
On the 27th, Sir Claude reported further that he had heard on

very good authority that all the French demands had been
granted, and added: "The Yamên have since denied to me that
they have committed themselves to granting them, but I have
little doubt that they have practically done so. The reason
for making the Railway Concession a separate matter is that
the Chinese are anxious to avoid establishing precedents for
compensation for attacks on missionaries taking the shape of
commercial Concessions, and they hope, rather foolishly, to do
so by nominally closing the missionary case before the other
matter is taken up. They did this in the case of the German
Agreement for the lease of Kiao-chau Bay, which begins by
declaring that the Shantung missionary case has already been
closed. The French demands are not at all excessive. I have
already expressed my belief that the proposed railway will not
injure us commercially, provided, of course, that no
differential rates are allowed, as to which I shall insist on
specific assurances from the Yamên."

China, Number 1, 1899, pages 91, 146, 150.
Alluding to this incident, and to that which the German

government made its pretext for seizing Kiao Chau (see, above,
A. D. 1897-November), a German writer has remarked:
"Never before, perhaps, has so much material value been

attached to ministers of the Gospel in foreign lands, and the
manner in which, after their death, they are used to spread
civilization is somewhat foreign to our older ideas of the
functions of the bearers of spiritual blessings."
CHINA: A. D. 1898 (June-September).

Momentary influence of a reform party in the palace.
Futile attempt of the young emperor to uphold it.
The decaying state of the Empire had now become so desperately

plain, and the predatory swarm of governments and speculators
which gathered to despoil it had grown so greedy and so bold,
that a party which could see that the only hope for its
salvation must be sought in some modernizing reforms, of
education and administration, was able to win a momentary
footing of influence in the palace at Peking. Its leading
spirit appears to have been one Kang Yeu Wei, an extremely
radical reformer who came from Canton. In an article which he
wrote some months later, and which was published in the
"Contemporary Review," Kang Yeu Wei gave this account of
himself, and of the mode in which he was brought into
relations with the young Emperor:
"I was always fond of studying Western learning. After the

French took Foochow in 1885 there was evident danger of
China's end drawing nigh. Consequently, in 1889, I
memorialised about the matter in great grief. I feared
Russia's advance southward, and pointed out the secret
intentions of Japan and the latent danger in Corea. I thought
that China had come to such a pass that if she should devote
these years for the purpose of speedy reform she might become
strong, but if there was delay nothing could save her. At that
time the high Ministers of State were all Conservatives, and
would not present my memorial to the throne. After the loss of
Formosa, Wêng Tung Ho [the Emperor's tutor] was sorry that he
had listened to their advice, and was very cordial to me. Then
I exhorted him to reform, and I wrote a long memorial, signed
by 1,300 provincial graduates, to urge reform again and again,
and a Reform Club was formed in Peking, and the newspaper,
'Chinese Progress,' was started in Shanghai. At this time
(1895) Wêng Tung Ho strongly urged reform on the Emperor, but
was checked by the Empress-Dowager, and almost put aside then,
and the Reform Club was shut up. I then returned to Canton,
and founded the Ethical Society in Canton province and the
Sacred Society in Kwang-Si province. My disciples, Liang Chi
Chao and Tan Tze Tung, formed the Southern Learning Society in
Hunan province; Liu Shio started the Fookien Learning Society
in the Fukien province; Yang Tui the Szechuen Learning
Society, in the province of Szechuen; Yang Shin Sheu and Sung
Peh Luh opened the Pass Learning Society in the provinces of
Shansi and Shensi; I and my brother K'ang Kwang In, with King
Yuen Shen, opened a Chinese girls' school and formed the
Anti-foot-binding Society in Shanghai; and many newspapers
were started. Thus newspapers and new schools flourished in
all the provinces, and all the empire knew of the reform.
{90}
"When Kiaochow was taken by the Germans I went to Peking again

and sent up another memorial strongly urging reform, with the
same motive as Peter the Great, and on the same political
lines as have been adopted by the present Emperor of Japan. I
also presented my books on the history of reform in Japan and
the history of Peter the Great's reforms, and suggested that
all the coast of the empire be open to international trade.
Wêng Tung Ho approved of it, and strongly supported the
measure at Court. But the crowd of Conservatives opposed, and
he could not carry it. Then it was proposed to make an
alliance with England, as was advised in the reform paper of
Macao. The Government was undecided and feared that a great
nation like England would not be willing. But when England
asked that Port Arthur and Ta Lien Wan should be open ports I
hastened to Wêng Tung Ho and said, 'China is saved and will
not perish. You must grant the request. Since God gives us
this opportunity, it should on no account be let slip.' But
the Empress-Dowager and Li Hung Chang had made up their minds
to give them to Russia. Again, England promised to lend China
ten millions at 3 per cent. Russia was forcing China to borrow
from her at 4 per cent. The Foreign Office was in great fear
between these two great nations, and undecided. They then
discussed about borrowing from both, and finally decided not
to borrow from either. I said, 'You should decline Russia's
offer and borrow from England. Russia, though she might
threaten us, will never dare to declare war on this account.'
The Empress-Dowager favoured Russia and was afraid. In the end
they did not borrow from either.
"When Russia was seeking Port Arthur and Ta Lien Wan, I

presented two memorials that they should be refused to Russia
and both made open ports. The Emperor blamed Prince Kung and
Li Hung Chang, and asked, 'What is the use of a secret treaty
with Russia? Not only does Russia not protect us, but she
herself takes away territory from us.' Both the Prince and Li
replied: 'It is by giving Port Arthur and Ta Lien Wan to
Russia that the secret treaty is preserved.' At this the
Emperor was very angry. When the Empress-Dowager decided to
give them to Russia, and Wêng Tung Ho found that all my
prophecies came true, he strongly recommended me to the
Emperor. Kao Hsueh Tseng, the Supervising Censor, Chen Pao
Chen, the Governor of Hunan, Su Chih Ching, of the Hanlin
College, and Li Twan Fên, President of the Board of Rites,
also had recommended me from time to time. When the Emperor
asked the members of the Cabinet, Wêng-Tung Ho recommended me,
saying, 'His abilities are a hundred times superior to my
own,' and prayed the Emperor to listen to me in all matters of
reform. I also presented to the Emperor a record of England,
France, and Germany, a comparative diagram of all nations, and
the Reverend Timothy Richard's 'History of the Nineteenth
Century' and his 'Essays for the Times,' and translations of
Western books. The Emperor then understood something of the
cause of the rise and fall of nations, and made up his mind to
introduce great reforms. Desiring men to help him, he invited
me, and acted on my former suggestions."
But the situation at Peking, as Kang Yeu Wei describes it,—the

weakness of the young Emperor and the strength of the
Empress-Dowager,—made the undertaking of reform hopeless from
the beginning. The Empress-Dowager had professed to resign the
government, but, says Kang Yeu Wei, "she really still held the
reins in her hands. She read the memorials about appointments.
All the Ministers of the first and second rank were her
nominees. The Emperor had no voice. In all matters he had to
inform her first before acting. The Emperor was only an
Emperor in name.
"The Emperor was of a studious disposition. Since the loss of

Formosa he has been greatly distressed about the decline of
the Empire. After this his faithful tutor, Wêng Tung Ho, who
was a learned man, sought foreign books for study, and
presented them, with atlases, to the Emperor. These the
Emperor daily studied, discovered the cause of foreign
prosperity, discovered the reason of China's weakness and
conservatism, and made up his mind to reform. But this was not
in accordance with the view of the Empress-Dowager. At the
beginning of the war with Japan the Emperor and his Ministers
wanted war. The Empress-Dowager and Li Hung Chang wanted
peace. The Empress-Dowager was ready to give up Manchuria and
Formosa. The Emperor could not think of it for a moment
without crying with distress; he wanted to make an alliance
with England and to reform, while the Empress-Dowager was
equally bent on alliance with Russia without reform. Thus
their views diverged more and more, so that when the Emperor
wanted to reform in 1895 the Empress hated him; two of his
favourite Imperial ladies were beaten: the Vice-Presidents,
Chang Lin, Wang Ming Luan, and Tsz Tui, a brother of one of
these Imperial ladies, were driven away: and the Imperial
ladies' tutor, Wên Ting Shih, was stripped of his honours,
never to be employed any more. This was because all these
advised the Emperor to keep the power in his own hands.
"The eunuch Kow Lang Tsai memorialised the Empress-Dowager to

resign the government into the hands of the Emperor. For this
he was put to death. The Emperor himself narrowly escaped
being put aside then. … Chang Lin was a straightforward man in
whom Prince Kung put great confidence. In a memorial to the
Emperor he said: 'The relation of the Empress-Dowager to the
late Emperor Tung Chih was that of his own mother, but her
relation to you is that of the widowed concubine of a former
Emperor.' When the Empress-Dowager came to know this she was
in a great rage. Prince Kung was also in great fear. When the
Emperor issued an edict, by command of the Empress-Dowager, to
degrade Chang Lin, Prince Kung was weeping on his knees. When
asked the reason of it, the Emperor waved his hand and said,
'Don't ask him.' The Emperor and the Prince wept together, and
the Prince wept so bitterly that he had no strength to rise
up. The Emperor commanded the eunuchs to help him up and lead
him away. Wên Ting Shih begged the Emperor to exercise his
rights. The Emperor waved his hand, saying, 'Don't speak,' for
the Emperor knew long ago that when he took the reins of
government into his own hands the Empress hated him."
{91}
Nevertheless, in 1898, the well-meaning but weak young Emperor

was moved to a spasmodic assertion of his authority, in bold
strokes of reform. "Rather than lose his empire like those of
the Chin and the Ming dynasties, and become a by-word of
disgrace for all future generations, he would risk the dangers
of reform. If he succeeded, then he would get power into his
own hands and save his country. If he failed, he would greatly
open the minds of the people and prepare them for the future,
and thus, perhaps, preserve a remnant of China. At this time
the Emperor considered the chief thing was to preserve the
country from being lost to foreign nations, and looked upon
his position on the throne as of little consequence in
comparison—considering the welfare of the people as of
supreme importance, while his own person was of little
importance. He had none to consult with, but decided to risk
all danger and try."
Kang Yen Wei,

The Reform of China and the Revolution of 1898
(Contemporary Review, August, 1899).
Read with a knowledge of what came of them, the futile decrees

which the helpless young Emperor issued in June, 1898, seem
pathetic in the extreme. The following is a translation of the
first of his reform edicts, which bears the date, "Kuang Hsu,
24th year, 4th moon, 23d day," corresponding to June 11, 1898:
"For a long time past the condition of Imperial affairs has

been a subject of discussion among the officials of the
Empire, both metropolitan and provincial, with a view to bring
about changes necessary for improvement. Decrees have been
frequently issued by the Emperor, for a special system of
examinations, for doing away with the surplus soldiery, for
the alteration of the military examinations and for the
institution of colleges. In spite of the fact that these
things have so often been carefully thought out, and so many
plans have been formed, there is no general consensus of
opinion, and discussion is still rife as to which plans are

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2 THE EUROPEANIZATION OF CORPORATE LAW 85

3 INCORPORATION AND CORPORATE REPRESENTATION 155

5 ELEMENTS OF SHAREHOLDER DEMOCRACY 335

6 CONSTRAINTS ON DISCRETION: PART 1—​DIRECTORS 465

7 CONSTRAINTS ON DISCRETION: PART 2—​SHAREHOLDERS 603

11 CORPORATE INSOLVENCY 889

Appendix: Competences and Decision-Making of the General Meeting 987

xvi Table of Cases

Table of Cases xvii

xviii Table of Cases

Table of Cases xix

NEW ZEAL AND

Table of Cases xxi

xxii Table of Cases

Table of Cases xxiii

xxiv Table of Cases

3. From Pakhoi inland, presumably to Nanning; length, say 120

2. Tien-tsin-Chin-kiang line to be built by an Anglo-German

See Number 5 of the British Concessions.

See British Concessions, Number 11.

Great Britain, Papers by Command:

CHINA: A. D. 1898 (March).

"Your memorialists are distressed when they consider the

Great Britain, Papers by Command:

CHINA: A. D. 1898 (March-July).

While the British Minister at Peking was securing these

On the 28th of March he wrote again: "Port Arthur is not a

"As regards the second of these reasons nothing further need

On the 29th of March the completion of the transaction by

"Securing the inviolability of the sovereign rights of China,

On the 3d of April, Sir Claude MacDonald was able to announce

Great Britain, Papers by Command:

CHINA: A. D. 1898 (April-July).

"One of the censors of highest rank memorialised the Emperor

Annual Register, 1898, pages 333-334.

CHINA: A. D. 1898 (April-August).

France had now come forward to seize a place in the attacking

1. Kwangchow Wan [in the Lei-chau peninsula, on the southern

3. The promise not to alienate any territory in the three

4. The Chinese Government agree that if ever they constitute a

The Chinese Government are willing—

1. To lease us as much additional territory on Kowloon

2. The Yamên state that China is quite willing to allow the

On the 13th, Mr. Balfour, in the absence of Lord Salisbury,

(a) for giving us an the land required for military defences

(b) to fulfil their promise to make Nanning a Treaty port;

(d) an agreement as to the non-alienation of Kuang'tung and

In connection with condition (d), it is in the interests of

On the same day (13th April) the British Minister at Paris

1. Concession of a lease of a bay on the south coast of China.

2. Concession of a railway connecting Tonquin with Yünnan-fu

3. Engagement on the part of China never to alienate the

4. Engagement never to cede to any other Power the Island of

5. Arrangement in regard to the constitution of the postal

Great Britain. Papers by Command:

CHINA: A. D. 1898 (May).

On the 17th of May, 1898, the British Minister at Peking

On the 21st of May Sir Claude MacDonald reported to Lord

1. A Concession to construct a railway from Pakhoi to Nanning;

2. Construction of a chapel at Pakhoi;

3. A pecuniary indemnity of 100,000 fr.; and

6 CONSTRAINTS ON DISCRETION: PART 1—DIRECTORS 465

7 CONSTRAINTS ON DISCRETION: PART 2—SHAREHOLDERS 603